Netbook users: Microsoft says three apps is enough

During the last two years, Microsoft has encountered more competition from Linux on the desktop than probably all of the other years combined. The venue? Netbooks.

The popularity of netbooks took just about everyone in the computing industry by surprise. With the recent race to more memory, bigger hard-drives and fatter media centers, who would think a lighter powered and lighter laptop would prove so popular? Popular opinion says people are buying them as second (or third) computers. Cheap enough to add for frequent travellers or guests; convenient enough to get the normal user by in these arenas. In developing countries and with new computer users, I believe most people are buying netbooks as primary computers.

Why did Linux prove successful in this arena? Serendipity played a large factor. The rise of netbooks coincided with the launch of Vista, an operating system hog that could never power such slimmed down machines. Manufacturers were stuck. Try to get Microsoft to keep supporting XP (something they didn’t want to do for obvious reasons) or give Linux a try. Linux also came with a compelling advantage for these manufacturers: the ability to customize it to their hardware, and even more important, slap their brand on it. This is something Microsoft would never allow a hardware provider to do. Just ask IBM.

Microsoft soon caved and let these manufacturers install XP, with a hit to their margins. Now it’s redesigned and rebranded Vista into Windows 7 and supposedly fixed some of its resource issues, so it seems clear that the future netbook market will have a much higher ratio of Windows to Linux than previous years. This change is inevitable. The network effect of a near monopoly is great, and lets face it, new computer users are still not the best target demographic for Linux. The Linux community should certainly never look past Microsoft’s ability to make the most of their position. They are still a money minting machine, and they use that money and their power to their best advantage.

So while I am convinced that Microsoft will take market position back on netbooks, news today that they plan on offering a crippled version of Windows 7 to both netbook users and the developing world makes me question this assumption.  In the Wall Street Journal, Nick Wingfield writes:

A curious part of Microsoft’s retail plan for its upcoming Windows 7 operating system, disclosed Tuesday, is that the company will offer a version of the software, Windows 7 Starter, that has some serious limitations. The biggest of them: people with Starter on their PCs will be able to run no more than three programs at a time.

Of course if you wish to run more than three applications, you can go to a website and purchase an upgrade. Here’s a way to get netbook users in the door by offering manufacturers a cheap option, hope they get frustrated enough to get their credit card out and add margin back to MSFT’s bottom line.

It makes sense in pure business-school 101 terms, but I think our culture is turning away from such heavy-handed business strategies as this. Social media, participatory communities and the current financial crisis is giving strength to those companies, brands and individuals who make a fair, honest and authentic contract with their users. (Just look at our recent Presidential campaign.) I’m not sure a pop up window saying, “Sorry, You Can’t Launch Excel Right Now. Please Close Firefox or Upgrade Today” really creates that impression. But is that enough? Will Linux really be able to compete against Redmond? I think this policy may make it slightly easier, but honestly it’s a difficult challenge. David, get out your slingshot of computing freedom.

As Brad Brooks, Microsoft corporate VP, says:

But for the cheapest netbooks, he believes it’s better to have even a limited version of Windows than Linux, the rival operating system that had a big share of netbook sales when they first came out.

“We want Windows to run on those experiences,” he said.

I’m sure you do, Brad, but I’m not entirely sure that a restricted and frustrating experience will be ideal for your customers, or the best foundation for your company’s future relationship with its users in this new cultural climate. The question remains whether the Linux community can make the most of this opportunity.