Will Microsoft blow its netbook lead with Windows 7 crippleware?

When netbooks first came along, they almost all ran Linux. Microsoft, which was stuck with the resource pig known as Windows Vista, simply couldn't compete. So, reluctantly, Microsoft gave Windows XP Home a new lease on life and sold it below cost to OEMs (original equipment manufacturers) to kill the Linux desktop at the root. For this cost, Microsoft was successful, but now Microsoft is about to blow it by replacing XP Home with Windows 7 Starter Edition, which is crippleware by any other name.

Microsoft has been selling crippleware, software that's deliberately had features removed, for some time. The only real difference, for example, between XP Home and XP Pro, besides the price-tag, was that XP Home couldn't handle business domain or AD (Active Directory) networking. To get this one feature activated, millions of business users paid an average of $80 more per PC.

Today, Microsoft continues to sell XP, but the company really, really doesn't want to do this. Why? Because Microsoft is losing money, especially on netbooks, when you buy XP. According to the Wall Street Journal, "the company takes in less than $15 per netbook for Windows XP once marketing rebates are taken into account -- far less than the estimated $50 to $60 it receives for PCs running Windows Vista."

Actually, my friends at the OEMs tell me that it's not even $15. Try about $7 a copy. At either price, Microsoft is losing money every time you buy a copy of XP. Is it any wonder that Microsoft is laying off employees and admitting that its client (Windows desktop) revenue declined 8% as a result of PC market weakness and a continued shift to lower priced netbooks?"

Now Microsoft has billions to burn, but is crushing the Linux desktop worth losing $384-million of revenue a quarter? I don't think so, and neither does Microsoft.

This is why Microsoft has been claiming that Windows 7 will run just great on netbooks. Except, now they're not. Now, Microsoft is telling us that instead of full-strength Windows 7, you'll be getting Windows 7 Starter Edition instead.

Windows 7 Starter Edition limits you to three applications running at once. That's not quite as bad as it sounds.

For instance, an anti-virus program running as a service doesn't count against the limit and neither does running multiple tabs or windows with one application. Of course, if you're like me and you're always running a Web browser, an e-mail client, an IM client and a word processor, you're out of luck. I can see users throwing their netbooks in sheer frustration against the wall when they try, and fail, to run four applications at once.

You also won't get Aero Glass; remote desktop; network domain or AD support; and BitLocker/BitLocker to Go encryption on the Starter Edition. In short, it's crippleware.

So, will users want to pay $100 more per netbook just for Windows 7? I doubt it. So does Intel blogger Josh Bancroft, who wrote, "adding, say, [US] $100 to the cost of a $400 netbook just to pay for Windows 7 is going to be a tough proposition all around." I strongly suspect Microsoft will ask less than a $100 per copy of the Starter Edition, but even so it's hard to see someone wanting to buy this version.

I mean, come on, on the Dell Mini 9 with Ubuntu 8.04, I get not just a full desktop with no limitations, but I also get an office suite and a slew of other applications as well. Heck, I even get a remote desktop, thanks to VNC; Windows AD and domain networking; and disk encryption. These are all features that Microsoft offers, but not on Starter Edition.

Doesn't this Microsoft move tell us what we all really know about Microsoft if we're honest? That Microsoft is in the business of ripping off its customers for every dime they can, and if they can fool people into buying a high-priced, defective-by-design version of Windows they're going to do it.

Just remember, you do have a choice. You can buy desktop Linux. Or, if can't break yourself of the Windows habit, at the least, go for XP, instead of Windows 7 Starter Edition. It will still be your better, not to mention cheaper, netbook choice.

Related Blogs:

  • Preston Gralla: Acer and Intel: Crippled Windows 7 netbooks won't sell
  • Steven J. Vaughan-Nichols: Will Microsoft blow its netbook lead with Windows 7 crippleware?
  • Preston Gralla: Microsoft: We'll cripple Windows 7 on netbooks
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