ANTenna Blog -- Hardware & Software

Microsoft likes to disparage the world of open source software as not ready for prime time. But the company's actions tell another story: it now plans to develop lower-priced "basic" versions of its software to compete with often-free open-source alternatives.

As reported by Paul McDougal in InformationWeek, that's double-barreled good news for small and midsize companies.

First, any opportunity to save money is a good thing. And many companies simply don't need all the features of Microsoft's high-end software packages. Designed to be all things to all users, the programs have steadily grown in price and complexity. Being able to buy only what you need is likely to save many companies significantly, especially if you can mix and match versions for different types of users. Why should you buy newbies the same expensive tools required by power users?

Second, this plan tacitly legitimizes the open source alternatives already on the market. If Microsoft is taking them seriously, maybe your company should too.

Just don't count your chickens quite yet. As McDougal puts it:

To date, however, Microsoft's low-cost efforts are still relatively expensive, particularly when compared to software that's free. For instance, the student and home versions of Microsoft Office 2007, which a company spokesperson cited Monday as an example of Microsoft's strategy to counter open source products, are both priced at more than $100. Microsoft's Equipt software subscription service, also cited by the spokesperson, sells for $69 per year.

And the various versions of Windows Vista aren't widely seen as discounting so much as sowing confusion in the marketplace. It remains to be seen exactly how much these "basic" versions will cost, and how powerful they will actually be. If Microsoft worries to much about not cannibalizing its top-of-the-line products, the basic versions may not be powerful enough for most users -- even in cash-strapped smaller companies.

Anyone care to predict how this is likely to turn out?