Microsoft aims to reach next billion PC users

New program gives near-free Windows and Office to governments that buy PCs for students to use at home.

Microsoft Chairman Bill Gates is using a speech in Beijing to unveil a new low-cost bundle of Office and Windows, one of several new initiatives aimed at getting PCs into the hands of more people in emerging markets.

The software maker will offer the $3 Student Innovation Suite to governments that agree to directly purchase PCs for students to use in their schoolwork and at home. Gates plans to announce the program at a company-sponsored forum for government leaders.

The collection of software, which will start shipping in the second half of this year, includes Windows XP Starter Edition, Office Home and Student 2007, Windows Live Mail Desktop and several educational products. The $3 price includes the software license, while backup discs and documentation will cost extra. In order to be eligible, governments must pick up at least half the tab for the PC, though the software can also be used on refurbished computers, which can cost as little as $50, Microsoft said.

Microsoft is hoping this program and others will help the company reach more of the 5 billion people who have yet to benefit from the PC revolution.

"We've set an internal goal that by 2015 we will help to reach the first billion of the next 5 billion that have been underserved," said Will Poole, the corporate vice president who heads Microsoft's market expansion group.

Poole said that in the developed world Microsoft has largely reached its goal of a PC on every desktop and in every home. "The PC is an expected appliance in the home for access to information, for schoolwork," Poole said. But, he said, that still leaves five out of every six people on the planet without a PC.

Although many poor governments may not be able to afford to buy computers for their student populations, Poole said there are nations that have expressed interest in doing just that. Mexico, for example, has a program that puts computers in the hands of top students.

"This is a new trend we are trying to embrace," Poole said. "We expect there will be some number of many tens if not single hundreds of thousands of PCs purchased under programs like this over the next 12 months."

Although Microsoft is aiming the PCs at students, it understands that they may get used more broadly by the families who get them.

"We're not going to tell them that the father cannot use it to look for job listings or the mom can't use it to look up health information," Poole said. "Of course it is going to be used however it is that it is used in the household, but the expectation is that it is for the student for education as the primary use."

In addition to the discounted Office and Windows bundle, Microsoft is announcing several other projects. The company will nearly double, to 200, the number of local innovation centers it has over the next two years. Microsoft will also set up an employability portal aimed at helping more of India's technology workers find jobs. The software maker is working with the Asian Development Bank to help build additional technology capacity there.

The efforts mark an expansion of Microsoft's long-running Unlimited Potential program, an effort to bring computer literacy and job skills training to the world's underserved communities.

Poole said that Microsoft can't solve the problem by itself and is hoping to work with other tech companies, governments and international agencies.

"This is not something we are looking to do alone," he said.

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