Microsoft gives away 85 million PCs...on a subscription basis

Microsoft is using a subscription-based service to combat Linux in developing markets.

I hadn't heard of Microsoft's Unlimited Potential program, but Microsoft is using it to seed the Russian and adjacent markets with subscription-based PCs that customers can use. It's a clever way for Microsoft to seed developing markets with its Vista operating system, at a compelling price.

Microsoft paints the Unlimited Potential program as part of Bill Gates' "creative capitalism" policy whereby developing nations can benefit from advanced technology without paying out their entire GDP to get it. As suggested above, however, the program also offers Microsoft a way to club Linux's growth in these markets:

Analysts and observers have suggested another reason why Microsoft is interested in working with emerging markets on technology efforts: the fight against Linux, which is proving a less expensive and easier-to-access option for people in countries with scant access to technology. Indeed, Unlimited Potential and creative capitalism combine both altruism and business interests, and Microsoft executives have acknowledged the need to foster education and business development to get software like Windows and Office in the hands of people who wouldn't typically be able to afford it.

I think it's great to see Microsoft playing long-term hardball in this way. This is a way for the company to combat the allure of free (or very inexpensive) Linux-based PCs without giving up on its standard business model. I've stated repeatedly that Microsoft would do well to transition from that business model over time as more and more of the world competes with it on a services-based model, but this is a great short-term hedge against Linux.

Much more interesting to me is how the Linux world will respond. Free is still better than not-so-free paid out on a monthly subscription. Which of the Linux desktop vendors will step up to the challenge?

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