This week's announcement that Microsoft is creating a basic software line may be more than a response to open-source software; perhaps it's just the cover story. Microsoft was still fighting the feature battle when the anti-bloat war broke out, and that's left them with products that aren't a good fit for economical hardware.At first I was thinking, "What development is there to do?" Wouldn't Microsoft just do what it did with Vista, and create a low-end edition crippled by disabling various features? After all, you can buy Microsoft Office Home and Student 2007 for less than $100; why not cut out another few features, sell it for $50, and call it a day? Another second of thought reveals the real reason: Microsoft overshot the resource target. Both Office and Windows are no longer suitable for modest systems, even if they can be priced aggressively.

This is not new, of course; software has been growing at a greedy rate to soak up all the disk, memory, and CPU time that hardware makers have had to offer over the past two decades. Lately, though, consumers have taken a liking to tiny but powerful computers like the Asus Eee PC. The least expensive models run Linux only; you can get Windows on some of the larger models -- but it's Windows XP. Office 2007, whose ribbon feature is greedy for screen space, isn't a good fit for the tiny Eee PC display, either.

This trend toward thrifty computers filled with tiny software is worrisome for Microsoft. It's been adding features for 20 years, and seems to have thought that the trend would go on forever. The public's reaction to Vista was like the canary in the coal mine. Now it's struggling to formulate a strategy that keeps it in the running. On the OS end, it's keeping XP around longer than it would like. A smaller version of Office will take real development work -- although Microsoft could always resurrect Office 98.