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5/19/2006
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Microsoft To Launch Subscription Windows Service

The PowerLine initiative is a prepaid, subscriptions-based Windows service designed for emerging markets.

Microsoft is expected to kick off its "PowerLine Initiative" next month to deliver Windows on a pay-as-you-go basis for emerging markets.

The initiative, driven by Microsoft's New Business and Products Group (NBPG), will release the first version of prepaid and subscription Windows in a number of emerging economies that could include Brazil, India, Hungary, Russia, and Vietnam, according to information on Microsoft's web site.

Microsoft is developing version 1.0 PowerLine servers to support the Windows prepaid and subscription model, according to sources. The PowerLine servers will be hosted at Microsoft.

The service-oriented architecture under development, sources said, will integrate with subscription and prepaid systems of partners around the globe. For example, Microsoft plans to offer a billing system adaptor to plug in third party billing systems as a way to support flexible payments and offer partners a reporting service.

One Microsoft partner familiar with the effort said Powerline is a smart way to deliver Windows to emerging economies where many businesses cannot afford an IT infrastructure. In this model, Windows will be delivered to PCs that can be accessed by many users who cannot afford their own PCs.

It's also a way for Microsoft to outmaneuver advances made by Linux in emerging markets, sources said.

"You can have a cheap -- $40 --interface device that provides electrical isolation, an IP address and an Ethernet port, plus a cheap "terminal" under $100 and put all the expensive smarts including the software at the center of the network," said one source close to Microsoft who is familiar with Powerline.

"The idea has been around for a while but cost and scale have kept it a niche play until recently. You have an answer for emerging economies that have power but no phone/data networks and can't afford expensive rich media PCs."

Microsoft is working on several initiatives to serve up Windows to new markets and capitalize on globalization including Windows Starter Edition, Powerline, internet cafes and other anti-piracy efforts such as Windows Genuine Advantage, according to information on Microsoft's Web site.

One Microsoft partner in Europe said Powerline is a good way to address piracy and also establish Windows in new markets. "I think it is nice that Microsoft are now experimenting with a variety of different licensing models. It is especially sensitive for the BRIC markets --Brazil, Russia, India and China -- to find ways to sell licenses that is easy to understand and that has a price tag making it less worthwhile to use piracy copies," said Per Wrengren, CEO of IDE, a Stockholm-based Microsoft solution provider. "I am sure that we will see lot of different approaches the coming years around how to deliver licenses both technically and legally."

Microsoft declined to comment for this story.

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