Amusing report of Microsoft’s new initiative aimed at poor people. It’s announced an approach to selling computer hardware and software to emerging markets.
Dubbed Microsoft FlexGo, the initiative lets people buy a PC at retail for about half its usual cost, then pay off the balance via hourly usage fees. Designed to spread the penetration of PCs in emerging markets, FlexGo lower the barrier to PC ownership by allowing individuals to take home a machine with a minimal upfront investment and then pay off the balance via pre-paid cards. Buy enough time and you’ll eventually own the machine outright; run your pre-paid time out and the machine will stop working until more time is purchased.
It’s an interesting approach to emerging markets because it accounts for unreliable incomes. If money is tight during a particular month, the machine simply shuts down until more minutes are purchased. There’s no default. No one shows up at your door with a repossession order.
“One of the learnings that we’ve had is that it’s not just that families in emerging markets have modest budgets,” Mike Wickstrand, director of product management in the market expansion group at Microsoft told News.com. “It’s the irregularity and unpredictability of their income.”
Of course, as Good Morning Silicon Valley observes, “Microsoft’s motives here are not entirely altruistic. If it’s successful, FlexGo will undoubtedly curb software piracy a bit. And then there’s the money. Some estimates put the number of people worldwide who earn enough to buy PCs under the initiative, but not enough to buy one on their own at more than 1 billion.”
This is Microsoft’s ‘answer’ to the One Laptop Per Child initiative, about which Bill Gates has made derisive remarks, motivated no doubt by Nicholas Negroponte’s decision that the laptop will run Linux. The idea that poor people will be happy to pay $600 for a Windows-powered PC, even if they don’t have to pay the entire sum upfront, is barmy.