by CIO Staff

Microsoft’s Pay-As-You-Go PCs Fail to Convince

May 30, 20063 mins
Data Center

Microsoft has admitted that its projected launch of “pay-as-you-go” PCs into developing countries has not been quite as carefully planned as it could have been.

Encouraged by India’s success of the pay-as-you-go mobile phone service, Microsoft had decided to offer flexible personal computing options in the emerging market, based on a similar financial model.

But before announcing the trials for the “pay-as-you-go” PCs in India with FlexGo capability—a metering technology that informs users of time used, showing them how to add more hours by simply typing in a number from a prepaid card—Microsoft failed to check how the country copes with the scheduled power outages each day.

The outages, deliberately exercised by the Indian electricity department to avoid overloading of the power lines, make power generators and UPS systems a common necessity in homes and offices across the country.

Microsoft, which claims to make the PCs available to first-time consumers for as little as US$278 (roughly 12,700 Indian rupees), forgot that buyers would have to shell out an additional amount (about INR 2000) to buy the UPS separately as well.

Jeremy Gittins, Microsoft’s business development manager for emerging markets, in spite of expressing a genuine concern about the issue, admitted having not considered the factors. He said the company would be tying up with vendors and partners in India who would better address the situation.

“Affordability is going to be an issue,” he said. “Maybe consumers will buy the PCs and use them while there is power. … It is all up to the vendors to educate first-time customers about the significant purchase.” If Microsoft is anticipating Indian vendors—who incidentally come from a business-oriented culture—to come up with a reduced price for the UPS systems without a suitable incentive, is another point that the company has overlooked.

Interestingly, one of Microsoft’s partners in this venture is Intel, who had launched Community PCs for rural India only this March. Intel’s Community PCs are designed to run off a car battery during power outages, and also to withstand the dust and harsh environment in rural India.

MIT’s $100 open-source-based notebook, launched last November, will be used by schoolchildren in developing countries who can crank a handle once for every 10 minutes of usage.

“The point is to reach the PCs to India looking at its growing infrastructure and the success of the pay-as-you-go mobile service there. The PCs will be targeted at a whole new generation of citizens who are going to get first-time experience working on computers,” said Gittins.

“There will also be telephone support for the new users,” he added. Trials will be conducted on Microsoft’s pay-as-you-go PCs in India in the second half of this year. The PCs will also be introduced in China, South Africa and Mexico. Brazil has had trials already, said the company.

The problem when you grow too big is that you forget about the little hurdles that you could have tripped on when you were smaller. Microsoft might be facing the same issue.

-Radhika Praveen, (London)

For related news coverage, read Microsoft to Trial Pay-As-You-Go PCs.

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