REDMOND, Washington: Ignoring Benjamin's Franklin's advice ("When in doubt – don't") Microsoft's panic over lacklustre sales of its new flagship Windows Vista operating system has driven the cyber colossus into a flurry of price-cutting.

The cuts will be on offer in over seventy nations, their value varying from country to country – dependent, seemingly, on what Microsoft believes each market will stand.

Vista Ultimate, the priciest of an overpriced range, will be offered stateside at $319 (€209.94; £160.70), 20% down on the current retail price of $399.

According to Brad Brooks, one of a regiment of Microsoft corporate vps: "We anticipate these changes will provide greater opportunities... to sell more standalone copies of Windows."

As opposed to those that come ready-installed on new PCs and laptops. 

  • And as if to underscore the old adage that when you're top of the heap the only future direction is down, Microsoft will next Monday unveil a new service intended to parry Google's foray into one of its most lucrative markets: software that caters for small businesses.

    Like Google, Microsoft will vend and deliver the products via the web, targeting small companies with a need to manage corporate email and facilitate collaboration on documents and projects. 

    The software won't be sold outright. Instead users pay a flat annual fee according to the number of workstations accessing the service. As good a way as any of chaining your customers to your products.

    And whereas Microsoft is coy about its fees,  Google is unabashedly upfront about the $50 it charges annually for each worker.

    Some observers believe that Microsoft could be robbing Peter to pay Paul – a charge denied by Chris Capossela, head of Microsoft Office desktop applications and related server software businesses. 

    "We're really not worried about cannibalisation," he insists, at the same time badmouthing Google's offering. "Looking at their software, it's incredibly basic. It isn't good enough for a 50-person company.” 

  • Data sourced from BBC Online (UK) and Financial Times; additional content by WARC staff