The latest update to the killing off of Windows XP this week is about as disingenuous as they come, even for Microsoft. So now, XP Home will be available on ultra-low-cost PCs (ULCPCs) through June 30, 2010, or one year after the release of Windows 7, whichever comes first. Director of Windows Clients at Microsoft Kevin Kutz apparently told internetnews.com that ULCPCs are "...really new and really interesting and we want to help lead it."

Well, they may be really interesting, but they're not really new, and Microsoft darned well knows it. The real issue is that Microsoft wants Linux NOT to lead here. It's also appeasing Intel, which has plans for this market, as well. It hasn't addressed the problem of why it's killing off the one version of Windows that its existing consumer and business customers like and want, in favor of Vista.

Some of those customers may feel that they've been backed into a corner that they will escape by abandoning Microsoft altogether, like Datamation's Mike Elgan says he will. If he can't buy XP going forward, he won't buy Vista. He'll go with Linux or Mac OS X. No more Microsoft. You have to start to wonder if a financial guy at Microsoft has run some numbers on locking down those "emerging markets" with ULCPCs running smaller versions of Microsoft OSs vs. losing significant numbers of existing "developed market" customers with both money and a desire to buy a full version of that OS.

Jon Collins writes on his Total Immersion blog today that a fundamental building block of Microsoft's strategy is a fear "that people might stop buying its software if there is insufficient 'new and improved' about it." He's addressing another problem -- that Microsoft and the trendy and very, very hot green movement are worlds apart -- but the point remains that the XP story seems to be headed for an unhappy ending for both Redmond and its customers. Consumers and IT departments have largely rejected the "new and improved" Vista in favor of the known and trusted XP. And, hey -- they don't have to buy new computers and send more old ones to the landfill to run it.

A well-worn koan of marketing and sales is that it is easier and more cost-effective to keep existing customers happy and spending than to acquire new ones. Microsoft is blatantly ignoring that piece of wisdom. A multi-faceted opportunity is slipping through Microsoft's fingers.