Some Thoughts About Windows Vista Pricing

[Jason Dunn]

We're having a lively discussion about the Vista upgrade process over in this thread (http://www.digitalmediathoughts.com/forums/viewtopic.php?t=11715&postdays=0&postorder=asc&start=0), but when the discussion turned to pricing, I thought my response would be a good kickoff for a front page post on the topic. Digital Media Thoughts community member Phronetix started the subject off:

Let's start with the choice to go with seven versions. Then they follow up this obviously hyperconfused offering by giving them names that magically and simultaneously help the end user, AND confuse them further. Great job guys.

Honestly? It's not as big of a deal as people are trying to make it into. Microsoft has so many versions available because of how they're going to be sold. When a consumer goes into a Best Buy, he's going to see two or possibly three versions on the shelf: Vista Basic, Vista Home Premium, and Vista Ultimate. If they're upgrading a PC, they're going to look at the upgrade versions only. 95% of people are going to chose between Vista Basic or Premium - the price tag on Ultimate will quickly rule it out for almost everyone.

Let's compare to Mac: $150 Canadian for the full version you can install cleanly on one machine. Or $250 for the full version and five licenses. Their confusing names? The Single User and Family Pack versions. Those are current Canadian retail prices.

No arguments from me there - the Mac approach is simply awesome. Even if Microsoft were to offer three full Home Premium licenses for $250 CAD, that would be a huge improvement.<!>

My next issue is the cost. Wow. I'm speechless. I really don't want to hurl insults or demean the folks who put their lives into the product. It is almost like they really don't want the general public to go buy the most useful versions.

I have to disagree with you there a bit. The prices didn't change much from XP.

XP Home Upgrade: $129 CAD
XP Professional Upgrade: $249 CAD
XP 2005 Media Centre OEM: $134.95 CAD

Vista Home Basic Upgrade: $118 CAD
Vista Home Premium Upgrade: $169 CAD
Vista Home Premium OEM: $139 CAD
Vista Ultimate Upgrade: $249 CAD

Home Basic is XP Home - so we're talking about a cost savings of $11. Home Premium is like Media Center, but it's a bit of an unfair comparison because Media Center was only ever sold as an OEM version...but if you compare the two OEM versions, Home Premium OEM is only $5 more.

Vista Ultimate is a whole different beast - there's never been a version of Windows like it before, an it's not something I'd recommend to anyone except the hardcore geeks (you can compare the different versions of Vista (http://www.microsoft.com/windows/products/windowsvista/editions/choose.mspx)). When my family &amp; friends upgrade to Vista, I'll probably recommend Home Premium OEM since they'd never call Microsoft for tech support anyway, they just call me. ;-) If they have a PC that lacks the DirectX 9 power for Aero Glass, Vista Home Basic will do just fine.

So what do you think? Is most of the uproar over Vista being more confusing and expensive just negative hype? Or am I wrong in how I've assessed the situation and people really are confused and ticked off at the pricing? Weigh in with your thoughts.

[Kacey Green]

Maybe they can lower prices over time like other industries do. Say around the time SP2 comes out drop the price by a nice percentage, say 20-30%

[Jason Dunn]

Maybe they can lower prices over time like other industries do. Say around the time SP2 comes out drop the price by a nice percentage, say 20-30%

Well, they've never done anything like that in the history of Microsoft...but I suppose anything is possible. ;-)

[Chris Gohlke]

I think the market has changed somewhat since XP and Apple gets it while Microsoft does not. First, when XP came out, I had one computer for 2 people. With Vista coming out, I have 3 computers for for 2 people. Basically the upgrade cost tripled for me. Second, when XP came out, PC's were considerably more than they cost now, so an upgrade was a smaller cost relative to the cost of a new PC. Heck on release day for Vista, you could by a brand new system with Vista for $400.

[Vincent Ferrari]

I don't think Vista's price by itself is what rubs people the wrong way. I think people aren't thrilled with Vista because it's really not "new version" improved. It's nowhere near the leap most people made when they went from 95/98/ME to XP.

It's the same general attitude people had that were using 2000 and had to upgrade to XP. They weren't thrilled with making the upgrade either because they didn't see it as a huge difference.

[Jason Dunn]

I don't think Vista's price by itself is what rubs people the wrong way. I think people aren't thrilled with Vista because it's really not "new version" improved. It's nowhere near the leap most people made when they went from 95/98/ME to XP.

Quite frankly, people that think that are simply ignorant. Of course that means it's up to Microsoft to explain how and why Vista is different and improved. Someone asked me about Vista yesterday and in about three minutes I had them going "wow" and saying they couldn't wait to upgrade. There's a lot that's new and improved.

[Jeremy Charette]

I think what is swaying me to move completely over to Vista is the better memory management. Vista beats XP hands down when it comes to RAM usage and pre-caching. SuperFetch and ReadyBoost alone are reason enough to switch to Vista, and they're just the tip of the iceberg.

Let's see what happens to laptop battery life when new systems with hybrid hard drives ship later this year. Then we'll see who thinks Vista isn't worth the hassle or expense.

[Chris Gohlke]

I don't think ignorant is quite the right word. If you ask a non-techie or even a lot of techies, XP meets most of their perceived needs. Sure, Aereglass and the 3-D window tabber thingy are pretty cool, but not reasons to update. The rest is a marketing issue for Microsoft. Frankly, I'm not about to upgrade, I'll just wait until I need a new PC.

Face it, we are getting to the point that for a lot of users, the PC is just a dumb terminal for the internet. With more applications like Google's wordprocessor, this trend will probably continue. If PC's were not already so cheap, there would probably be a great market for a basic terminal with some attached storage.

[yada88]

Maybe they can lower prices over time like other industries do. Say around the time SP2 comes out drop the price by a nice percentage, say 20-30%

Well, they've never done anything like that in the history of Microsoft...but I suppose anything is possible. ;-)

Jason, I am going to ammend two things that you said. First, Best Buy will undoubtedly also carry Vista Business. Business users (i don't know why) still sometimes go to those stores for computers, so that's 4 versions (they will sell home basic for ultra-portables and ultra-crappys.)

Secondly, I'm assuming that wink was for Xbox. Windows XP has been for a while now much cheaper than when it first came out. Now I don't know how long it took it to drop, but I'd say SP2 at the latest. I think although Kacey might have pulled that out of thin air, he could be quite right. My 2 pence (currently in the UK)

[Phronetix]

Honestly? It's not as big of a deal as people are trying to make it into. Microsoft has so many versions available because of how they're going to be sold. When a consumer goes into a Best Buy, he's going to see two or possibly three versions on the shelf: Vista Basic, Vista Home Premium, and Vista Ultimate. If they're upgrading a PC, they're going to look at the upgrade versions only. 95% of people are going to chose between Vista Basic or Premium - the price tag on Ultimate will quickly rule it out for almost everyone.


I still think it is a huge deal. The first part of it is because the Upgrade versions do not deserve to be on the shelf in their present state, and only serve to make the product appear to be less expensive. In my post in the same thread (http://www.digitalmediathoughts.com/forums/viewtopic.php?t=11715&amp;postdays=0&amp;postorder=asc&amp;start=0) Jason referred to above, I go into this in a little more detail.

The best option for everyone that buys their product, to minimize the likelihood of issues on the individual machines, is to install the product cleanly, not on top of any old and potentially damaged code (I'm not expert in this, but I know what it looks like when not done well). What does Microsoft do? They offer their product for upgrade that apparently dows not allow this to occur. They help drive the first nail into the proverbial coffin. Okay, that was a bit of a dramatic metaphor. Why do they do this? I believe it is so Jason (and his fellow MS evangelists, sales persons, experts) can say stuff like this...


The prices didn't change much from XP.

XP Home Upgrade: $129 CAD
XP Professional Upgrade: $249 CAD
XP 2005 Media Centre OEM: $134.95 CAD

Vista Home Basic Upgrade: $118 CAD
Vista Home Premium Upgrade: $169 CAD
Vista Home Premium OEM: $139 CAD
Vista Ultimate Upgrade: $249 CAD

Home Basic is XP Home - so we're talking about a cost savings of $11. Home Premium is like Media Center, but it's a bit of an unfair comparison because Media Center was only ever sold as an OEM version...but if you compare the two OEM versions, Home Premium OEM is only $5 more.

Vista Ultimate is a whole different beast - there's never been a version of Windows like it before, an it's not something I'd recommend to anyone except the hardcore geeks (you can compare the different versions of Vista (http://www.microsoft.com/windows/products/windowsvista/editions/choose.mspx)). When my family &amp; friends upgrade to Vista, I'll probably recommend Home Premium OEM since they'd never call Microsoft for tech support anyway, they just call me. ;-) If they have a PC that lacks the DirectX 9 power for Aero Glass, Vista Home Basic will do just fine.


I think that Jason has completely missed the point. The upgrade versions that laud the "competitive" prices are not wise purchases, or maybe he disagrees with me there. (And I'm open to having my mind changed on this. I just need to be convinced that the upgrade version is as safe as the full version.) I was trying to get at the point that the Mac OS X upgrades are all full versions that are thought of as upgrades by users.

Therefore one is left with:
Vista Ultimate $497
Vista Home Premium $299
Vista Home Basic $259

I got this info from the CostCo Canada web site (http://www.costco.ca/en-CA/Common/Search.aspx?whse=&amp;topnav=&amp;search=VistaSoftwareSolutions&amp;N=0&amp;Ntt=VistaSoftwareSolutions).

This is for one license. The trick licenses offered as discounts by MS are only available with the Ultimate, a version that Jason later explains nobody but him needs. (Okay, I'm being snarky, but it really is all in fun.)

The fact is that MS needs to be reading forums like this one, and they needs to learn a little from the experience (no pun intended) of their users.



Let's compare to Mac: $150 Canadian for the full version you can install cleanly on one machine. Or $250 for the full version and five licenses. Their confusing names? The Single User and Family Pack versions. Those are current Canadian retail prices.

No arguments from me there - the Mac approach is simply awesome. Even if Microsoft were to offer three full Home Premium licenses for $250 CAD, that would be a huge improvement.<!>


Apple deserves a lot of credit for certain things, but they didn't invent simplicity. And they didn't patent it. They did, however, manage to put out three upgrades of a similar magnitide while Longhorn was being developed. Microsoft has had a chance to see these things roll out, but it appears they just didn't consider the KISS approach. Don't get me wrong, there are things about Vista that really appeal to me, and I've already sent an email to Apple with my vote for certain features. As far as marketing, packaging and communicating their products, Microsoft is an also-ran. At times like these I am reminded of a clever What if Microsoft released the iPod? ad parody (http://youtube.com/watch?v=EUXnJraKM3k) that made the rounds a couple of years ago. Sometimes life is stanger than fiction.

Microsoft spent a lot of time considering their options on how to market and package their product and then they chose this marketing path, for better or worse. What bugs me is that, in my bias against Redmond, I actually imagine the corporate upper management in Redmond still has no idea that this is an issue. As long as the Enterprise users are happy, then they are free to decide whatever they wish. And that is a very frustrating thought. And it helped drive me to the Mac when ME came out.


Dennis


2007-02-06, 23:20 MST
Edit: Added something I forgot to mention, along with the link to the iPod parody ad

[Philip Colmer]

The best option for everyone that buys their product, to minimize the likelihood of issues on the individual machines, is to install the product cleanly, not on top of any old and potentially damaged code (I'm not expert in this, but I know what it looks like when not done well). What does Microsoft do? They offer their product for upgrade that apparently dows not allow this to occur.
Putting aside the fact that it is possible to work around this limitation, primarily because your Average Joe might not find out how to work around it, performing a Vista upgrade is very different from performing, say, a Windows 2000 to Windows XP upgrade.

Vista does not install itself over the existing operating system. It moves user settings &amp; documents to a safe location, deletes everything it is replacing, installs and then restores the user settings &amp; documents.

This does mean that there is some stuff left behind that you wouldn't have if you did an entirely clean install, but the upgrade process is achievable by your Average Joe ... whereas a clean install and then putting all of your settings back is a bit harder and more involved.

ExtremeTech have run a test (http://www.extremetech.com/article2/0,1697,2089952,00.asp) comparing the performance of various versions of OS - clean install, upgrade, XP, Vista - to see whether or not it actually makes any difference to the system. Their conclusion:

The results of these tests make it fairly clear: in terms of performance: There's not much of an argument for a clean installation over an upgrade. Windows Vista's image-based installer seems to do the trick.

...

If, however, you're dying to tool around with Vista—and you're brave—there's no reason in terms of performance not to try an in-place upgrade over Windows XP. Note that if you're still piloting a 9x version of Windows, an in-place upgrade isn't an option: You'll have to do a clean installation.
--Philip

[Phronetix]

Vista does not install itself over the existing operating system. It moves user settings &amp; documents to a safe location, deletes everything it is replacing, installs and then restores the user settings &amp; documents.

This does mean that there is some stuff left behind that you wouldn't have if you did an entirely clean install, but the upgrade process is achievable by your Average Joe ... whereas a clean install and then putting all of your settings back is a bit harder and more involved.


Okay, this makes more sense. This is similar to the OS X "Archive and Install" Option, which most people who upgrade tend to perform. I have done it once, but was unsatisified, and redid my installation later.

This makes the Vista upgrade versions perhaps a little more viable for the average user, but it essentially is a tax for those who know something about computing.

[Jason Dunn]

I don't think ignorant is quite the right word. If you ask a non-techie or even a lot of techies, XP meets most of their perceived needs. Sure, Aereglass and the 3-D window tabber thingy are pretty cool, but not reasons to update.

But that's my point - users are ignorant (lacking knowledge) about what Vista is and what it can offer them. If they think it's only Aero Glass, then they lack knowledge about Windows Vista, and it's up to Microsoft to clearly make the pitch about why Vista is better than XP.

[Jason Dunn]

Jason, I am going to ammend two things that you said. First, Best Buy will undoubtedly also carry Vista Business.

Yeah, you're right:

http://www.bestbuy.ca/catalog/dept.asp?langid=EN&amp;catid=21202&amp;CMP=ILC-BBY_hmpage_slide1

I guess the question is though, does a consumer feel confused by a box that says "Business" or is the difference quite clear to them? I know many (most?) people use their PCs for a mixture of business and personal, so maybe it will confuse them...

Windows XP has been for a while now much cheaper than when it first came out. Now I don't know how long it took it to drop, but I'd say SP2 at the latest.

Hmm. Are you sure about that? &lt;goes and does some research>

This article from 2001 (http://news.com.com/Gates+takes+wraps+off+Windows+XP/2100-1001_3-274939.html) says:

"Windows XP Home Edition will be available as an upgrade version for $99. The full version of the OS will cost $199. Windows XP Professional will cost $199 for the upgrade and $299 for the full version, according to Microsoft."

Now when I visit Best Buy.com today I see the following:

Microsoft Windows XP Home Edition Upgrade: $99 USD
Microsoft Windows XP Professional Edition Upgrade: $199 USD
Microsoft Windows XP Home Edition: $199 USD
Microsoft Windows XP Professional Edition: $299 USD

So from what I can see, Microsoft has never dropped the price of XP - and I don't expect them to drop the price of Vista either.

[Jason Dunn]

The best option for everyone that buys their product, to minimize the likelihood of issues on the individual machines, is to install the product cleanly, not on top of any old and potentially damaged code (I'm not expert in this, but I know what it looks like when not done well). What does Microsoft do? They offer their product for upgrade that apparently dows not allow this to occur. They help drive the first nail into the proverbial coffin. Okay, that was a bit of a dramatic metaphor. Why do they do this? I believe it is so Jason (and his fellow MS evangelists, sales persons, experts) can say stuff like this...

Let me ask you a question: when you think about people buying upgrades for Windows Vista, regular Joes going into a local computer store to get this "Vista" thing, do you think they have ANY idea what a "clean install" is? No, absolutely not. The entire concept of a clean install is the domain of geekdom. Average users are going to install Vista onto their current machines running XP, and they'll pay the less expensive price. So my points about pricing are perfectly valid.

You're projecting you're own anger/frustration over the changes in the way upgrades are being handled because for the way YOU (and most geeks, myself included) work the new system is a bit of pain in the butt. Do I wish upgrades worked like they used to? Yes. Do I think the sky is falling in like you do and that the upgrades are some sort of "scam"? No, absolutely not.

[Jason Dunn]

Okay, this makes more sense. This is similar to the OS X "Archive and Install" Option, which most people who upgrade tend to perform. I have done it once, but was unsatisified, and redid my installation later.

But what if, just maybe, the Vista approach is better than the OS X approach? Maybe Microsoft spent resources making the in-place upgrade better than anything they've done before (or what Apple has done) and it's really a perfectly valid approach? Look, doing an in-place upgrade makes me SHIVER because it's always been a HORRIBLE idea...but just like I've had to adjust to the idea that having five partitions on a big hard drive isn't the best idea from a performance point of view, maybe I have to adjust to the fact that an in-place upgrade isn't the end of the world. ;-)

This makes the Vista upgrade versions perhaps a little more viable for the average user, but it essentially is a tax for those who know something about computing.

I disagree - the people who "know something about computing" will do the upgrade trial > upgrade trick. I know that's what I'll do. Am I happy that I have do to that? No way. But is it a blocking issue, or one that will force me to buy the full-priced version? No way. Hell, the geeks will just go purchase the OEM version - the OEM full version of Vista Home Premium is only $139 CAD from Memory Express. That's $31 less than the retail price of the UPGRADE. So what are you complaining about? ;-)

[alanjrobertson]

If you think you've got pricing issues - try living this side of the pond!

From http://news.bbc.co.uk/1/hi/technology/6309651.stm -

"But Microsoft could face a backlash from consumers over its pricing plans - with the cost of Vista versions in the US roughly half the price of equivalent versions in the UK.

Prices for the OS in the UK range from about £100 for an upgrade version of the Basic package to £249 for a copy of the upgrade to the Ultimate version of Vista.

In the US prices start from $100 (£52) for an upgrade of Vista Home basic to $249 (£127) for the equivalent Ultimate version."

Bill Gates was quoted in an interview saying something about 'stability' and that he hadn't seen the 'latest exchange rates' - well it hasn't been $1:£1 for I don't know how long and we're currently bumping up against $2:£1 and have been for a good few months!

Thankfully the OEM versions seem to be a bit closer in terms of relative pricing.

Alan

[Jason Dunn]

Prices for the OS in the UK range from about £100 for an upgrade version of the Basic package to £249 for a copy of the upgrade to the Ultimate version of Vista. In the US prices start from $100 (£52) for an upgrade of Vista Home basic to $249 (£127) for the equivalent Ultimate version."

That'st just....bizarre!! 8O

[Phronetix]

The best option for everyone that buys their product, to minimize the likelihood of issues on the individual machines, is to install the product cleanly, not on top of any old and potentially damaged code (I'm not expert in this, but I know what it looks like when not done well). What does Microsoft do? They offer their product for upgrade that apparently dows not allow this to occur. They help drive the first nail into the proverbial coffin. Okay, that was a bit of a dramatic metaphor. Why do they do this? I believe it is so Jason (and his fellow MS evangelists, sales persons, experts) can say stuff like this...

Let me ask you a question: when you think about people buying upgrades for Windows Vista, regular Joes going into a local computer store to get this "Vista" thing, do you think they have ANY idea what a "clean install" is? No, absolutely not. The entire concept of a clean install is the domain of geekdom. Average users are going to install Vista onto their current machines running XP, and they'll pay the less expensive price. So my points about pricing are perfectly valid.


I understand and agree with you here, Jason. What frustrates me about it is that Microsoft allows it to happen. Why can't they simply offer only full installs? What's wrong with allowing everyone a quality full install but making the process easy, and by making the version selection easier? Would that really kill them?

Elsewhere you mention that a non-clean install may very well be good enough. That may, in fact, be true, so maybe I'm making an argument without enough knowledge to back up my claims.


You're projecting you're own anger/frustration over the changes in the way upgrades are being handled because for the way YOU (and most geeks, myself included) work the new system is a bit of pain in the butt. Do I wish upgrades worked like they used to? Yes. Do I think the sky is falling in like you do and that the upgrades are some sort of "scam"? No, absolutely not.

I think the sky is falling in? Aw, come on, man... you're the one who gave my rant legs by dragging it and your response to the front page. :wink:

It does affect the average Joe over you and me because they, by default, get an inferior install. I just cannot comprehend why Microsoft would find this a satisfactory situation. It seems to just create a set up for consumer problems and further bitterness toward them.

It is an injustice to me. But I don't use Windows on my Macs (yet), so my frustration really is more incredulous, and my points I made in my original post were more to stimulate discussion about something that really had not been talked about yet, at least here, the only place where I get Windows related info. I think that Microsoft can do better, and they should offer full versions for fairer prices, or just kill the differentiation like Apple does with its Mac OS X upgrades.