Windows 7 pricing thoughts - Is Windows too expensive?

I'm really hoping that Steven Sinofsky will kick off a discussion about Windows 7 pricing over on the Engineering Windows 7 blog sometime soon. I'm not holding my breath because the chances of seeing an open debate on pricing is highly unlikely, but I can dream, can't I?

I'm really hoping that Steven Sinofsky will kick off a discussion about Windows 7 pricing over on the Engineering Windows 7 blog sometime soon. I'm not holding my breath because the chances of seeing an open debate on pricing is highly unlikely, but I can dream, can't I?

My take on the issue of Windows pricing is that as things stand, Vista (OEM, upgrade and new license) is too expensive compared to the price of hardware. When a decent PC cost $1,000+ it wasn't unreasonable that an OEM copy of the OS system builder would set you back some $100+, but now that you can put together a good quality PC for $260, it really doesn't make sense that buying Windows Vista should add a third again to the price.

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I think that deep down, Microsoft knows that Vista is too expensive. Back in February we saw Microsoft do something that it's not well known for and cut the price of certain upgrade editions of Vista (Vista Ultimate dropped from $299 to $219, while Home Premium went from $159 to $129).

Another thing that Microsoft could do to help home users who have more than one PC is introduce a family pack such as the one that Apple has (5 licenses for $199). I think that something like this from Redmond would encourage upgrades and help to make piracy a less attractive option.

Given the reception that Vista has had, along with the price drop we saw in February, I wouldn't be surprised to see Windows 7 coming entering the market at a cheaper price point.

Aside ...

Just for laughs I decided to pay Dell (a company gaining market share at the expense of the bottom line at present) a visit and see what the price difference was between an Ubuntu-powered system and one running Windows. I configured two XPS M1330 notebooks (Ubuntu|Windows) to have a similar spec (I couldn't get them exactly the same because the wireless network card differed between the two ... not that it matters that much).

Here's what I ended up with:

Ubuntu:

Ubuntu M1330

Vista:

Vista M1330

So with that "instant saving" (I'm assuming that Dell isn't being charitable here and making a loss on every Ubuntu-powered XPS M1330 it sells) the Ubuntu XPS M1330 is $420 cheaper than the Vista Home Premium XPS M1330. If you want Windows Ultimate than that'll set you back and extra $150, making the XPS M1330 $1,599. Based on those prices I could buy the Ubuntu-powered XPS M1330 and buy a copy of Vista Ultimate OEM from Newegg.com for $170 and save a whopping $400 (incidentally, the price difference on Newegg between OEM Home Premium and OEM Ultimate is $70, not $150).

Where do you stand of the issue of pricing?

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