Microsoft simplifies the Windows 7 lineup

Microsoft has finally released details of how it’s going to distribute and sell Windows 7. Like virtually every other announcement in the Windows 7 development cycle so far, the final decision appears to be aimed at handling a common objection – in this case, the perception that there are too many editions of Windows Vista.

The final lineup isn’t as clean as some would like (my colleague Mary Jo Foley says she’s “still confused” by at least one of the lineup decisions, and she calls the proposed netbook solution “ugly.”

So what are the details?

For those of us in the developed world, there are only three editions that matter:

Windows 7 Home Premium – This is the successor to Windows Vista Home Premium, and Microsoft expects it to be the most common edition sold, the standard for virtually all consumer PCs. It includes the Aero interface with its Windows 7 enhancements, plus Windows Media Center, DVD playback support, and multi-touch and handwriting features. I’m also told (but can’t yet confirm) that image-based backup is included in this edition for the first time.

Windows 7 Professional – This edition drops the Business label used in Windows Vista and goes back to the old XP-era name, presumably to give XP users more comfort in their upgrade decision. Unlike Vista Business, this edition contains all features in the Home Premium edition, including Media Center. For the extra cost, you get more traditional business features like the ability to join a Windows domain, group policy based management tools, Remote Desktop host capabilities, network-based backup features, and support for the Encrypting file system.

Windows 7 Ultimate/Enterprise – In the retail channel, this edition will be called Ultimate; for corporate customers with a Select license agreement, it will be called Enterprise. In either case, the feature set includes everything in Professional edition plus support for BitLocker whole-drive encryption (and the new BitLocker To Go feature, which adds high-grade encryption to removable media). This edition also includes all supported language packs (those cost extra for other editions) and the capability to boot from a VHD.

Microsoft is de-emphasizing the Ultimate edition, which has only been able to gather a tiny share (a Microsoft told me yesterday that Ultimate's share is in the 3-5 percent range). It will still be available, but primarily for those who want BitLocker and as a premium upgrade for super-high-end machines where the Ultimate name might add some cachet.

The real news is that each edition is a superset of the one before it. That means you can upgrade from, say, Home Premium to Professional by purchasing an upgrade key and then “unlocking” the additional features. The entire process takes 5-10 minutes, I’m told by people who’ve tested it, and involves none of the hassles of the current upgrade strategy, which requires a complete reinstallation.

So what happened to those other editions? They’re still around, but your ability to buy them is highly constrained.

Windows 7 Home Basic, which lacks the Aero interface, will be available for sale only in emerging markets and will not legally be available for sale in the U.S., Western Europe, Japan, and other developed countries.

Windows 7 Starter Edition, with its artificial restriction on performance (you can only run three simultaneous programs) will be available for sale worldwide, but only as a preinstalled operating system on OEM-built PCs "limited to specific types of hardware." Microsoft is clearly confident that it has pared down the resource requirements of Windows 7 Home Premium so that it will run acceptably on the generation of netbooks that will be current when Windows 7 arrives later this year. It’s hard to imagine the Windows 7 Starter Edition name being much of a selling point. Microsoft may even be taking the calculated risk of discouraging Windows 7 from being installed on underpowered notebooks and triggering disappointing reviews.

The crucial element missing from today's announcement is pricing. Microsoft's Mike Ybarra, General Manager for Windows, told me yesterday that we can expect "aggressive price points and some very good offers" when Windows 7 is released.

In my estimation, the biggest news in this announcement is the change in how the upgrade process works. Microsoft’s Anytime Upgrade program was a complete failure in Windows Vista. But the revamped version has a much better chance of drawing in upgrade dollars, a topic I’ll look at more closely in a follow-up post.