Microsoft’s business model for Windows has historically been complex, with a mix of different editions, a partner-centric sales channel, and Byzantine licensing rules. Throw in a 10-year support lifecycle aimed at long-term business use and you have the perfect recipe for bumpy transitions between Windows versions.
That’s the backstory behind today’s announcement that Windows 7 Pro will remain available for sale on new PCs for at least a year longer than what historically would have been its end-of-sales date.
Businesses have voted with their pocketbooks: Windows 7 Pro is the long-term support edition, especially well suited to traditional PC form factors; Windows 8 and beyond will predominate in consumer channels, especially on smaller, touch-enabled devices intended for mobile use.
This shouldn’t be a surprise to anyone. I predicted this would happen in 2011, a year before Windows 8 was released:
[H]istory suggests that Windows 7 will continue to dominate the business segment for years after Windows 8 is released. To understand why, you have to look at how Microsoft's enterprise customers make technology adoption decisions.
If you have tens or hundreds of thousands of users, deploying a new OS is an expensive and complicated proposition, and it isn't done without extensive preparation.
Over the past two years, businesses that use Windows as their primary desktop OS have been testing, remediating, piloting, and deploying Windows 7. There's a certain urgency to that process, as extended support for the widely used Windows XP is due to end in April 2014.
Will those same businesses then turn around and begin planning deployments of Windows 8? Highly unlikely, given the sales and support lifecycle for Windows 7. In fact, Microsoft encourages its business customers to take a long-term view with this sort of deployment, offering a full 10 years of extended support for business editions of Windows.
And that's exactly what's happened, with the extra kickers of a slowdown in PC sales, a boom in tablets like the iPad, and a pushback among traditional PC buyers against the dramatic changes in the Windows 8 user experience.
Enterprise deployments are essentially immune from the Microsoft sales lifecycle. In big organizations, IT departments buy Volume License editions of Windows that give them the freedom to deploy a consistent image of whatever Windows version they’ve chosen as their corporate standard.
Today’s announcements make it easier for small and medium-size businesses to get some of that flexibility. By the end of this year, new consumer PCs with Windows 7 will become increasingly difficult to find. But business PCs with Windows 7 preinstalled will continue to be sold for at least another year, and probably well beyond that.
In this post, I’ve got answers to questions that consumers and business buyers are likely to have about the change.
Why is Microsoft doing this?
It’s all about the average selling price of Windows desktop licenses sold with new PCs.
Historically, Microsoft has offered a broad range of Windows editions at different price points. Consumer editions cost less; business editions cost more. By cutting off sales of Windows 7 Home Basic and Home Premium, Microsoft shifts the price mix upward.
With Windows 8 and 8.1, Microsoft simplified the mix even more, cutting its lineup down to just two: a standard edition and a Pro edition. Read through Microsoft’s financial reports for the past year and you’ll see that the company has managed to keep Windows revenues stable in a declining PC market by increasing the percentage of Pro copies sold.
How long will I be able to buy a retail copy of Windows 7?
Microsoft stopped offering shrink-wrapped retail copies of Windows 7 to resellers effective October 30, 2013, but the channel has enough retail copies of full licenses and upgrades to last for a long, long time. How long? Well, Microsoft ended retail sales of Windows XP on June 30, 2008, and yet you can find legal, shrink-wrapped copies of those products from resellers even today, with minimal searching.
Does this affect the end-of-life dates for Windows 7 support?
No. The sales lifecycle is a totally separate set of dates from the support lifecycle.
Extending the sales lifecycle for Windows 7 Pro does not affect the support milestones for Windows 7. You can find the full details for all versions of Windows and Office here: When will Microsoft pull the plug on your version of Windows or Office? For Windows 7, the support dates are the same as they’ve ever been.
Windows 7 RTM support ended in April 2009. For Windows 7 with Service Pack 1, Mainstream support ends January 13, 2015; the Extended support period ends on January 14, 2020, after which no security updates will be made available.
When will sales of Windows 7 consumer PCs end?
OEMs like Dell and HP have already made it difficult to find PCs running Windows 7 Home Premium. In fact, when HP introduced three Windows 7 desktop PCs last month alongside its 33 Windows 8.x machines, it was treated as headline news.
Even today, Dell is offering Windows 7 Home Premium as an option on some machines, but you'll pay a $50 premium to replace the standard Windows 8.1.
Under Microsoft's rules for its royalty OEMs, those machines can no longer be offered for sale after October 31, 2014. If you want to buy a new PC with Windows 7 preinstalled, you'll have to go to the business side of the store and buy a PC with the pricier Windows 7 Pro preinstalled.
What about Windows 7 PCs that are already in the sales channel?
OEMs can continue to build new PCs with consumer versions of Windows 7 up until the deadline of October 31, 2014, and stockpile them or ship them to retailers and distributors. Those PCs will continue to be available for sale as long as they’re in stock. In practice, that means the stock will shrink over time but you will still be able to find them for months or years after the end-of-sales date.
Can my neighborhood PC seller still build me a Windows 7 PC?
Yes, so-called System Builders can install Windows 7 on new PCs and resell them as long as they use a sealed copy of Windows 7 OEM software. Microsoft will continue to make OEM copies of Windows 7 Pro available for resellers on the same timetable as large OEMs. System Builders will be able to buy consumer OEM versions of Windows 7 (Home Basic, Home Premium, and Ultimate) from any reseller who has it in inventory.
How do today’s changes affect downgrade rights?
These changes make it possible for PC manufacturers to continue to offer new PCs with Windows 7 Pro preinstalled until at least October 31, 2015, with a reasonable likelihood of the actual end-of-sales date being extended even further.
The changes have no effect on downgrade rights, which allow you to buy a new PC with an OEM license for a business edition of Windows and then install an earlier version. In order to take advantage of downgrade rights today, you must purchase a new PC with an OEM license for Windows 8 or 8.1 Pro (PDF). That license includes the following provision:
Can I downgrade the software? Instead of using the Windows 8.1 Pro software, you may use one of the following earlier versions: Windows 7 Professional or Windows Vista Business.
This agreement applies to your use of the earlier versions. If the earlier version includes different components, any terms for those components in the agreement that come with the earlier version apply to your use of such components. Neither the manufacturer or installer, nor Microsoft, is obligated to supply earlier versions to you. You must obtain the earlier version separately. At any time, you may replace an earlier version with Windows 8.1 Pro. To enable downgrade on this computer to Windows 7, you must change the settings to boot into legacy BIOS mode. If the BIOS setting is not changed back to native UEFI mode boot prior to installing Windows 8.1 Pro, Windows 8.1 Pro will install; however, the following Windows 8.1 Pro functionalities will not work as they rely on UEFI mode boot:
- Secure Boot,
- Seamless Boot experience,
- Network unlock for Bitlocker for computers with a Trusted Platform Module (TPM), and
- eDrive support.
The easiest way to exercise downgrade rights is to buy a new PC with the downgraded version installed by the OEM. That configuration means you have full support from the OEM for Windows 7 Pro. The PC you buy includes media for Windows 8.1 and the right to upgrade to that version (also with support from the OEM) at any time.
Those PCs are widely available for sale today, as I noted last month (see Where can you still find a PC running Windows 7?) Most of those models are sold with a Windows 8 Pro license and Windows 7 installed as a downgrade.
Here, for example, is how Dell is selling its business-class Optiplex PCs today.
If Microsoft had followed its normal sales lifecycle, Dell would have had to pull Windows 7 Pro PCs from its online store at the end of October. But sales of PCs with Windows 7 Pro installed via downgrade rights can continue as long as current license agreements permit them.
What if my organization has a Volume License edition of Windows?
Volume Licenses for Windows clients include the right to downgrade to any prior version of Windows. This right is considerably more generous than the normal OEM downgrade rights, which restrict you to only the two previous versions of Windows. The installation media for exercising downgrade rights are available from Microsoft’s Volume Licensing Service Center.
What PCs should my business be buying?
That's an easy answer. As I argued, successfully, in ZDNet's recent debate, Windows 7 PCs are a dead end for business. Instead, you should be buying PCs that support Windows 8 and using downgrade rights to maintain your Windows 7 deployment:
[W]hen you buy a PC designed for Windows 8, you get two huge security benefits: Secure Boot with UEFI and pervasive encryption on all devices that meet the InstantGo standard, even if they’re running a consumer version of the OS.
Windows 7 is a perfectly good enterprise OS for the present. But when buying new PCs, you need to plan for the future. That’s why Windows 8 PCs, with downgrade rights to Windows 7, are the perfect compromise.
There will be a natural temptation to save a few dollars by picking up older PC designs from the clearance shelf. If you do that, you're setting yourself up for disappointment later.