Windows 7 upgrade pricing is too expensive

Windows 7 upgrade pricing is too darn expensive. There, I've said it, and I feel better for having that out in the open. And not only is the upgrade pricing expensive, it's overly complicated.

Upgrade:

• Windows 7 Home Premium (Upgrade): $119.99
• Windows 7 Professional (Upgrade): $199.99
• Windows 7 Ultimate (Upgrade): $219.99

Full:

• Windows 7 Home Premium (Full): $199.99
• Windows 7 Professional (Full): $299.99
• Windows 7 Ultimate (Full): $319.99

[poll id="471"]

Hello, earth to Microsoft. We're all in the middle of a recession here. On top of that, $320 for an OS is a hefty chunk of change. Heck, looking at hardware prices, especially looking at how prices have dropped over the years, $200 is a lot. It seems too me that Microsoft is living in a different decade.

Note: I'm ignoring OEM pricing here ... OEMs are perfectly capable of chiseling prices down, and if they figured out how to embrace Linux, they'd have even greater power over Microsoft.

And what's up with those upgrade prices? I really can't see how $100 separates Home Premium and Ultimate.

Temporary promotional price does take a little of the sting out of the prices. Between June 26, 2009 and July 11, 2009 (in the US) you can grab Windows 7 Home Premium Upgrade for $49.99 (and save $70) and Windows 7 Professional Upgrade for $99.99 (and save $100). Bottom line, I feel that these promotional prices should be the the starting point for the recommended retail pricing.

How could Microsoft simplify upgrade pricing? Simple, offer a single priced upgrade for like for like upgrades. So, if you're running Vista Home Premium then you can upgrade to 7 Home Basic for the same price as someone upgrading from Vista Ultimate to 7 Ultimate. Unlocks to higher editions could be handled separately (by Anytime Upgrade).

Comparisons to Mac OS X upgrades ... -->

Comparisons to Mac OS X upgrades ...

As I was finishing this piece I noticed that Ed Botthad posted a piece comparing Windows 7 upgrades to Mac OS X 10.6 "Snow Leopard" upgrades. This piece offers an interesting price comparison, but it misses the point on several key issues:

1. Microsoft to Apple is an apples to oranges comparison since no upgrade path exists between the platforms.
2. Ed is "shocked" that only Mac OS X 10.5 user can upgrade ... this was clearly stated in the keynote speech at WWDC.
3. Yes, people who are running PowerPC Macs are left out in the cold, but it's not like Microsoft's never left people out in the cold in the past. that's technology for you.
4. I'm not sure what point Ed is trying to make when he brings up people who originally bought Mac OS X 10.5 systems and later "paid Apple $129 for a copy of Leopard at some point along the way." I can't see how this is any different to people who bought XP-based systems and bought an upgrade to Vista. To be honest, I don't see how price paid for an upgrade (especially in a home environment) really matters much. The consumer made the choice to upgrade, paid for the upgrade and moved on.
5. According to NetApplications, the split between Mac OS X 10.4 and Mac OS X 10.5 systems is 2.49% to 6.39%. Based on this data I would say that it is inaccurate to say that "the majority of Mac owners don’t qualify for that pricing." It's hard to present definitive data, but NetApplications' data is better than no data.
6. There's a total failure to acknowledge that millions of Mac users will be entitled to upgrade to the new OS for $29.
7. There's a failure to acknowledge that Apple offers a Mac OS X 5-user "Family Pack" for $199. Home users who have multiple Windows-based systems are left out in the cold. Qualifying users will be able to pick up a 5-user pack for $49.
8. There's a failure to acknowledge that the $169 Mac Box Set contains the OS, iLife and iWork.
9. Finally, Mac OS X 10.5 "Leopard" is a popular OS. Compare this to Vista, which is an OS that Microsoft is trying to erase from the memories of Windows users. Apple doesn't need to price its OS competitively, yet it has. Microsoft does, but it has chosen not to.

But bottom line, comparing Windows upgrade to Mac upgrades is comparing apples to oranges, and any data drawn from the comparison to try to make the Windows upgrade pill easier to swallow is, in my opinion, worthless.

[UPDATE: Couple of additional points raised in TalkBack/emails that I think are worth addressing:

1. Ed said something interesting: "Apple’s $29 pricing decision is a clever one. They’re counting on gullible reporters and analysts to make oversimplified comparisons with Windows 7, and they’re hoping to goad Ballmer and Company into reacting with a slashed price of their own. If Microsoft is smart, they won’t take the bait." I don't buy this. In fact, I'm going to spin this around and suggest that Microsoft is the one relying on gullible reporters and analysts to make oversimplified comparisons. After all, it is the one wrapping an archaic and confusing pricing model with price cuts in an attempt to make the bitter pill easier to swallow. The upgrade model I suggest where people can move from equivalent editions for a flat fee makes more sense.
2. The only reason I can come up with as to why some hardcore Windows pundits are desperate to dismiss Apple's $29 upgrade is that there's nothing similar in the Microsoft world. And it has to be noted that the $29 upgrade is not some time-limited offer, it's for the life of Snow Leopard. In fact, as I've said before, it's hard for any company to step away from a price cut, so this could be setting a precedent where Apple is rewarding loyal customers with a cheaper upgrade. I can't see anything wrong with that.
3. Until Microsoft starts offering a cheap Family Pack upgrade for home users with multiple PCs, upgrades will aways be pricey for home users.]

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