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Microsoft Holds the Line on Windows 7 Pricing, Launches Limited Time Promotion

Jun. 25, 2009 Paul Thurrott | Paul Thurrott's Supersite for Windows

This is from this morning's WinInfo, but I want to make sure everyone caught it.

Microsoft this morning announced its retail pricing plans for Windows 7. First, the good news: Contrary to rumors, the company is not raising prices. The bad news? It's not significantly lowering prices either. In fact, most versions of Windows 7 will simply cost exactly the same as their Windows Vista predecessors.

In the US, three versions of Windows 7 will be widely available at retail, Windows 7 Home Premium, Professional, and Ultimate. Pricing for the Upgrade versions of these products breaks down as follows:

Home Premium (Upgrade) - $119.99
Professional (Upgrade) - $199.99
Ultimate (Upgrade) - $219.99

Full product pricing includes:

Home Premium (Full) - $199.99
Professional (Full) - $299.99
Ultimate (Full) - $319.99

In each case, Windows 7 Professional and Ultimate is priced identically to its Windows 7-based predecessor. Windows 7 Home Premium (Upgrade) is $10, or 8 percent, cheaper than Windows Vista Home Premium (Upgrade). And Windows 7 Home Premium (Full) is $40, or 17 percent, less expensive than its predecessor. (Similar pricing is available in other markets as well.)

To help avert criticism, Microsoft and its retail partners will temporarily offer steep discounts on the Upgrade versions of Windows 7 Home Premium and Professional only. Consumers who preorder these products online between June 26, 2009 and July 11, 2009 in the US and Canada will pay just $49.99 for Windows 7 Home Premium (Upgrade) (a $70 savings) and $99.99 for Windows 7 Professional (Upgrade) (a $100 savings). The deals will be made available at Amazon, Best Buy, and Microsoft, and at other participating online retailers. Consumers in Japan, France, Germany, and the UK can also preorder Windows 7 for similarly short time frames, though the exact dates vary.

Microsoft also announced that it would allow consumers who purchase a Windows Vista-based PC between June 26, 2009 and January 31, 2009 to receive a free copy of Windows 7. Called the Windows 7 Upgrade Option Program, this program is global and completely free. Microsoft hopes it will address the problems caused by Windows 7 not shipping in time for the back to school PC selling season, which is currently underway.

The company also revealed that it will offer consumers in the EU the Full versions of Windows 7 only through at least December 31, 2009 because of antitrust issues there which preclude it from bundling Internet Explorer with the OS. During this time period, EU users (excluding the UK) will be able to purchase the Full versions of Windows 7 at the Upgrade prices. Traditional Upgrade versions of Windows 7 will appear in the EU eventually, Microsoft says, at which point it will return to its usual pricing structure.

There's a lot more going on here, including a few pricing issues that have yet to be resolved. For more information, please refer to my Windows 7 Pricing article on the SuperSite for Windows.

Discuss this Article 168

shark47
on Jun 25, 2009
"Ocean 1) No. Lyons says he was running the beta. " Oooh, he's a bigger idiot than I thought he was. Beta software crashes? Wow! That's news. Instead of cribbing about the $120 upgrade, why don't you guys just buy it for $50 before July 11 instead? (Of course, if you were actually planning to buy it, that is.)
lotsamystuff
on Jun 25, 2009
"Being a Microsoft fanboy, I'd pay the regular prices as well." There are no Microsoft fanboys. "mikegalos" and others repeatedly tell us that, Jabba. Stop pretending. ;-)
mikegalos@msn.com
on Jun 25, 2009
lotsa You were the one who made wild claims about equivalence and then got huffy when you were asked to back up your own claim. Of course you still haven't been able to back up your claim with facts. Not a big surprise.
DRWAM
on Jun 25, 2009
I love getting upgrade disc for free with a new computer. It gives a choice to move to the new OS or stay with the old if you prefer. Sharkster has the right optimistic attitude, pre-order and get the upgrade disc for $49. You know you want it, so buy 3 less pizzas and get the upgrade!
chuckb84
on Jun 25, 2009
"Everyone knows Apple's flunkies in the press are going to try to run their FUD engines on Win7. Their not bright people to begin with, and they never miss a chance to remind us in their writings." Oh, yes, "their" not bright people. That's what I here two. I'm embarrassed for you.
pmcgrath
on Jun 25, 2009
de Silentio Coming from Win 2000 on the Professional side, XP was a minor upgrade, a broken one at that. It wasn't until SP 2 that it was worth deploying. It was only a major upgrade for those coming from Win 9x. Server 2003 is also a minor upgrade. It added some features and the XP interface, but still basically Win 2000 server under the covers. So bottom line for me is I think the price is too high, especially for those of us who have already purchased Vista
stimshady
on Jun 25, 2009
i am definitely going to be buying (even if they do screw us in the UK!) - this is an awesome product. i think some people expect Microsoft to be a charity - it's business and they're in it to make money. end of. i wouldnt carry on it business just to make people happy and provide them with give-aways, in these tough times MS are standing their ground, if they give in now, it will stick with them for future versions of windows. fair play. they sell most new windows with new machines and to corporations, so even if you do upgrade (1% of users probably will - and pretty much 100% of people on this site are part of that 1%) then you're going to have to bite the bullet and shell out. one thing's for sure, there is not chance in hell that i'm going back to Vista after using 7 for the last 6 months. no effing way.
whiplash55
on Jun 25, 2009
crank Why not buy the upgrade for the somewhat reasonable price available starting tomorrow.
chuckb84
on Jun 25, 2009
"Do you think the price disparity will show up in an Apple ad? I'm pretty sure Justin Long & John Hodgman are currently practicing their lines." Count on it. You can almost imagine the script. Microsoft has just thrown away whatever traction they might have gained from the Laptop Hunter ads. And, Mike, I'm afraid you've missed the point. No one outside this group, and a few other 0.1% of the users are going to know or care about whether S.L. is "a few kernel upgrades" and/or Win7 is "user interface tweaks", etc. What everyone will see is $29, one low price, vs. higher prices, a complicated, version and time dependent upgrade system, even region dependent. You can here it now, "Upgrade to Snow Leopard for $29, instead of up to $319 to move to Windows 7." True statement. although not very relevant to most users. It won't matter. This walks right into the place where Apple wants Microsoft to go: complex, expensive, hard to understand, punitive to early adopters, etc. Set in context of the Vista fiasco, this will look even worse. Whether or not Vista WAS a fiasco is irrelevant; the perceptions will be the whole show. Microsoft had a golden opportunity to change its image and they were too dumb to take it. They could have taken the 'we're on your side" position, and probably at a fairly low cost. Consider the free PR that Microsoft could have gotten by making upgrades simpler and cheaper and weigh that against the $300M they are spending on advertising. Corporate DNA strikes again. They just can't help it.
Master3
on Jun 25, 2009
"Oh, yes, "their" not bright people. That's what I here two. I'm embarrassed for you." I'll give you a minute before the rocks start to do damage to your glass house.
Master3
on Jun 25, 2009
" chuckb84 said: "Do you think the price disparity will show up in an Apple ad? I'm pretty sure Justin Long & John Hodgman are currently practicing their lines." Count on it. You can almost imagine the script....." So in other words, Apple is going to lie. Again. "Our OS service pack upgrade is only $20! It wont work on your PC and you will have to buy our more expensive hardware to use it! So in the end you will lose money on the whole exchange, but we think your are too stupid to notice, cause we are Apple, and we are too cool to be honest!!!!!" Yeah, Chuck, you guys just go roll with that. It'll be killer...
rr0de74@live.com
on Jun 25, 2009
Microsoft had a chance to really make a difference for once and they blew it. Had they done something for consumer Vista users with a special upgrade price for those on Vista, as in like Apple did they could have made the "new windows" release even more special and capture even more POSTIVE press. This pricing will just get ridiculed in the IT press world, especially after what Apple did with Leopard upgraders. I agree that Apple is already filming "The Price" ad ready to drop on the day Windows 7 ships. At least the bing ads are good.
mikegalos@msn.com
on Jun 25, 2009
chuck "Microsoft has just thrown away whatever traction they might have gained from the Laptop Hunter ads." You think someone buying a new laptop will suddenly find a $2,200 Apple laptop an appealing choice because the $700 Windows Vista laptop that meets their actual needs now includes a coupon for an upgrade to Windows 7? Care to explain how that works.
mikegalos@msn.com
on Jun 25, 2009
Master3 You forgot, "Oh, and to those of you who bought those insanely expensive Power Mac G5s three years ago because we told you how Intel sucks and PowerPC was the future... Oopsie. No upgrades for you. Maybe you can dump it on somebody on ebay who hasn't heard we've abandoned it."
realtestman
on Jun 25, 2009
rickhuizinga, you paid for Ultimate. If you want to keep it all, then you'll have to pony up. In fact, why did you even buy Ultimate in the first place when you didn't need the features? Oh yeah, cos of the "Extras". That's your fault for being misled. Everyone else buys Windows for the features it has, not for the features they THINK it's going to have.
chuckb84
on Jun 25, 2009
""And as I previously expressed (see Pricing Malfunction: How Microsoft will Bungle the Windows 7 Launch in WinInfo), Microsoft's byzantine approach to this could seriously derail excitement..." The fact that Paul needed three pages, two product matrix charts and over 1,300 words to describe Microsoft's pricing scheme in his overview is really telling. I know his motto is "never write one word when ten will do", but still. Pretty remarkable that it's so complex." Exactly. It's "If MIcrosoft Made the iPod Product Packaging" all over again. Just amazing that that video was made internally at Microsoft and they Still. Just. Don't. Get it. Apple and the IT press will have fun with this. Paul really tried to warn Microsoft and they walked right into it, just as he said they would.
mikegalos@msn.com
on Jun 25, 2009
chuck Actually, the Windows 7 packaging is very simple. See: http://windowsteamblog.com/blogs/windows7/archive/2009/06/23/check-out-t...
Master3
on Jun 25, 2009
"rr0de74@live.com Microsoft had a chance to really make a difference for once and they blew it. Had they done something for consumer Vista users with a special upgrade price for those on Vista, as in like Apple did they could have made the "new windows" release even more special and capture even more POSTIVE press." By what? Selling their OS at the same price as a minor service upgrade? What third-rate hack tech writer is going to really make a total idiot of themselves by making such an argument? (other than the usual idiots) "This pricing will just get ridiculed in the IT press world, especially after what Apple did with Leopard upgraders." Ok, I see. This was the whole point of Apple doing this. In the past they charged 120 dollars for all of their new OS releases. So they pump this service upgrade as if it is a whole new OS, which it is not, but charge 20.00 for it, knowing that MS isnt going to charge $20 for a major OS release. H3ll, Apple, when they release the real successor to Leopard/Snow Leopard isnt going to charge 20.00 for it, but that's not the point they want people to pay attention to. What they are hoping for is that their legion of trolls and biased tech writers completely ignore all of the above and basically lie on their behalf pushing the talking point, that I have seen on several boards today, that while "M$" is being evil and charging you oh so much for their OS, holy Apple wants to just make you life better by practically giving their OS away! Hugs!!!!! And the astonishing thing is that, as we have seen here, Apple's dingbat fans are actually hoping for them to blatantly lie in a TV ad making this same claim! Apple knows the machine it has, and how brainlessly easy it is to get their little cogs to work their magic on cue. Give them a talking point and watch them breathlessly run with it.
chuckb84
on Jun 25, 2009
It looks like the points, rebuttals, and rebuttal-rebuttals have been made. Now we wait and see what the world at large makes of this. Paul predicted this scenario and what the consequences can be. I think he was right in principle, but the question is the size of the effect. Dramatic? Irrelevant? We'll see: http://windowsitpro.com/article/articleid/102303/pricing-malfunction-how...
shark47
on Jun 25, 2009
"Apple and the IT press will have fun with this. Paul really tried to warn Microsoft and they walked right into it, just as he said they would." They're going to mock Windows 7 whether it costs $0 or $200. So, Microsoft should ignore them and do what's best for OEMs, shareholders and users. All three groups obviously have competing objectives, so the optimal solution is one that sort of pleases everyone. Good job, Microsoft.
JoshW
on Jun 25, 2009
No one is mentioning the fact that if your PC supports it your basically getting free XP on the higher end versions of 7. Also I wouldnt class it as a minor update. However as someone said this morning why is it is somthing is $200 its £200 no exchange rates?
JoshW
on Jun 25, 2009
Oh and is there offical MS links yet for the pricing if its offical and offical uk pricing?
mikegalos@msn.com
on Jun 25, 2009
Since kent and lotsa seem unable or unwilling to justify their silly claim that Windows 7 is no more significant an upgrade than OS X 10.5 to 10.6, I'll make it easy for them. Paul's already listed the major update changes both on the WinSupersite Windows 7 section and in his new book. By comparison, here's the list of user level features being added or improved in OS X 10.6 that kent and lotsa claim is the equivalent to what Windows 7 adds to Windows Vista: * Updated QuickTime * Support for Microsoft Exchange Server * Added an additional view in Expose and Stacks * New Chinese character set input method * Higher resolution support in iChat with new codec * Improved Services menu * Automatic printer driver update * Automatic time zone setup * Improved text selection in PDF files * Upgraded preinstalled copy of Safari to version 4 * Blocked disk eject now identifies the blocking app * Wake on LAN support * Dropped support for PowerPC based computers Maybe they honestly think these really do make a compelling and major upgrade. But I'd love to see their thinking to justify that.
DRWAM
on Jun 25, 2009
Notice how the price of Snow Leopard was decidedly low during Jobs leave. When he found out, it probably put him in liver failure!
DRWAM
on Jun 25, 2009
One could argue that Exchange server support could pay for the upgrade, but there's really only a handful a customers that actually use Exchange on a Mac, compared to the user base.
mikegalos@msn.com
on Jun 25, 2009
DRWAM I agree that support for Exchange is a big feature for the few Mac users on corporate networks. As for Jobs, your theory does make sense in terms of explaining how he went from having a cold to needing to replace a major organ.
tayme
on Jun 25, 2009
"As for Jobs, your theory does make sense in terms of explaining how he went from having a cold to needing to replace a major organ." Really, it was originally pubicized as him having a cold? I must have missed that. But really...in the case of the pricing of W7, mikegalos is mostly right. I still stand by my opinion that Microsoft would have been dumb to let Apple dictate the price. One has to keep in mind, that Windows is installable on an almost infinite number of configurations of hardware, including those made by Apple(the Intel variants, anyway). OS X SL is limited, legally, only to Intel models of Macintosh computers, and the price of those negates the price difference of the OS. People should just buy what they want and quit worrying about what others are buying. If you don't like what the other OS offers, don't use it...but quit assuming that one side is better than the other...it is petty and simple minded. --tayme
notawindowsuser
on Jun 25, 2009
@Mike "But, hey, prove me wrong. Tell us all those major user level features that make going from 10.5 to 10.6 a compelling upgrade that's equivalent to all the features Paul lists for Windows 7." Speed, Snow Leopard is fast, old hardware feeling like new hardware fast.
realtestman
on Jun 25, 2009
The funny thing is that all the people who complain about the pricing are the sort of people who will complain about anything and are in the very very small minority. Considering the price is virtually the same as Vista (and in some cases cheaper), it'll probably sell more than Vista did in the same timeframe, which will be more than what XP sold in the same timeframe. So Microsoft will make even more money, people will STILL use Windows in their overwhelming droves and their prices will be completely justified as a result. And at the end of the day, no one will care about the people who have whined about the price because they want a free ride.
kent909
on Jun 25, 2009
mikegalos@msn.com said: kent909, I did notice you didn't actually bother to list any of those compelling user level features in your reply and, instead, just huffed about how I didn't know what I was talking about. Feel free to take up the challenge I offered to lotsa and tell us all those user level features that were added with the upgrade to 10.6 that make it an equivalent upgrade comparable to what Paul lists in his Windows 7 features pages. Mike: Why do you even care what has or has not been added to SL or how much it will cost to upgrade. You are a Windows guy and you are not going to use SL even if it was free. So if you would like to talk about how fortunate you are because MS is giving you everything you could ever want in Win 7, then fo for it.
Dipsh t Admin
on Jun 25, 2009
"Speed, Windows 7 is fast, old hardware feeling like new hardware fast." I fixed it for you. Of course, the comparison is not entirely fair. Since Snow Leopard removed PowerPC compatibility, the overall breadth of processor choices is much smaller and recent. To make the claim that SL works on old hardware, we only need to go back a few years when they switched to Intel.
rr0de74@live.com
on Jun 25, 2009
@master, you need to step back before you have an aneurism. I wont or don't care to argue wether 7 is a major or minor upgrade, or wether SL is a major or minor. The spin here will depend on your bias, and my bias is for neither, or I guess I just don't care that much. I am simply saying, that the average consumer will probably see what chuck is stating. On one side you have Apple with a $29 upgrade for its single OS choice. On the other side you have Microsoft with much higher upgrade prices, depending upon which version you have or want to go to etc. The price and complexity are glaring for the average consumer. The technical details are ignored by the average consumer. Unless they are stated something like "starts up in only x seconds, shuts down in only x seconds" or "8 hours of battery life" Anything more technical and you start to loose them quickly.
JoshW
on Jun 25, 2009
Mabye we are underesitmating consumers
rr0de74@live.com
on Jun 25, 2009
"Considering the price is virtually the same as Vista (and in some cases cheaper), it'll probably sell more than Vista did in the same timeframe, which will be more than what XP sold in the same timeframe." I agree. If it does not, then Microsoft is in trouble. Windows 7 sales have a built in boost, or they should. XP is old as dirt now and people want off of it. Vista has a horrible stigma with it and people want off of it, if they ever went there. 7 should have record sales. The angst that has built up to get to something better is felt by almost all Windows users and should work in Microsoft's favor. Had 7 shipped 3 years after XP then it would probably be a much different story.
Saucy
on Jun 25, 2009
@ ChipWinter It will cost approx. $50 per machine to make the move if you take advantage of the early retail discount. You will have to download the ISO and burn it to disc. Microsoft will somehow provide you with the Product Keys. Print them out. You will be able to choose between 32 and 64 bit, but unless you are running machines 64-bit capable *and* with more than 2GB RAM each, stick with the 32-bit version. As well, Win7 will go on "clean" and then you use Windows Transfer to bring over the files from the old installation to the new. This means you will have to reinstall your apps. It's a lot of work doing five machines - you will have to have an Install Day - maybe some Saturday. That said: line-up hardware drivers beforehand and burn them to disc (Windows Vista drivers should work if no Windows 7 are available on the manufacturers' websites), make sure you have the various CDs for your apps available and their product keys, make sure to have any 'numbers' ready for things like your ISP and email accounts, and have paper and pencil handy. 'Should be fun - have lots of coffee brewed.
Avro
on Jun 25, 2009
No family pack. Don't Windows Users have kids and multiple computers? Microsoft, this is 2009.
subzerohitman721
on Jun 25, 2009
Wow. Microsoft really blew a huge opportunity here. I am very disappointed. I was really hoping that Microsoft would match what Apple was doing. But here they go again, trotting out an expensive version of Windows 7. All I can say is that I'm extremely disappointed. Looks like I'll be holding off on a Windows 7 for awhile. If the prices were reasonable, I would have gone out and bought a full version. This is pretty close to the standard pricing by Microsoft and no consideration that 9.4 % of the American workforce is now unemployed. Thats millions of folks who definitely cannot upgrade, and millions more struggling. It's really too bad, because Windows 7 would be worth that price in a normal economic situation. If folks were working and everything wasn't so expensive, then I could see that. But in 2009, this pricing absolutely sucks. Microsoft has really hurt the buzz on Windows 7 for many who wanted this OS. Very truely disappointing.
Saucy
on Jun 25, 2009
Microsoft doesn't offer "family packs" - it offers "service packs" for free / no charge.
Avro
on Jun 25, 2009
@ subzerohitman I would have to agree. Microsoft's problem is that they pretend that OS X and Ubuntu don't exist. Mate, you have competitors. No one expects Microsoft to match Linux pricing, but Apple's - Yes.
Avro
on Jun 25, 2009
@ Saucy - a family pack is a multiuser pack, not a bug fix.
subzerohitman721
on Jun 25, 2009
Avro, Completely agree with you. You cannot pretend they don't exisit. If anything, I feel that Microsoft just tossed both Ubuntu and SnowLeopard a "huge freaking bone" here. This was really bad in terms of PR. Once I make an adjustment to my PC, I will have to check out the current version of Ubuntu.
gorath
on Jun 25, 2009
BBC website mentioned that there will be something akin to a "family pack"
Avro
on Jun 25, 2009
@ Gorath Why doesn't Microsoft mention it?
shark47
on Jun 25, 2009
"This is pretty close to the standard pricing by Microsoft and no consideration that 9.4 % of the American workforce is now unemployed. Thats millions of folks who definitely cannot upgrade, and millions more struggling." I doubt they even care about Windows 7. They're not standing in the unemployment line waiting for a copy of Windows 7. For the few people that do want to upgrade, they can do so before July 11. For everyone else, they will get Windows 7 when they buy their next PC. This is all starting to get silly now. Why Apple? Why not follow Canonical and make Windows free? That would definitely make people happy. Yes, it would send about 20,000 people to the unemployment line, but who cares? After all the economy is so bad. Then again, why only Microsoft? Why doesn't Sony give me my next TV for free?
DRWAM
on Jun 25, 2009
Shark has a point. Also, only people that own a Mac already will be enticed to upgrade for only $29, but it will not increase the sales of the hardware, which is still more expensive, especially the laptops. I will agree that the iMac is at least close in price, but MBP has a 50 - 100% difference, just in base models. Therefore, the cost of an upgrade to Win 7 may not make much of a difference in sales.
Silverstreak
on Jun 25, 2009
Has anyone seen any announcements regarding any early discounts for Ultimate full or upgrade?
Avro
on Jun 25, 2009
@DRWAM don't forget that most Mac buyers get education discounts and throw in an iPod Touch and cheap 3 year AppleCare and the price looks very competitive indeed.
chuckb84
on Jun 25, 2009
For anyone eligible don't forget the Employee Home Use deals. I think we'll get Win 7 for about $20, and even I will buy it at that price :)
robertsjoe
on Jun 25, 2009
The Microsoft tax at work. This is a rip-off for such a minor upgrade. At least Apple treat the customers with intelligence and only charge $29 for a minor upgrade.
sohaniabhishek
on Jun 25, 2009
MS is taking care of those who are buying new computers. new buyers will be getting windows 7 when it releases! the prices are a little on higher side for upgrades.. but this is business. MS has more compulsions than apple.. biggest competition for windows 7 is not apple or ubuntu.. its windows xp or windows vista... apple has no such situation.. MS cant make upgrade too cheap, in which case DELL, HP and other computer manufacturers will find it tough to get people to buy a new hardware...with windows 7 on it..! windows and office is bread and butter for MS (like adSense for google; hardware for apple) you cant expect them to do a charity on that..!

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