Why Windows 7 Costs so Much
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I’ve had a couple days now with Windows 7 and it is certainly an improvement over both Vista and XP, requiring slightly less resources than either (significantly less than Vista), booting faster, and offering superior usability. Yeah, but why does it cost so much? I know why.
For a stark contrast, compare Windows 7 with OS X 10.6 Snow Leopard, its would-be competitor. I won’t get into the argument over which OS sees the other as competition, maybe they both do. In the marketplace, however, the upgrade version of Snow Leopard costs $49.95 $29.95 ($99.95 $49.95 for a five-machine family pack) while there are twenty different versions of Windows 7 to choose from with the most popular (Windows 7 Home Premium) priced at $119.95.
Is Windows 7 really worth $70 $90 more than Snow Leopard?
(Obvious pricing brain fart above — Bob)
The better question to ask is why Microsoft decided to set the price point where they did? And the answer to that one is quite simple: Microsoft doesn’t actually want you to upgrade to Windows 7 at all.
Microsoft wants you to buy a new Windows 7 PC instead.
Setting the price at $119.95 is a brilliant move on Microsoft’s part. The company doesn’t want users to upgrade so by setting the price high Microsoft is essentially imposing a Windows 7 upgrade tax on users. Buy a new Windows 7 PC from Staples and the software price drops to $49.95, the same as Snow Leopard.
Microsoft likes to make money, hence the Windows 7 tax, but their main reason for setting the price so high is to get us all to buy new computers. That brings Microsoft less revenue per unit but more revenue overall as businesses, for example, decide to upgrade a whole office with new PC’s rather than pay $119.95 per desk just for new software. New PCs come with dramatically lower support costs for Microsoft than do retail upgrades. The pricing ploy makes Microsoft very popular, too with its Original Equipment Manufacturers (OEMs) like HP, Dell, and hundreds of others.
Here’s another piece of evidence aiming in the same direction: have you actually done a Windows 7 upgrade? Mine took seven hours! It shouldn’t have to take that long unless part of the goal was simply to discourage upgrading. Snow Leopard took me 20 minutes to upgrade, but then Apple has no OEMs to please (this is key) and makes lots of money on upgrades even at $49.95.
When Windows 95 was introduced (I was there, shooting Triumph of the Nerds), part of the Bill Gates and Jay Leno performance that day was upgrading a 486/66 machine from Windows 3.1 to Win95. It took about half an hour. With more modern processors, memory, disk drives, and a new OS touted as being lean and mean, why should Windows 7 take significantly longer than that to upgrade?
It shouldn’t, unless speed-of-upgrading wasn’t on the feature list to begin with.
In this case, Bob is a little bit too intent to ascribe design to Microsoft behavior when there is none. Microsoft is perfectly fine with people upgrading. In fact, Microsoft is currently selling a Windows 7 Family Pack that allows you to upgrade up to 3 PCs for $149.95. The reason why Microsoft isn’t as aggressive in pushing upgrades as Bob thinks they should be is that Microsoft doesn’t think that they need to be that aggressive at this point. They think that they can charge this much and still get a sufficient number of users to switch from XP. Bob might think that they’re mistaken (as I do), but that’s the extent of their calculation.
Good luck finding the Family upgrade package. I checked 4 Best Buys and 3 Frys with no luck. Then I tried Amazon, no luck there either. Amazon shows the Family Pack as not likely to be available any time soon, or words to that effect. Surprise, I was able to order it from Microsoft. Mark me as agreeing with Bob. MS makes their money on OEM copies of Win7, not upgrades, esp. for businesses.
I found Costco was carrying the family pack upgrade. I think I paid either $119 or $129 for it…
Another reason…..I keep saying on all the web sites…. Microsoft is a software company, that’s where they make their money. Apple is a hardware company. That’s where they make their money. Apple pretty much gives away their OS and other software to sell their hardware. Simple isn’t it……duh….
Bob, what nonsense. Msft doesn’t give a damn about PC sales at other companies. The poor logic of their pricing is simply arrogance and incompetence. Does anything else about their marketing make sense? Then why would pricing?
He’s at least part right.
Apple has no OEMs, so there’s no OEM pricing. Microsoft has OEMs, and the OEM price has to (logically) be lower than the price that they sell for at retail. Therefore the retail price is higher than the desired OEM price by some calculated amount.
Windows XP shipped in Fall 2001. Since then they’ve shipped Vista and 7. Other releases have not been to retail, except as patched-up interim releases that no one is expected to buy because you can get the service packs by downloading them or ordering CDs for the price of shipping.
In Fall 2001, Apple shipped systems with OSX 10.1, which was a service pack (in the Microsoft sense, no fee). Since then, they’ve released five more versions at retail, charging some amount every trip through the turnstile, and marking up their systems by 50%+ for the proprietary boot block all the while.
I don’t know which approach is better, but I do know which one seems to leave happier mocha-sipping fat pigeons in black turtlenecks. I suspect that some things, it doesn’t matter what you charge for them.
I love a good market showdown.
Apple took the hardware path, Microsoft the Software/OS path and Microsoft won BIG. Bill Gates became the richest man in the world for a time. He’s still doing pretty good.
Apple then resurrected themselves with colorful, marketable, classy HW and then OSX. Then Apple pulled off the iPod, iPhone, coup that makes the Microsoft execs sooooo pissed.
Still, in the PC market, Apple is gaining market share (thanks in large part to Vista) but Windows 7 looks good. I’ve run it and my recommendation is to stick with XP if you have it, go ahead with W7 if you buy a new machine. Upgrading is pointless for the average business user. Corporate IT staffs need to review whether or not W7 will run their current business apps, but a change from hundreds of XP PCs to Apple is massively more complicated than easing in W7 with new purchases.
I have customers who use PowerBooks and L-O-V-E them. When they need to run a corporate app, they fire up a Fusion machine and run XP. Some of these people have iMacs at home with those gorgeous 20+ inch dispays and they L-O-V-E them. They almost never get infections of any kind, I believe because the bad guys see Windows huge market share and figure the ROI is much higher targeting billion plus Windows machines in the world.
I have customers with XP that have been using the same machine for 4 or 5 years and don’t complain – the machines just work. I teach them certain behavioral techniques and they almost never get virus/adware/malware/spyware infections. The ones that do, I have them run one or two *free* programs and it cleans them up.
The thing to watch is what shift takes place in the market-share war for OSs. If Windows 7 causes the recent gains by Mac OS X to abate, the Microsoft has a winner. If Apple continues to gain market share, then sell your MS stock and buy Apple. Buy Apple anyway, the iPhone/iPod (and soon the Apple NetBook/Reader/whatever it will be) will be winners for a long time to come.
PS – if Apple were not selling OS X for what they are selling it for, does anybody really think that you could buy a new copy of Windows 7 OEM for anything less than $200, or $300? Thank God for free markets and competition.
There we go again:
Quote:
[Windows] almost never get infections of any kind, I believe because the bad guys see Windows huge market share and figure the ROI is much higher targeting billion plus Windows machines in the world.
Burglars are lazy by definition. They break into the houses that are easiest to break in – first. Then they go after the hard ones. It is the ease that is the main factor, not the quantity…
[...] I, Cringely: “Setting the price at $119.95 is a brilliant move on Microsoft’s part. The company doesn’t want users to upgrade so by setting the price high Microsoft is essentially imposing a Windows 7 upgrade tax on users. Buy a new Windows 7 PC from Staples and the software price drops to $49.95, the same as Snow Leopard. …Microsoft likes to make money, hence the Windows 7 tax, but their main reason for setting the price so high is to get us all to buy new computers. That brings Microsoft less revenue per unit but more revenue overall as businesses, for example, decide to upgrade a whole office with new PC’s rather than pay $119.95 per desk just for new software. New PCs come with dramatically lower support costs for Microsoft than do retail upgrades. The pricing ploy makes Microsoft very popular, too with its Original Equipment Manufacturers (OEMs) like HP, Dell, and hundreds of others.” [...]
the best way to upgrade is to install fresh.
1. backup your data (you already do this, yes? )
2. format the drive.
3. install from the upgrade disk, it will ask to “see” the older install disk to prove you are doing an upgrade. the install should take about 15-20 minutes.
4. restore your data from backup.
all up this can be done in about 2 hours.
installing over the top is always a bad idea, you have crud left behind.
a fresh install once a year is a good thing, keeps you system runnning at its best.
This doesn’t work with Vista or 7. To upgrade, the installer must be run from a qualifying version of Windows. My favorite way to do this is install it without a license key (trial mode) and once it boots, before loading drivers or anything, run the setup and input your key this time. That being said, I have had excellent luck getting 7 to upgrade Vista installations in place. It’s generally worth a shot.
the fanbois are out in force on this one.
I think it is by design. It seems that a certain company has a knack for timing the popular phase of new media streams. Their boyz think it is elite, but that has already passed.
newflash, os/hardware architectures are specialized nowadays.
@Derek: You are wrong. Windows hasn’t asked for a previous disk since XP.
There is a technical workaround to make the install you are suggesting work, however MSFT calls it a hack.
You should do a custom install. It will move all of your old data/programs to windows.old which can safely be deleted or merged back into your new version if you want.
@Bob: how many Gb of pictures, game data, documents and iTunes settings did you have in win3.11? That’s why it doesn’t take long.
@Bob
There are so many facts wrong here.
Firstly, you commented on upgrading a 486 – 66mhz machine from 3.1 to windows 95. This mostly takes its toll on the HDD. HDD’s have not changed hugely in speed since, though they have gotten bigger. With more data things take longer.
Secondly, you say that OSX is much cheaper to upgrade. I view this in a different light. Windows upgrades are generally bigger and more feature packed than OSX. Also with windows your not paying for specific hardware. As some one said above, you really pay for the hardware more than the software with apple.
All and all, i think your comments were a bit uninformed and short sighted.
Actually, HDDs HAVE changed a lot in the last couple years. On 486 computers the typical disk-to-buffer transfer rate was around 70 mb per second. Now SATA HDDs can achieve up to 300mb per second. http://en.wikipedia.org/wiki/Hard_disk_drive
I agree that Windows installations are bigger, but your assertion that they are more “feature packed” is strictly perception. Many of the packed in features will never be used by a standard user anyway.
Although I don’t necessarily agree with the logic behind this article, I do agree that the upgrade price is too high in the US during a deep recession. It will deter people from buying it, and many of us are tired of subsidizing the lower prices offered throughout the world. Because Microsoft has held an overwhelming monopoly on the operating system market for decades, they will charge higher prices because they belive that their option is the only option available to the customer’s who are currently using a Windows system. Now we are seeing linux finally reach a level of maturity where companies and individuals consider it a viable alternative and Apple is no longer a niche for the elite. This is a perfect storm to start chipping away at the market share leader, Microsoft. Let’s face it, the ipod and iphone have changed the way people look at Aplle, and that is not going to change. A better interface has changed the the fear of changing over to a Linux based system into a curiosity. If the upgrade process is painful or expensive, these other options become even more viable.
I have always held to the opinion that overly high prices for software and digital media of various types is the main force driving piracy. If you offer a good product at an affordable price, people will buy it. Otherwise, someone will offer a way to provide the software to the public in an illegal way.
I think it is true, I know many people who never buy a new OS because they think it is too expensive, rather they put off a hardware upgrade in wait of a new OS bundle, I myself did the same sort of thing in between computers thinking wether I should go with Vista (which I didn’t) or stay with Mac.
You’re ignoring “volume” license discounts – which pretty much every company would get (I put “volume” in quotes, because you onlyneed 5 licenses of any MS product to qualify).
Based on previous releases, I’d expect anywhere from 10 to 50%+ off retail, depending on volume. Further discounts for non-profits, educational, government, etc.
There’s the $29.99 Win7 for students deal, free copies at Launch Events, free copies to beta testers, and free copies to OEM purchasers of Vista since June. These will all be used in “upgrade” scenarios (if not strict upgrades).
The reason new PCs have lower support costs is mainly because OEMs are required to support OEM copies – not MS. This has been the policy since at least Win98.
So, no, I don’t think MS is punishing upgraders – $120 is probably a fair deal to home users. Apple just charges for each incremental upgrade, which means it’s $40 * 4 instead.
“…have you actually done a Windows 7 upgrade?”
Well, yes. First upgrade: The key was that, as an upgrade from WinXP to Win7, it was not an “in place upgrade’ but a “fresh install upgrade”. Fresh installs are preferable for a lot of reasons, IMO, but the speed of upgrade was key. Oh, I guess if I counted the time it took to run Windows Easy Transfer and save all the computer’s data and settings to an external drive, it would run the time up, but WET just trundled along while I was away doing other things the day before I performed the “upgrade”, so I really didn’t even time that portion of the upgrade process.
The upgrade _counting_ the restoration of data and settings and reinstallation of software took about two hours, with reinstalling the software taking up the majority of that time.
Big deal.
Folks who do an in place upgrade (inheriting all the problems and glurge of the previous installation) get what they deserve, IMO. A fresh installation with data migration is elegant, clean, and in the first case I attempted it with Win7, completely trouble free. Which is why I have continued to use that process on later computers.
Windows Easy Transfer has finally set to rest the bad old days of files and settings transfer from one computer to another or for a fresh install “upgrade” IMO. Of course, the fresh (called “Custom” by the Win7 installer) install _also_ creates a win.old folder with the entirety of the old installation backed up, but it is (has been so far) unnecessary and easily nuked when nothing critical emerges after a couple of weeks.
Fresh install “upgrades”: recommended.
Isn’t it about time for a new nerds style, or is there, from where the last one left off.
I hate that restore partition bs. A genuine copy of the OS is much preferred for fixing and reinstalling like YOU want. Maybe that’s why i use Linux.
It costs so much because it acutally is half decent!
I have this theory that every second version of windows is ALWAYS rubbish, going back to almost the start of windows.
Windows 3.0 is the first I remember, and it wasn’t very special – didn’t make me want to leave DOS land.
Then Windows 3.1 came out – it was way more stable, better features, basically a whole new version.
Windows 3.11 – a minor release that was a waste of time. Back in those days there wasn’t service packs, so they had to release a whole new version!
Windows 95 – Awesome – changed computing – few would disagree.
Windows 98 (the origional one) – Rubbish. Unstable as all hell. A downgrade from 98.
Windows 98 SE – More than a service pack a whole new addition – windows 98 with the stability module installed!
Windows ME – oops someone took out the stablity module. Rubbish.
Windows XP – Awesome OS right from the start. Lots of service packs, not going to count them as seperate as they are dime a dozen now.
Windows Vista – Rubbish again (see the trend)
So – Windows 7 MUST be good – it’s due for it!
I got my version for $99
Windows 7 took less than an hour to install clean, while Leopard & Snow Leopard each took well over an hour to install clean in succession. Granted, the Windows box is a MUCH more powerful computer, but still, it was painful to install OS X. Windows 7 RC was so good that I went from ‘swore to always buy Macs in the future’ to, ok Windows wins this round & I’ll buy Windows 7 & build a PC instead of getting an iMac.
Liar, liar, pants on fire! Having upgraded about 150 desktop Macs to Leopard myself, they all took about 30-45 minutes and left everything intact for the users. Only the laptops took longer – about an hour while I was at lunch, but then the drives are only 5400 RPM. The Mac OS never stops and asks for user input midstream once it’s underway like Windows XP did.
The few Snow Leopard upgrades I’ve done took about the same. I don’t know what you can possibly doing wrong so I’d have to say your “experience” must be a fabrication. Both the XP and Leopard fresh installs required several rounds of updates before you could use the machine. The Mac was ready to use way sooner than the Windows boxes. Part of the problem is XP was long in the tooth and needed many more updates than Windows 7 or Snow Leopard – which have relatively few updates… so far.
Windows 7 installs easily as a clean install. You’re right about that. Very nice as well once it’s working. Reminds me a little too much of OS X but is still vague, rigid, needy, arbitrary and abstract in many ways.
Doing a Windows 7 upgrade on an existing system and expecting it to work is much more difficult. Having done two of those upgrades, which is all I can stand, I strongly agree with Robert about his general time frame. Maybe it’s familiarity, but I don’t think it is.
I showed my pure Windows guy how to upgrade Macs to help me and he was blown away by the simplicity and ease of installations. So much that he bought his own Mac having never even touched one before. Nothing painful about it and he found the “conventional wisdom” about Macs amongst PC users was horribly outdated.
And, puleeez, saying the Windows machine is a MUCH more powerful computer hasn’t been true for quite some time. Next up, “there’s no software for the Mac”… everyone chuckles about that now. I now run Windows in emulation on my Macs and they’re faster than a similarly outfitted native PC. I don’t know why but the 8-core 3.2 GHz Xeon Mac Pro running Windows under Parallels regularly smokes the 8-core 3.16 GHz Xeon PC in renders and compressions by about 30%.
Basically, there’s no real reason to buy plain PCs now except initial cost or limited functionality (meaning a task specific installation or no-frills consumer browsing). If your time is worth nothing or you like fixing things for a hobby, PCs are cheaper if you buy the junkyard class systems. If you just want something that works right, use a Mac. If you want to play games, get an Xbox or Playstation.
There has not been a virus attach lately. Is antivirus firewall severity overrated?
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Windows 7 really does cost too much…I was really shocked when I saw the price tag. Hopefully it will come down in time.
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Windows Vista is good but it can hog your CPU and Memory.;~`
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, pero te felicito porque la manera en que escribiste me fascino. Por primera vez he encontrado contenido digno en la red. Un saludo.
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Hi,
I’m running a 90 day trial of Win 7 Enterprise Edition. Too bad they don’t sell this version retail as it is very stable and much smoother than XP. I know the Ultimate is similar in features, but it’s unaffordable. I’ll stick with XP and/or Super OS Linux. I’d pay for Enterprise if it were $49. My laptop came with Vista, which would not run given it only came with one gig of ram. Windows 7 runs as fast as XP. Too bad I can’t trade my VISTA license for Win7, as I only used VISTA for two weeks before switching to XP Pro. VISTA was a big ripoff.
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I purchased an Apple and have both snow Leopard and Windows 7 using bootcamp. I purchased Snow Leopard for $22.95 and Windows for $ 12.95 after taking a computer class for work. At work I use a PC using XP. I am a power XP od MS Office user. I have an Apple because after 1 year, I purchased and returned 3 separate PCs because the OS was way worse than XP and MS marketing would not allow any other OS on strong PCs. The MacBook Pro just works and allowed be to use XP and all my old software.
That said, as a power user, I see no advantage in going from XP to Windows unless you are into filing better and frequenly have anxiety search for files. It has a better interface in playing MP4, but it’s really just a version of Vista that runs without crashing. There is no improved effeciency with or easier way to do anything. Explorer still sucks and crashes just as often.
If you are an Apple User, and a Power User with word and Excel, regardless of what any Apple user says, they are lying if they say the e-mail software, iCalc, Address Book or Open office for OSX is worth 2 cents can compare. Open Office is pretty equivalent to MS office 2003 with some minor defeciencies in excel. But Open Office Text is great and comparable to word…Maybe better.
Office 2007 was a joke and anyone who upgraded waited their money because there are no additional features in it and just a more confusing ribbon that power users hate. Many companies who rolled out office 2007 decided to go back to OIffice 2003.
At home I have office 2010, there is no upgrade from the useless 2007 to 2010. The reason why MS has their pricing policy is for one reason. To take as much money from the customer base as possible.
Vista customers who were screwed over hard during the first two years are abused again. Those people really suffered. If they bought 2007 and discovered they got nothing for their money, too bad..
The only reason why MS came out with Office 2010 is because they are scared of Open Office who is 6 months aways from making their office solution better than the Office 2003 Suite. A Ribbon would force them to spend more more on adjusting and copying rather than developing a better office package. Also on the Mac side there is additional competition coming from Apples office suite competitor and other chat software.
Apple has not really put enough time into development of an office or e-mail package or halfway decent calender. Without it, Apple will really never penetrate the corporate market. If Apple were ever able to overcome these issues, MS would be finished. Apple is too cheap to try hard enough and keeps making the same mistakes.
[...] 原文地址：http://www.cringely.com/2009/10/why-windows-7-costs-so-much/ [...]
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