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Dell Thinks Windows 7 Pricing May Be a Problem

By - Source: Tom's Hardware US | B 49 comments

The director of product management for Dell's business client product group, Darrel Ward, thinks that the price for the upcoming Windows 7 operating system may potentially be an obstacle for early adopters.

While every other aspect of the operating system supposedly beats Windows Vista hands down, the licensing tiers may be its downfall initially, especially during current economic conditions. However, Ward hinted that the licensing tiers for Windows 7 are more expensive than its predecessors (Vista, XP). In fact, Ward made it clear that Windows 7 Professional, which will replace Windows Vista Business, is expected to be more expensive. Unfortunately, Ward did not go into specific detail about actual price points.

"If there's one thing that may influence adoption, make things slower or cause customers to pause, it's that generally the ASPs (average selling price) of the operating systems are higher than they were for Vista and XP," Ward told CNET in a phone interview.

Ward also stressed that government agencies,  small businesses-- even some schools--may not upgrade to Windows 7 initially, unable to afford the pricier operating system. Ultimately, despite the cost, everyone will eventually move up to Windows 7, especially those Dell clients--more than half according to Ward--who are still using Windows XP and loving every minute of it. Ward said that the process of offering and preparing for a new operating system is a little different now: a large number of customers actually want the upgrade, and are waiting patiently for Windows 7 to appear later this year. With that said, Dell is gathering its resources together to offer its service organization, and even offer support for the operating system's XP mode.

"It's one of the things that Microsoft is doing that we think is helpful. Putting an instance of XP virtual machine in the higher end SKUs (models). This is another alternative for compatibility. We'll fully support that in our product and consulting services," he said.

Ward also confirmed that Windows 7 "driver readiness" was good, "pretty healthy" as he states, however he showed some concern that a few things haven't been worked out, referring to the AMT VPRO WHQL drivers, saying that they're "a little behind." However, he feels rather positive about Windows 7 and its current state of "readiness," admitting that it's much further along than Windows Vista was at this point.

Still, even though Dell is gearing up for Windows 7, and its customers are gearing up as well, the new, pricier operating system may leave the gates off to a slow start. "In tough economic times, I think it's naive to believe that you can increase your prices on average and then still see a stronger swell than if you held prices flat or even lowered them," Ward said.

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  • 16 Hide
    hellwig , May 18, 2009 7:16 PM
    Three things at play here:

    1) Windows 7 RC is so popular, Microsoft thinks they earn a little extra cash by increasing the price over Vista.

    2) Microsoft STILL wants people to use Vista, and Microsoft will probably still allow Vista to be sold on computers even after 7 is released. Their thinking is get people to upgrade to a less expensive Vista, and they'll eventually have to upgrade to 7 anyway, meaning a second sale later down the road.

    3) Early Adopters ALWAYS get the shaft. You buy when a product first comes out, and you WILL PAY MORE! That's just capitalism for you. If no one else has it, you pay more to get it. Price will go down once everyone has it or no one wants it.
  • 10 Hide
    Myrdek , May 18, 2009 8:02 PM
    Considering that Windows 7 required much less work than Vista because it's the same core, it's obvious that the monopoly that is microsoft is trying to milk the customer with it. No way I'm going to support them and buy it and I think a lot of people are going to feel the same way

    Get ready for the most pirated version of Windows ever made
Other Comments
  • 8 Hide
    dman3k , May 18, 2009 7:08 PM
    Prices first, guys...
  • 3 Hide
    pbrigido , May 18, 2009 7:11 PM
    Pricing is always a "problem"...regardless of the industry. Homes, cars, tech, food, insurance, etc. Personally, I can't wait for Windows 7.
  • 16 Hide
    hellwig , May 18, 2009 7:16 PM
    Three things at play here:

    1) Windows 7 RC is so popular, Microsoft thinks they earn a little extra cash by increasing the price over Vista.

    2) Microsoft STILL wants people to use Vista, and Microsoft will probably still allow Vista to be sold on computers even after 7 is released. Their thinking is get people to upgrade to a less expensive Vista, and they'll eventually have to upgrade to 7 anyway, meaning a second sale later down the road.

    3) Early Adopters ALWAYS get the shaft. You buy when a product first comes out, and you WILL PAY MORE! That's just capitalism for you. If no one else has it, you pay more to get it. Price will go down once everyone has it or no one wants it.
  • 8 Hide
    aevm , May 18, 2009 7:19 PM
    I wish they'd tell us the prices and release date already.
  • 1 Hide
    ravewulf , May 18, 2009 7:20 PM
    I'll wait until Microsoft actually releases the pricing model to the public. It's not like we don't have the Win7 RC usable for a bit less than a year anyway.

    Still excited for it though!
  • 8 Hide
    cadder , May 18, 2009 7:23 PM
    Microsoft's philosophy has always been to price their intellectual property very high- all that the market will bear and then some. They have no serious competition so there is no pressure to lower the prices. As an example they always priced their programming languages very high until people like Borland started selling good products at much lower prices.

    I'm doing just fine right now with my Vista and XP, so if 7 is seriously expensive I won't be upgrading to it. Of course the next time I buy or build a new machine it would most likely go 7.
  • -9 Hide
    jsloan , May 18, 2009 7:25 PM
    nutz! after the nightmare that is windows vista they should be giving it away and sincerely apologizing to their customers before we all become mac owners...
  • 3 Hide
    Anonymous , May 18, 2009 7:30 PM
    jsloannutz! after the nightmare that is windows vista they should be giving it away and sincerely apologizing to their customers before we all become mac owners...


    LOL! He said "Mac".

    When's the next meeting of Empty Threats Anonymous?
  • 1 Hide
    IzzyCraft , May 18, 2009 7:41 PM
    Dell thinks the prices which are listed...are too high. Good old paraphrasing; what is the price model.
  • 2 Hide
    Chuck Norris , May 18, 2009 7:51 PM
    It makes sense that Windows7 would cost more than Vista. After all, Microsoft actually WORKED on Win7..

    But it is also true that you should not buy Win7 right after it is released, especially for a business. Let's not forget how those foolish iPhone early-adopters were treated by Apple.. (Less than a year from its release, Apple releases another version at half the price.) Microsoft might be setting the price high to try and get the maximum they can out of Win7; if they sell them at a price of say $250 and not too many people buy them, then they drop the price down to say $220 and then $180 and then they get most of the people who wanted Win7, and they get more money than if they had started selling it at $150.
  • 10 Hide
    Myrdek , May 18, 2009 8:02 PM
    Considering that Windows 7 required much less work than Vista because it's the same core, it's obvious that the monopoly that is microsoft is trying to milk the customer with it. No way I'm going to support them and buy it and I think a lot of people are going to feel the same way

    Get ready for the most pirated version of Windows ever made
  • 4 Hide
    bill gates is your daddy , May 18, 2009 8:08 PM
    Arrgh Mateys! I be not seeing a problem with pricing of thar Windows booty. It be not bothersome to me. ol' Swashbucklin' Bill can keep his hands off me doubloons.
  • -9 Hide
    antilycus , May 18, 2009 8:19 PM
    um, THE MAJORITY OF BUSINESS WILL NOT UPGRADE OR PLAN TO UPGRADE UNTIL SP1 IS OUT. Hell Windows 2000 is almost used as much as Windows XP in business still. TRUST ME, I know better then you.
  • 9 Hide
    crisisavatar , May 18, 2009 8:26 PM
    I knew there was no way Microsoft wouldn't screw this one up.
  • 2 Hide
    sublifer , May 18, 2009 8:34 PM
    Well, I guess this news pretty much ends it for me. I'll keep gaming on my XP box until I replace it and I'll go to Linux on everything else. I've gotten sick of Vista on my media center PC (I've had bad experiences with XP MCE) and was looking forward to Win7 but if they're going to price gouging with it then screw them. I'll try LinuxMCE or MythTV. I loves free but I'd be willing to pay $50 for a good OS... wish Win7 Premium came in at that price....
  • 1 Hide
    maximiza , May 18, 2009 8:38 PM
    XP FOREVER!!!!!!!!!!
  • -2 Hide
    hemelskonijn , May 18, 2009 8:55 PM
    An operating system should not cost more then about 100usd in my humble opinion.
    A price like that would most likely be a good weapon against piracy and more important people might actually be able to afford it.
    I think it would be great if they ripped out any "features" like the eye-candy thing and paint and drop in the much more commonly used stuff that are in pro versions only ever since 2k and XP.

    Sell the useless crap as a compilation and ask another 100usd i bet there are enough people willing to pay for the crap and it gives power users (or people like me who like to game and stuff at their pc but dont like their pc to be a carnival loaded with crap) a chance to only buy the part they want.

    No one needs eye-candy or painr jet we all have to pay for it.
  • 0 Hide
    hemelskonijn , May 18, 2009 8:56 PM
    PS: i forgot microsoft kind of already walked that road with there + packs for windows 95 98 98SE and ME.
  • 1 Hide
    norbs , May 18, 2009 9:05 PM
    LOL first they make a flaky product called Vista that lasted a mere 3 years from it's release date? Now not very much later they make a product that should of been Vista originally and price it more. so sad... cut people an effin' break. this should be almost free to current vista users.
  • 2 Hide
    Anonymous , May 18, 2009 9:09 PM
    My company in the UK (a major water company) still uses win 2000 pro :) 
    For a business of such size there is simply no incentive whatsoever to change to 7.
    The employees are doing well with the win 2000, IS department have plenty of experience resolving issues with it. Since win vista/win 7 do not intriduce anything really new to the OS market we are not buying new licences fullstop.
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