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Dell Thinks Windows 7 Pricing May Be a Problem

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2:51 PM - May 18, 2009 by Kevin Parrish

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.

Source : Tom's Hardware US

Talkback
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dman3k 05/18/2009 9:08 PM
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-8+

Prices first, guys...

pbrigido 05/18/2009 9:11 PM
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-3+

Pricing is always a "problem"...regardless of the industry. Homes, cars, tech, food, insurance, etc. Personally, I can't wait for Windows 7.

hellwig 05/18/2009 9:16 PM
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-16+

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.

aevm 05/18/2009 9:19 PM
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-8+

I wish they'd tell us the prices and release date already.

ravewulf 05/18/2009 9:20 PM
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-1+

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!

zingam 05/18/2009 9:20 PM
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cadder 05/18/2009 9:23 PM
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-8+

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.

jsloan 05/18/2009 9:25 PM
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andboomer 05/18/2009 9:30 PM
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-3+

jsloan :
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...



LOL! He said "Mac".

When's the next meeting of Empty Threats Anonymous?

IzzyCraft 05/18/2009 9:41 PM
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-1+

Dell thinks the prices which are listed...are too high. Good old paraphrasing; what is the price model.

Chuck Norris 05/18/2009 9:51 PM
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-2+

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.

Myrdek 05/18/2009 10:02 PM
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-10+

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

bill gates is your daddy 05/18/2009 10:08 PM
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-4+

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.

Antilycus 05/18/2009 10:19 PM
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crisisavatar 05/18/2009 10:26 PM
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-9+

I knew there was no way Microsoft wouldn't screw this one up.

sublifer 05/18/2009 10:34 PM
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-2+

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....

maximiza 05/18/2009 10:38 PM
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-1+

XP FOREVER!!!!!!!!!!

hemelskonijn 05/18/2009 10:55 PM
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--2+

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.

hemelskonijn 05/18/2009 10:56 PM
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-0+

PS: i forgot microsoft kind of already walked that road with there + packs for windows 95 98 98SE and ME.

norbs 05/18/2009 11:05 PM
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-1+

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.

Anonymous 05/18/2009 11:09 PM
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-2+

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.

MDillenbeck 05/18/2009 11:26 PM
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--3+

I believe many businesses avoided upgrading to Vista, so their choice is limited as Microsoft pulls its support for XP.

So, choices are used a product with reduced or no support and run the risk of having unaddressed security issues, use a supported product that you chose to avoid because of several known issues, or use the new product that is priced higher but seems to not have the issues you were avoiding in the other product.

Honestly, it makes good business sense that Microsoft charges more for Windows 7. The justification they can use? It would cost as much had you stepped up to the intermediary (Vista), so you have to pay for the extra research. Remember, Microsoft is here to better mankind and make research easier - they exist to make money for their shareholders. It is their corporate duty to charge as much for their product as the market will allow.

war2k9 05/18/2009 11:28 PM
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--2+

M$ TAX!

Every time Microsoft release a new OS, it cost more for same or less features.

It is like your local tax it only goes up not down.

Matt_B 05/18/2009 11:39 PM
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-2+

Antilycus :
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.


The company I work for uses Windows NT/2000 on most of the workstations still. The computers for personal and business use, use XP. A few Vista boxes are floating around in the company - but these were requested by the user themselves. Still, NT/2000 and XP make up 99% of the companies' OS share. I have heard talk of retiring NT/2000 computers slowly and as new personal and business computers are needed, Windows 7 will take their place only after SP1 rolls out. It is pretty much an industry standard that IT people wait for SP1 to give the go-ahead.

I'll tell you what would really break the camel's back on all of this stupid tiered operating system stuff, if one of the things you had to buy was skip starter, skip basic, and you had to buy at least professional or ultimate to get DirectX capability - that would be the day. What ever happened when we had one thing - Windows? To me, it is getting out of hand with how many different versions they are putting out - ridiculous I say!

doomtomb 05/19/2009 12:12 PM
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-3+

Some of you may disagree with me when I say this but Windows 7 is a glorified service pack for Vista. What I mean is, this is what Vista should have been. With that said, Windows 7 is bringing some helpful changes and needed stability but the core is still Vista. For that, I cannot justify paying higher prices than Vista or XP.

deltatux 05/19/2009 12:24 PM
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-1+

I'm most likely gonna either keep my current install or if it's really enticing enough, I'll ditch my current install and go for Server 2008 R2. I get the licenses anyways from my college, so I'm good to go. The consumer editions of Windows 7 is no faster than my current Server 2008 install and slightly faster than Windows Vista and not that glorified saviour of the Windows world as Microsoft wants you to believe.

As for the pricing for Windows 7, I'd be amazed if Windows 7 still flew off the shelves at a higher price than Windows Vista because Windows Vista was more expensive than Windows XP and it staggered. Windows Vista is not a bad Windows variant (not incl. pre SP1).

Relayer 05/19/2009 12:32 PM
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-3+

Here is how you take care of M$ - Don't buy Windows 7. Going to the movies too expensive - Don't go. Do you think cable/satellite TV is too expensive - Call your provider and tell them to take their crap out of your house.

Until people do this the prices will continue to up and up. Whining and complaining won't help. Not buying it will. That's how we got Win7 in the 1st place. Too many people are refusing to buy Vista. They are still insisting on XP. Don't give in. Keep running XP until M$ gives you what you want.

eklipz330 05/19/2009 12:35 PM
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-0+

meh, ill still switch. like ssd's, some1's gonna have to buy it to help bring prices down sooner or later

tpi2007 05/19/2009 1:10 AM
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-0+

"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,"


What do they mean with this ? Windows 7 will be more expensive compared to Vista when it came out or comapred to Vista's price right now ? When Vista came out, it was at an outrageous price. I still remember Windows Vista Ultimate cost 600 Euros. That was enough to buy an entry level computer with Windows XP, complete with monitor! The other version were equally expensive.

If Windows 7 Home Premium OEM costs more than 100 Euros and Home Premium Retail more than 150 Euros, Microsoft will be shooting itself in the foot badly.

apache_lives 05/19/2009 1:34 AM
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-1+

heh not as if Dell pays as much as we do for each licence

spunks 05/19/2009 1:36 AM
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-2+

Microsofts pricing policies have always been screwed up. Ever notice how the Upgrade cost more than an OEM version let alone the full blown out of porportion Retail version (and who knows what manufatures actually pay). Basically what this says is, If you sell the OS with some hardware its the cheapest. If you already have purchased microsoft software, your pentalized so then you pay more. And I have no idea who who pays the ridiculus retail prices.

Then there is the problem with versions of software. No mater what they tell you, there is only one version of it, and all others are stripped down versions of it. With Windows 7, it is the Ultimate version, which is unfair to the consumer because it will be the least affordable and the one that was released as an RC.
What I dont really understand of microsoft is how they expect to lure away XP users with it if the price is something that makes any hesitation. If they dont lure XP users away, then Windows 7, no matter how good, is just as successful as Vista.
XP was a very sucessful upgrade, imho, becaused it solved a real problem, which some people might not remember. Windows 98 and ME were very unstable and when a program crashed you always had to reboot your machine. XP, for the most part did away with that. What sell point does Windows 7 have that vista really didnt already have? Ask an xp user if there is something he cant do on his computer that he can do on a windows 7 machine, and he will answer no. So niether Vista or Windows 7 are problem solvers, and potentaly a MAJOR headache for XP upgraders. So unless the price is attractive enough to put up with the pain of incompatible hardware/software, making sure your personal data isnt wiped by the upgrade, ect, then I forsee at least 85%to 95% of xp users just saying "yeah, I heard its nice, I'll get it when I buy a new PC".


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