Dell Thinks Windows 7 Pricing May Be a Problem

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.

  • dman3k
    Prices first, guys...
  • pbrigido
    Pricing is always a "problem"...regardless of the industry. Homes, cars, tech, food, insurance, etc. Personally, I can't wait for Windows 7.
  • hellwig
    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
    I wish they'd tell us the prices and release date already.
  • ravewulf
    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!
  • cadder
    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
    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...
  • 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?
  • IzzyCraft
    Dell thinks the prices which are listed...are too high. Good old paraphrasing; what is the price model.
  • Chuck Norris
    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.