RealTime IT News

Microsoft Shakes Up Vista Options

Microsoft  is tweaking the pricing of its new Vista operating system before the product even hits the market.

When the company drops Vista to the retail and consumer market on Jan. 30, it might encounter a very different selling environment than it did five years ago, when it made its last major consumer release.

So the company announced three initiatives that it hopes will encourage consumers to pay for Vista Premium or higher, as well as encourage households with more than one PC to upgrade their equipment to Vista.

The Windows Anytime Upgrade program will let customers buy a lower-end version of Vista than "Ultimate" and then upgrade to an intermediary or top-line version later.

For instance, customers will be able to upgrade from Basic to Premium for $79, from Basic to Ultimate for $199 and from Premium to Ultimate for $159.

According to Bill Mannion, director of marketing for Windows Client, the upgrade program is intended to help customers who discover that they bought a less useful version of the operating system than they should have.

"It allows them to buy the incremental difference but only pay for the increased functionality," he told internetnews.com.

With earlier Microsoft operating systems, customers had to pay full retail price if they wanted to upgrade from, say, XP Home to XP Professional.

The Anytime Upgrade program may also suit fence-sitters who aren't willing to plunk down $399 for a new operating system that, in their view, doesn't offer more than they already have with XP. That is especially true of customers who aren't about to spring for a new "Vista-ready" PC. Microsoft's As suggested price for the basic version of Vista is $199.

Vista Premium offers more graphics and multimedia functionality, including the Aero user interface, but requires more robust video cards and memory capacity than the Basic version.

Ultimate includes multiple language support, so different members of the household can log on to the computer using a different language, and it encrypts the contents of the hard drive.

Yankee Group analyst Laura DiDio noted that consumers are increasingly behaving like corporate customers, 85 percent of whom only upgrade their software when upgrading hardware, she said.

"There's more of a willingness to hold onto their current software until the thing dies," she told internetnews.com. The upgrade program "cuts out the need for consumers to have to buy a new computer."

But Mannion denied that the upgrade program is a hedge against consumers who weren't ready to purchase a new PC. Accelerating the purchase decision is "not part of the [company's] thinking."

"We think the optimal customer experience is to get the customer on the right version from the beginning, but we're recognizing that there are situations where they might not buy the right product for them at first," he said.

In another effort to goose Vista sales in the early going, Microsoft also announced that customers will have six months to decide if they want to license up to two additional copies of Ultimate, the high-end version Vista, for $49.99 each.

The so-called Family Discount will run through June 30, but Mannion said the company will re-evaluate that date toward the end of June and may extend the offering for a longer period of time.

Microsoft said that consumers will also be able to purchase a full version of Vista directly from Microsoft or other retailers through its e-commerce store, Windows Marketplace.

Customers will be able to download both 32-bit and 64-bit versions of Vista using the company's digital locker technology, which manages the entire purchase and download process, including fail-safe measures that ensure continuity if the download is interrupted for any reason.

Mannion said Microsoft decided to make Vista available via download in view of a "growing trend in the industry... particularly at the higher end of the market."