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

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 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

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

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