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Dell Thinks Windows 7 Pricing May Be a Problem

By - Source: Tom's Hardware US | B 13 comments
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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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  • -1 Hide
    apmyhr , 19 May 2009 04:19
    Wow. Microsoft charged at least 400 dollars for Vista Ultimate when it came out. If they charge even MORE for Windows 7, my jaw will drop...
  • -1 Hide
    mactronix , 19 May 2009 05:44
    As the article said this will be the thing that holds it all back, if its true. Why the hell camt M$ understand the economics of selling more cheaper works out better than selling less for more. No one has to upgrade to W7 and if the price is stupid even though im liking it a lot i will stick with XP. And i dont mean untill the price comes down i mean untill lack of updates/support make it non viable. Or i could just run the RC as long as i re boot every 2 hours :) 
    Mactronix
  • -1 Hide
    Anonymous , 19 May 2009 06:55
    It would appear that they are trying to recoup all the lost revenues from their previous failure windows vista. They should only blame themselves and accept the fact that vista was a poor OS and it isn't anyone else's fault but theirs and their dodgy software architects... who, by any account, should be taken in the back and shot!

    Now double-charging (W7+Vista) the poor folk out there for your mistakes is not the right way for any company to go about it. Otherwise they're doomed to fail, again!

    Bye. Jon.
  • Display all 13 comments.
  • -1 Hide
    mactronix , 19 May 2009 14:53
    ^ +1
    HEY MICROSOFT LINUX IS CLOSE TO BEING A GOOD ENOUGH ALTERNATIVE FOR EVERYONE.
    Over price W7 at your peril, Pirates will crack it and people will download it. Never mind DRM and Product keys, online activation etc. Make a decent OS and charge a fair price and people will buy it. It really is that simple.



    Mactronix
  • 2 Hide
    ukctstrider , 19 May 2009 19:16
    Just for starters, there was little wrong with Vista, the only major problem was slightly inflated resource cost which made it sluggish on slower older PCs. It was also fairly poorly supported (at least the x64 version) by software vendors which isn't really Microsofts fault.
    For seconds... XP isn't really viable any more. It has several major security flaws which are now well known enough in the hacking/virus/malware community to make it unsafe to run in a business environment.
    On pricing... Windows has always been competitive, it has always been cheaper than an Apple offering and is more user friendly than Linux. (I use Linux at work on Sun servers and I think it's great so I'm not bashing it, but it's nowhere near the usability needed for the general public).
    On Vista Ultimate... if you actually need Ultimate edition then $400 is a decent price. If you just want a version of Vista to run on a home PC then an OEM version of Home Premium x64 set me back £60 (around $100) and does everything I need it to do.
    Lastly... on downloading Pirated versions of an OS, why they hell would you take that risk. In my experience most cracked OSs have been seriously altered and are either unstable or have inbuilt malware. Offical copies are cheap enough to pick up as OEM. I've never understood people who are prepared to spend £400 on a graphics card only to pirate the OS...
    Actually lastly... Microsoft understand the economics of selling quite well, I doubt they need your advice.
  • -3 Hide
    belrik , 19 May 2009 19:56
    I've been running Ubuntu on my desktop since Jaunty beta and I'm not going back. I have XP in a VM for running Outlook and that will go once the Exchange connector in Jaunty supports Exchange 2007. It's not difficult to use, I can mount remote filesystems easily and my file-shares from other sites are more responsive to use than they were under Windows.
    I just don't get the argument for Linux being more difficult to use. I installed Vista and was left with a box with no accelerated video drivers, no NIC, no soundcard. How is that easy? It's a f****ng nightmare and you have to hunt down all the drivers manually cos M$'s Hardware Assistant seems unable to locate them. I mean what is the point of that "search internet for available drivers" option, it does NOTHING.

    So, the way I see it is Vista to play games for DX10. Everything else under Linux. Free. Easy.

    The argument about people not understanding it is pure laziness. "I used to have a button that said Start, now I don't, Help!" Yeah, it says Applications now. What a huge paradigm shift that was.... ;) 
  • 1 Hide
    pSynrg , 19 May 2009 20:32
    belrik: Linux in a Windows environment is an absolute nightmare at the best of times. Your experiences with Vista exactly mirror my experiences with even the user friendly interpretations of Linux. Never had a problem with Vista driver installs at all. And that's with 30+ Vista users on my company network. Alongside a typical SMB IT system (ie. Windows Server 2003/2008) I run one Linux server and that is only for Unix compatibility. There's no way I'm ever going to try and align my end users with < 3% of the world PC population. They'd string me up by the balls. It's been tough enough moving them from Office 2003 to Office 2007!

    No, the only problem with the brilliant Windows 7 is the simple fact that all the Macolytes and Linux nerds come crawling out of the woodwork to try and put it down. If in all the years since XP was introduced all Linux has been able to manage is < 3% user base then I can understand your misplaced fear as Windows 7 is an even stronger product than XP ever was, yes, even stronger than Vista but without the marketing train wreck...

    Microsoft seriously needs to rationlise the versioning though - two versions only please! Home and Professional - with maybe an Enterprise edition (but identical to Pro) for volume licensing...
  • 0 Hide
    jcook21 , 19 May 2009 20:34
    ukctstriderJust for starters, there was little wrong with Vista, the only major problem was slightly inflated resource cost which made it sluggish on slower older PCs. It was also fairly poorly supported (at least the x64 version) by software vendors which isn't really Microsofts fault.For seconds... XP isn't really viable any more. It has several major security flaws which are now well known enough in the hacking/virus/malware community to make it unsafe to run in a business environment.On pricing... Windows has always been competitive, it has always been cheaper than an Apple offering and is more user friendly than Linux. (I use Linux at work on Sun servers and I think it's great so I'm not bashing it, but it's nowhere near the usability needed for the general public).On Vista Ultimate... if you actually need Ultimate edition then $400 is a decent price. If you just want a version of Vista to run on a home PC then an OEM version of Home Premium x64 set me back £60 (around $100) and does everything I need it to do.Lastly... on downloading Pirated versions of an OS, why they hell would you take that risk. In my experience most cracked OSs have been seriously altered and are either unstable or have inbuilt malware. Offical copies are cheap enough to pick up as OEM. I've never understood people who are prepared to spend £400 on a graphics card only to pirate the OS...Actually lastly... Microsoft understand the economics of selling quite well, I doubt they need your advice.


    Hit the nail on the head - as far as I am concerned
  • 0 Hide
    ukctstrider , 19 May 2009 21:27
    I don't want to make it sound like I am down on Linux. In a business sense it is definately the OS of choice, I am actually quite excited about the Sun buyout from Oracle because in my world (databasing) an Oracle database running on a Sun box running Solaris is as good as you can get.
    But... there is no way I want the headache of my extended family ringing me up all the time because they have just put Linux on their PC and can't figure out how to install software/update drivers/connect their printer...

    Some of the views on this site massively lack objectivity. This site is very much populated by power users and what works for you is very unlikely to work for the general population at large.
  • 0 Hide
    Anonymous , 19 May 2009 21:46
    I previously commented on the Windows 7 blog that if all Windows 7 versions were shipped together on a single DVD with a retail price of $100 (£60 approx)the take up would be huge.
    Users could decide which version they wanted to install to suit their hardware.
    Retailers would only have to have one large display of stock rather than Basic, Starter, Kindergarten, Student, Business, Enterprise, Ultimate, Ultimate Max Full fat etc etc.
    Piracy would be greatly reduced as most users, business etc would be able to afford to upgrade their OS without taking out a loan guaranteed against their property, you speak to most people currentl using a pirated OS and ask them want a full blown Windows 7 for 99.95 and you will get a resounding yes.

    One disk - one price - let the user decide which version.
  • 0 Hide
    mactronix , 19 May 2009 22:02
    Well said Mark, @ ukctstrider, your coming at it from a business point of view and with that in mind most of your coments are fair enough. However home users who by the way really shouldnt have access to OEM software anyway. Thats the same as piracy really, your getting something you shouldnt have for a lot less than it should be. Anyway home users wont pay that sort of money and a new build just to get a new OS isnt viable financially for a lot of people right now. So whats the options run the older OS into the ground or get a dodgy copy. They were actually selling discs on Ebay at one point.
    Mactronix
  • 0 Hide
    ukctstrider , 19 May 2009 22:20
    Mark, Windows 7 does come with everything on one disk, it's the activation code which dictates which parts install, that's why it is so easy to upgrade on the fly. £60 is about right for an OEM copy and you can legally get hold of OEM if you buy the right parts with it (CPU, Mobo, HDD, not sure what else).
    Additionally almost all OSs are sold as OEM with new PCs, the upgrade market is significantly smaller (also this thread/article is all about OEM), I do think that this current price structure is quite compicated but it is designed with Netbooks in mind so that hardware vendors can supply Netbooks with the latest version of Windows and Microsoft can supply it at a smaller price with some tokenary restrictions.
    I do agree that off the shelf boxed copies of Windows are over priced.
  • 0 Hide
    mactronix , 19 May 2009 22:47
    Just checked and XP is £67 as OEM and Vista is about £20 dearer, so i recon either price cuts on Vista or we are looking at about £100-120 for W7 OEM. However the article is about the ASP of the OS which to me is just the OS which means a retial version

    Mactronix