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.

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  • apmyhr
    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...
  • mactronix
    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 :)
  • Anonymous
    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.