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Microsoft on Thursday finally revealed what it will charge for Windows 7 upgrades and retail versions. Partners say the pricing is a bit higher than they expected but shouldn't be a problem as long as Windows 7 doesn't create the types of headaches for users that Windows Vista did.
The bigger issue in partners' minds, however, is how the frosty economy will affect Windows 7 adoption.
In Windows 7, Microsoft has worked out the kinks that doomed Vista, but the software giant must now deal with the fact that companies are avoiding capital expenditures like the plague. Many consumers and businesses will upgrade to Windows 7 through new PC purchases, but they're not likely to make any major spending decisions until the storm clouds lift. All of this suggests that Windows 7 may be a tough sell, at least for the foreseeable future.
"The trend has been that most people wait to upgrade with the purchase of a new PC, but many businesses are hesitant to buy new PCs right now," said Neil Pearlstein, president of PC Professional, an Oakland, Calif.-based Microsoft Gold Partner. "At some point in time there will be a spike, but I don't see that happening in the next six months."
To entice consumers to spend, Microsoft on Friday will launch its Windows 7 Upgrade Option Program, which lets customers that buy Vista PCs upgrade to Windows 7 free of charge. Microsoft is also offering a stand-alone Windows 7 Home Premium Upgrade for $49.99 and a Windows 7 Professional Upgrade for $99.99 until July 11.
"There's no better time to buy a PC than right now," said Brad Brooks, corporate vice president for Windows Consumer Marketing, in a video posted Thursday to Microsoft's PressPass Web site.
The spending slowdown has put Microsoft in a defensive posture, and the company has been trying to chip away at this by warning companies of the consequences of pulling back too much on IT. Microsoft recently commissioned a Harris Interactive study that suggests companies that don't maintain a sufficient level of IT spending risk falling behind competitors once the economy does recover.
Windows 7 pricing won't be a major issue in the channel since many businesses will get it through volume licensing. Still, there's a fundamental disconnect between Microsoft's message and the one that solution providers are sending to their customers.