Microsoft To Limit Free Windows 7 Upgrades: Report

Microsoft will limit to 25 the number of free Windows 7 upgrades for customers who buy PCs with Vista between June 26 and the new operating system's Oct. 22 release date " a restriction that could discourage businesses from purchasing large numbers of PCs over the next four months.

Gartner analyst Michael Silver, who publicized the restriction in a research note Friday, said businesses should demand a Windows upgrade option for all Windows-based PCs they buy between now and when PCs loaded with Windows 7 begin shipping.

Last week Microsoft disclosed pricing for the widely anticipated Windows 7 and outlined the Windows Upgrade Option plan for the new operating system. Microsoft said anyone who buys PCs from a participating OEM or retailer with Windows Vista Home Premium, Business or Ultimate Edition will receive an upgrade to a corresponding version of Windows 7 at little or no cost.

But as Silver said about the 25-unit upgrade cap in his note, "Microsoft has not publicized this limitation, to our knowledge."

"Organizations without client Windows Software Assurance [the vendor's software maintenance program] that are purchasing more than 25 new PCs between now and 22 October would have to enroll these PCs in Software Assurance at an additional cost to get the right to upgrade them to Windows 7," Silver's note said.

Silver also noted that Microsoft has said that after Windows 7 ships, "organizations needing to buy a PC deployed with Windows XP will be allowed a free upgrade to Windows 7 only until [Windows 7] SP1 becomes available (or 18 months, whichever is earlier)."

The analyst said that Microsoft's upgrade programs are targeted at consumers and very small businesses. "Gartner believes that Microsoft designs these program limitations to persuade organizations to enter enterprise agreements, enroll licenses in Software Assurance or purchase upgrades to obtain rights to run Windows 7," according to Silver's note.

Software Assurance, which provides unlimited upgrades for three years, generally costs between $100 and $150 per PC.

Organizations should pressure their PC vendors to offer free Windows 7 upgrades for all PCs they buy between now and Oct. 22, according to Silver. "If that does not work, buy no more than 25 PCs between now and October 22, 2009, if you need Windows 7 for them. Delay additional purchases until October 22 or after and then purchase with Windows 7 preloaded," he recommends.