Is The Price Right For Windows 7?

told ChannelWeb they thought the Windows 7 pricing was a little steep

Stephen Baker, Vice President of Industry Analysis for The NPD Group, wrote in a Thursday blog post that Microsoft deserves an "A+ for timing pricing, and for ensuring that this will be the smoothest transition within the industry of any Windows OS upgrade yet."

But on the pricing details, Baker quickly shifted his tone, saying that to applaud Microsoft for bringing Windows 7 upgrade prices lower than comparable Vista prices would be "damning with faint praise" -- especially when the cheapest Windows 7 upgrade, for the Home Premium version, will set you back $119 if you wait until after Microsoft's current, two-week promotion and buy Windows 7 on its official Oct. 22 release date.

"No discussion about Microsoft ever leaves everyone happy," Baker writes. "In this case I am mightily disappointed in a couple of aspects of Microsoft's upgrade plans for non-PC buyers. First, is the pricing on the Windows 7 home Premium upgrade. Besides the fact that $119 is a price point that fits nowhere in these economic times, it is still way too much for the software."

In his post, Baker also needles Microsoft for not providing a multiple license offer for Windows 7 -- where's the Windows 7 family pack, in other words, akin to what Apple provides with Snow Leopard?

"In a world (at least in the U.S.) where most opens are moving into a multiple PC environment, it would enhance the consumer home experience if they could upgrade all their home PCs at a single low price with a single boxed purchase," Baker said. "Although I don't think it is exactly equivalent, Apple's Snow Leopard pricing model ($29 for a one user license and $49 for a five user license) is much more appropriate to driving adoption and raising customer satisfaction levels. This is a direction I would have much preferred to see Microsoft head into."

Baker finally suggests that Microsoft could learn a lesson on software price points -- from itself. Microsoft's current Windows 7 promotion -- which lasts from today until July 11 -- offers a limited availability sale of Windows 7 Home Premium edition for as low as $49.99 a copy. To Baker, it's a good incentive and "should prove to be a great early indicator as to customer demand and interest."

Our take? The faster users see the end of Vista, the better, and a significantly cheap promotion price will be quick to help relieve those Vista pains and generate Windows 7 interest well in advance of that October release. The ball's in Microsoft's court to take what it learns from that initial excitement and not release software upgrades with such recession-prohibitive pricing. If PC prices themselves are dropping, how much longer are consumers going to pay three-figure upgrade pricing before they realize they're paying through the nose?