Microsoft Makes Full-Bit Windows Vista Bet

According to several sources briefed on the Vista packaging plans, the Redmond, Wash., software giant will market several versions of Vista in the United States but will distribute the same master OS bit set with all copies shipped so that users can unlock and step up to more full-featured editions electronically. “No matter which edition you buy, you get all the bits and a key to unlock it,” said one source.

The plan will drive more incremental revenue for Microsoft and provide an electronic way of pitching Windows Live services and Web services, sources said.

Sources said Microsoft plans to announce the feature-complete Beta 2 version of Windows Vista in January. But late on Friday, Microsoft spokeswoman Sarah Williams told CRN that the next Vista Community Technology Preview is due in February. Vista is expected to ship by year&'s end.

Observers expect the packaging and distribution strategy will eliminate costly support headaches for OEMs, system builders and service partners and help customers step up. OEMs worried about selling and supporting many SKUs of Vista until they saw this delivery model, one source said. In contrast to the two versions of Windows XP, Home and Professional, for example, Vista includes six versions: a starter edition, basic home edition, home premium edition, business edition, enterprise edition and Vista Ultimate edition, sources said.

The master OS will eliminate the need for service partners to support multiple OS images and wipe and reload PCs every time a customer wants to step up to more full-featured products.

“If an OS gets hosed and we have to reload, it means making sure we&'ve got the correct set of disks for that specific load, be it XP Home or Pro, finding out what specific service level [the customer has] and the type of licensing model,” said Jeffrey Sherman, president of Warever Computing, Los Angeles.

The plan also will hurt VARs&' services business. Partners hope Microsoft rewards them for step ups they influence, but they are not optimistic.

“The current need to reinstall new versions of Windows when users step up is a significant source of revenue for some partners,” said Oli Thordarson, president of Alvaka Networks, Huntington Beach, Calif.

Still, most maintain the positives outweigh the negatives. “With this, we&'d likely be able to convince more customers to upgrade since the total costs aren&'t so high,” Sherman said.

Having several versions of Vista also poses a sales challenge to partners. But one VAR said the planned business version for SMBs and separate enterprise version for volume licensed customers will simplify the sale and help them sell Software Assurance.