The Ultimate Question Answered
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On Sunday, I observed that Windows Vista Ultimate isn't much available on new PCs. There may be good reasons. |
Not much has changed today, the first day people can actually buy Vista Ultimate preloaded on new PCs. By and large, major manufacturers and retailers are sticking to Windows Basic and Windows Vista Home Premium. Now why is that?
I asked that question to analysts and Microsoft executives yesterday during Microsoft's Vista partner launch, and I got some surprising answers.
Cost weighed in as a major consideration, along with driver compatibility and potential customers (Microsoft expects bigger initial retail box sales of Ultimate than PC preloads). All three factors are legitimate reasons, and all three are likely right. Together they raise questions about whether Microsoft's version strategy simply doesn't make sense.
Weighing in Costs.
Ultimate's ultimate pricing--$399 for full-version retail and $259 for an upgrade--is an obvious purchase barrier. Microsoft doesn't release OEM pricing, but Dell, Gateway and HP add-on pricing--$170, $160 and $120, respectively--gives some perspective. The add-on pricing is on top of what the customer already pays for Windows Vista Home Premium.
"Seventy-five to 80 percent of consumers want to pay less than one-thousand bucks for their next PC," said Simon Yates, a Forrester research director.
"Price is going to be a main factor explaining why Ultimate is missing [from most new PCs]," said Endpoint founder Roger Kay.
Ultimate adds a price premium that most consumers wouldn't be willing to pay. Then again, Ultimate isn't for most consumers.
What Role Enthusiasts?
"We think there will be high demand [for Ultimate] among enthusiasts," said Brad Goldberg, general manager fo Microsoft's Windows Client Product Management Group. Goldberg predicted that, at least in the initial sales period, the mix of Vista box versions sold at retail would skew toward Ultimate.
"The majority of users will get [Vista on] new PCs," Goldberg explained. "The enthusiasts are going to be most likely to buy [retail] upgrades."
If Amazon sales rankings are any indication, Goldberg may be right. This afternoon, the Ultimate upgrade ranked third in Amazon's top software sellers list, while the Ultimate full version ranked seventh. By the way, Office Home and Student 2007 ranked second, and Professional upgrade nine.
Still, analysts remained cautious about Ultimate's ultimate adoption.
"The vast majority of people will settle for another version," said Chis Swenson, NPD's director of Software Industry Analysis.
Steve Kleynhans, Gartner's vice president of Client Platforms, predicted that Ultimate adoption "is going to be very low. I'd be surprised if across the market that it's going to be more than 1 percent."
Business acceptance would be one factor limiting adoption. "Corporations will never go for Ultimate Edition," Yates said. "They have enough trouble keeping out unauthorized software."
Missing Drivers
Gartner's less-than-1-percent prediction could easily include enthusiasts eventually purchasing Ultimate preloaded on a new PC. Problem: Almost no major manufacturers sell high-end systems with Ultimate. For example, Dell offers Windows XP Media Center Edition on its loaded XPS PCs, which range from about $2,000 in $5,500. Gamers and other enthusiasts are likely candidates for ultimate Ultimate PCs, if available.
"Don't much base it on what you see this month," Kleynhans said. "This is a shake-out month. In a month from now," manufacturers and retailers will "start bringing out higher-end SKUs."
Availability delays relate to Microsoft's ongoing bane with Windows Vista. For the systems where Ultimate is most appropriate, "drivers aren't ready yet," Kleynhans said. Manufacturers have covered the mass-market devices and components, but, particularly for high-end graphics cards favored by gamers and enthusiasts, drivers will come later, he added.
Too Many Versions?
The ultimate question may be Microsoft's approach to Windows versions. Are there too many?
During yesterday's Vista partner launch event, a reporter asked the panel about the number of versions. Dell CEO Kevin Rollins succinctly summed up the common sentiment shared by the group: "Three versions is appropriate."
Todd Bradley, executive vice president of HP's Personal Systems Group, also described three versions as "appropriate." The versions line up with how the industry segments its products, he explained.
Both executives referred to the three consumer editions. There are really six versions, including Business, Enterprise and Starter.
Analysts identified two weaknesses with the Windows Vista version strategy: Basic isn't enough and Ultimate isn't realistically available enough. Windows Basic falls far short of Premium and Ultimate features and also Windows XP Media Center Edition. For people looking to upgrade from Windows XP, Basic may not apparently seem all that different.
Premium and Ultimate look plenty different from Windows XP, and the products pack loads of extra (and compelling) features. But the differences that are most compelling over XP--Microsoft's "Wow"--are found in Ultimate.
"Ultimate, I wouldn't leave home without it," Kay said. "The most interesting stuff is found in Ultimate." Kay used as example HP's new touch-screen PC, which requires Vista Ultimate.
Kleynhans agreed. "Once you've seen Ultimate, you don't want anything else."
But limited PC preloads and high pricing will act as Ultimate purchasing deterrents, Kay said.
What Impact?
Ultimately, any versioning problem really comes down to basic networking features, like the capability to connect to a network domain, that aren't part of Windows Basic or Premium, Kay said. Consumers or small businesses--even some enterprises--will have to pay extra for all features.
By contrast, Apple offers one desktop version of Mac OS X at a single price for individual copies. If I were Apple, I'd beat the hell out of Ultimate positioning and pricing in the "Get a Mac" ads: You can pay $129 and get it all from Mac OS X or pay $399 for Windows Ultimate.
My question to readers: Would you buy Ultimate? If you would like to be quoted, please link to your Web site in any comment, or send comments to the Microsoft Watch Tips Mail Box, with your name, occuption and location. Please, everyone, identify if you are an enthusiast or casual user.
Comments (16)
enthusiast
ultimate - i'm a msdn subscriber so why not? i use a tablet (toshiba m400) and want all the features. it's not about business or home ... its about use and no limits.
Posted by Jim Hegerty | January 31, 2007 1:44 AM
Difficult decision, especially at UK prices - which are approximately twice what you pay in the US, though I think we also tend to have less disposable income.
Premium will do most of what I need, but there's that nagging doubt: "What if...?"
I'm not sure how I'll go, but I might be a candidate for getting Premium initially then taking advantage of the online upgrade option later.
Posted by Gavin Greig | January 31, 2007 4:30 AM
Hi!
I'm a Mac and Linux casual user. I probably won't buy any version of Vista.
The end of the article states Apple should include in it's ads the significant price advantage of OS X ($129) over Windows Ultimate ($399). They may do just that, but it will be disingenuous. XP is 6 years old as is OS X. Someone who spent a few hundred dollars on XP Pro in 2001 has spent less than someone who has bought the new versions of OS X every 12 to 18 months. Five versions of OS X at $129 = $515.50. That's more than Ultimate. And the new version of OS X (10.5) will be out this Spring. Another $129 anybody?
Posted by Jimmy NewSneaker | January 31, 2007 6:41 AM
Enthousiast user, I use Linux for my web server at home, use windows based servers at work, and have recently purchased a new Dell computer to run Vista. I'm not going for the Ultimate package, business suits my needs just fine, home is not for me because it is too limited. Ultimate is too expensive for me, with no 'killer' features to justify the extra cost.
Posted by Ward | January 31, 2007 12:35 PM
If I upgrade -- I've been running RC1 for about five months, Premium seems sufficient. I see nothing in Ultimate for my tastes - no tablet here. What's the WOW in Ultimate?
Posted by Bob | January 31, 2007 12:41 PM
UK pricing for Vista is high, Ultimate costs approx $180 more just by buying it here in the UK. US price $399.99 but UK Price £299.99 about $580 depending on the current exchange rate.
Personally Ultimate only has a couple of features not present in Business that can already be done by free third party software. The media center extensions are being touted even more as Bill seems to want to take over TV broadcasting but as yet their prefered device the xbox360 still cannot play Divx / Xvid video files or protected HD material (no hdmi / hdcp) for me its a feature that ends up being completely useless.
I can't see me upgrading any time soon as no killer apps need vista as yet and I won't spend £2000 on a killer PC just so that I get nice frames on my windows. No games maker will sacrifice an established XP market just to go Vista only except MS and Bungie. 'Halo 2' is down as requiring DX10 not bad for a game when it was originally released over 2 years ago ran on the old Xbox, a cutdown 386 pc!
Posted by Steve | January 31, 2007 1:04 PM
Here is a comparison chart of the features in each version of Vista.
http://www.microsoft.com/windows/products/windowsvista/editions/choose.mspx
To me, BitLocker Drive Encryption is the only interesting sounding feature of Ultimate.
Posted by JohnJ | January 31, 2007 3:46 PM
I agree with Jim (the first guy), it's a genuine matter of use vs. disuse. For years you've been able to do what M$ has done, break Windows done into it's component useful vs. useless parts (depending on your PoV)...but that was the domain of the power user or very curious; in essence, are you willing to pay a couple hundred bucks for something that you could do to all previous versions of windows? Unless you are willing to shell out for a new computer, you have awhile before software catches up to the new OS.
I would have spent the last six years trying to figure out how to not make XP such a bloatware program instead......Home vs. Business? How about useful vs. useless?
Posted by Jeff | January 31, 2007 4:08 PM
I can't argue on the issue about the cost of Vista Ultimate. However, I'm quite surprised that many are still doubtful that Microsoft and the other software and hardware manufacturers haven't resolved the issue regarding device drivers. They have been given sufficient time to produce the necessary drivers for the new OS. Maybe the problem is the process of looking for them and not their availability. Anyway, I agree that it's quite difficult to plow through the manufactuer's Web site for the drivers. There are Web-based services that could do this for you, though. I'm using http://www.radarsync.com/vista for this purpose.
Posted by Franz | February 2, 2007 1:09 AM
I can't argue on the issue about the cost of Vista Ultimate. However, I'm quite surprised that many are still doubtful that Microsoft and the other software and hardware manufacturers haven't resolved the issue regarding device drivers. They have been given sufficient time to produce the necessary drivers for the new OS. Maybe the problem is the process of looking for them and not their availability. Anyway, I agree that it's quite difficult to plow through the manufactuer's Web site for the drivers. There are Web-based services that could do this for you, though. I'm using http://www.radarsync.com/vista for this purpose.
Posted by Franz | February 2, 2007 1:11 AM
Shop around. In Australia the prices for OEM are:
Vista Basic AU$132 US$102
Vista Premium AU$163 US$126
VIsta Business AU$204 US$158
Vista Ultimate AU$275 US$213
Remember these prices include 10% tax (GST, similar to VAT).
That is US$87 extra to choose Ultimate instead of Home Premium. So if HP is charging US$120 extra and Dell is charging US$170 then shop around!
For that price difference, I'll prob get Ultimate (tho it will be on a new system not an upgrade).
These prices are from http://umart.net here in Australia - one of our low-cost suppliers (possibly similar to your Newegg?).
For the record, I have no affiliation with umart.
Posted by Peter H | February 5, 2007 8:32 AM
You know, I think that M$ is extremely vulnerable at this time... unfortunately, I don't think Apple is strategically positioned to take advantage of this vunerability.
If Apple ported is OS to the PC before this upgrade cycle gets too far down the road, I bet Apple could increase its market share 3-5x overnight... and if they marketed it right, this increased base could really jumpstart their future hardware sales as well.
I haven't owned Mac since the early days of OS8, but I have seen and tried OSX and I would certainly give it a try on my PC box. I would love to have an alternative to Windows.
Posted by Tom | February 6, 2007 2:17 AM
"UK pricing for Vista is high, Ultimate costs approx $180 more just by buying it here in the UK. US price $399.99 but UK Price £299.99 about $580 depending on the current exchange rate."
Someone has to pay for the EU fines and it will be the consumer in the end.
Posted by Steve | March 27, 2007 3:47 PM
The one and only reason I would by any OS from Microsoft is the games. I can do everthing else on linux with open office. But, because the next Halo will only run on the new DirectX, I may have to get Premium. How's that for vendor lockin.
But, for now I'm not buying ANY new PCs until Vista shakes out the bugs and comes down in price. So the net effect is Vista is preventing me from buying any new hardware.
Posted by rkeene | March 27, 2007 4:32 PM
I plan on not buying *any* version of Vista until i simply have no choice - i finally went to XP from W2K in February, simply because i was hitting aps that didn't like W2K, and becaise of MS's diminishing support for the older OS.
Now that i have XP, i plan on not changing until i can no longer get support for it.
Posted by mikew | March 29, 2007 10:49 PM
I keep having issues updating for home preimum vista to ulitmate. Im on a gateway anybody have this issue? Something about updating gatway drivers but all the drivers are updated.
Posted by mike | September 5, 2007 5:43 PM