Vista's Discount No More
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Staring July 1, consumers will no longer be able to get extra Vista copies on the cheap. |
For a company that tells everybody what it's doing way long in advance, notice of the discount withdrawal is short. Nick White posted late last night on Microsoft's Windows Vista Blog that "the program was introduced with a sunset clause that takes effect 11:59 PM Pacific Time on 30 June 2007."
Strange, in my discussions with Microsoft about this program, I don't recall there being any "sunset clause." I do recall there being a six-month trial, which from January 30 should be the end of July. What? Microsoft is cutting the discount by a month? Rather, Microsoft should extend the trial with a way better offer.
"Removing it rather than sweetening it seems to be swimming in the wrong direction," said Roger Kay, president of Endpoint Technologies.
Under the family discount plan, Microsoft would provide up to two Premium upgrades for $50 each to customers buying Windows Vista Ultimate. Considering Ultimate pricing—list of $259 upgrade and $399 full version—customers had to pay quite a bit for the savings. Contrast to Apple, which sells one Mac OS X version for $129 and a family pack of five licenses for $199.
"At a time when Vista's penetration is struggling you would think that Microsoft would add incentives rather than take them away," Kay said. "A move like this doesn't win many hearts and minds."
"How can a company so desperately in need of consumer goodwill be so tone-deaf?" asked Andrew Jaquith, a program manger with Yankee Group.
Tone-deaf is how the program started. There's something money-grubbing or out of touch about the offer because it so blatantly ignored the realities of the consumer marketplace.
Around half the households in the United States have at least two PCs. Taking into account Vista's hefty system requirements, at least one of the computers wouldn't be ready for Premium or Ultimate. Something else, which I observed when working as an analyst: The typical consumer-PC-buying pattern is to upgrade or replace the primary PC and keep the older one with the original operating system. For example, according to JupiterResearch surveys, the majority of U.S. consumers buying Windows XP PCs during that operating system's release cycle didn't upgrade the older PCs. Consumers keep the computers in use with Windows 98, 98 SE or Me.
A program in synch with the consumer marketplace would look something like this: One free copy of Windows Home Basic or low-cost Premium upgrade with any Premium or Ultimate version, whether retail box version or preinstalled on a new PC. If Microsoft is so attached to the trial period, PC manufacturers could have promoted the deal's coming end and stimulated computer sales to get the free software.
Since most consumers wouldn't upgrade the second PC, if going to Vista, Microsoft and OEMs wouldn't give up much of anything with the Basic or Premium offer. However, Microsoft and its consumer customers would achieve similar benefits: increased Windows Vista exposure and increased consumer deployments of Microsoft's most secure operating system.
There's something insincere in Microsoft's approach of offering the discount only to people willing to pay a premium for Windows Vista. Microsoft so narrowed the clientele, failure seems almost to have been the objective.
"It's possible, Microsoft didn't have many takers for the deal," Kay said.
What do you think? Does the deal's going away bother you? Did you think it was enough of deal, or perhaps better or worse? Our comment lines are open.
Related Posts:
- What Would You Pay for Vista?, Microsoft Watch, April 22, 2007
- The Trouble with Windows Vista Capable, Microsoft Watch, April 4, 2007
- How Ultimate is This?, Microsoft Watch, February 26, 2007
- Microsoft's Ultimate Disadvantage, Microsoft Watch, January 28, 2007
- Windows Vista Family Discount Is No Ultimate Bargain, Microsoft Watch, January 18, 2007
Comments (6)
Endpointing the special offer is entirely understandable. Windows mostly sells on new computers, and the special offer, like the Vista intro ads, was largely Windows dressing to remind us that we are not supposed to realize the former fact.
Vista will be a success long-term no matter what for MS (though others in the OEM and retail chain may suffer), so increased sales are not at the core of what MS needs or gets from vista. What MS gets with Vista is a bigger payback per copy of Windows, because the base version sold with so many PCs means many customers will do in-place upgrades direct via the web from MS. And Premium users will have to buy up later if they want to run Vista Premium virtualized.
And just who now gets ALL that over-the-web profit? Microsoft of course.
PC sales can continue in the doldrums because Vista routes more of the core OS profit to MS, and therefore MS is making more profit overall per PC sold. Never mind that all this comes at the expense of the hardware OEMs and retailers, who must front beefier more-expensive-to-make PCs to essentially tread water on PC sales.
Never mind that Vista has all but eliminated the low-end PC market and denied PC sellers a chance to make up on volume what they can't do on high-end sales.
Microsoft is all right, Jack. No matter that the market may be less than all right, Jack.
Posted by PolarUpgrade | June 29, 2007 10:14 AM
Last time I checked, 0 x 0 = 0. When retail sales are essentially non-existent, who cares about the discount? But this is a typical pattern for Ballmer's crack marketing crew. Step 1): Introduce a product with confused and lame promotions and ad buys; Step 2): Price it unattractively and force it down retailer's throats; Step 3): When sales flag and retailers complain, send out PR flacks to try and get some buzz; Step 4): Claim it's a runaway success; Step 5): Cut the price by 25%; Step 6): Quietly rename the product and reassign all of the managers responsible for its failure.
I'd guess that Vista/retail is now at step 5, and we'll soon see big discounts to try and move those boxes off shelves. Let's hope step #6 involves reassignment of Steve Ballmer to his retirement dacha.
Posted by ed T | June 29, 2007 11:47 AM
Would it be simply that MS (whatever the motive may be)leaves out the idea of selling Vista quickly? (of course, swallowing some pride)
Posted by Marco | June 29, 2007 12:31 PM
Perhaps no ones cares so much about the Vista deal because most don't want to ever use Vista anyway. And those who do get a new computer with Vista on it, are looking for a way to put XP or Linux on it, .
Joe Willcox,
Have you been reading all the problems with the Xbox 360?
Here is latest one;
http://www.shacknews.com/onearticle.x/47671
Plus there has been other ones relating to scatched DVDs and cpu's overheating as well.
Posted by chips b malroy | June 29, 2007 4:00 PM
I, for one, bought a retail Ultimate upgrade and my 2 Premium copies, one of which is currently installed, and the other waiting on specific hardware drivers to become available before installing. I don't think there was anything wrong either in the offering of the upgrade, or the expiring of it. It's a good way for those of us who were interested in getting all machins up to some level of Vista to do so for less than the cost of the individual licenses.
Posted by Chris | July 2, 2007 3:11 PM
I had planned to get two of these. Unfortunately, after I got my copy of Ultimate (I waited until drivers were available for my hardware...) the offer had been discontinued.
My preference: Modify the Ultimate license to permit unlimited personal/family use of any desktop Windows OS, similar to a TechNet Plus subscription that only includes Windows. In a business setting, all licenses must be used by the same person, but in a home setting they can be used by family members (similar to Office Home and Student).
If MS insists on charging Ultimate licensees for additional licenses, a holder of an Ultimate license should be permitted to purchase a number of (maybe 5) Premium licenses at low cost (maybe $20-40), and a number of free/dirt cheap Basic licenses (maybe 5), provided all licenses are for personal/family use only.
In addition: Ultimate licensing should at the very least permit multiple simultaneous installs/ instances on the same hardware, such as for virtual machines or parallel installs, with the same license.
Posted by MWPollard | October 31, 2007 4:04 PM