Is Windows Overpriced?

By  |  Tuesday, October 27, 2009 at 9:57 am

Is Windows Overpriced?Robert X. Cringely–the one who doesn’t write for InfoWorld anymore, not the one who still does–has a post up called “Why Windows 7 Costs So Much.” The piece is not without its obvious flaws–most notably, he keeps saying Apple’s Snow Leopard is $49, when it’s really $29–but it proposes an interesting theory: that Microsoft intentionally prices Windows so high that upgrading an existing PC looks like a bad deal compared to buying a new one. (Even if Microsoft makes less money on a copy of Windows that’s preinstalled on a PC, sales to manufacturers are ultimately far more important to its bottom line than sales of shrinkwrapped copies of the OS.)

I have my doubts about Cringely’s analysis, which is in the tradition of his too-clever-by-half perspective on all sorts of topics. (Remind me again–has Apple bought Adobe yet?) As one of his commenters says, Microsoft presumably charges what it does for Windows because it’s a software company. (Apple, unlike Microsoft, gets to keep the profit from the whole computer–and it sells only highly profitable computers.) Also, Microsoft has repeatedly cut some Windows prices in recent years–a Windows Vista Home Premium upgrade started at $160 and was reduced to $130, and has now been replaced by the $120 Windows 7 Home Premium upgrade.

Oh, and there’s also the fact that when you factor in inflation, Windows costs less than it did a quarter century ago:

Cringely doesn’t mention the one version of Windows 7 that does seem like it might be intentionally priced out of reach of most folks: Ultimate Edition, which sells for $320 in its full version and which Microsoft keeps explaining probably isn’t for you:

And certainly there is also a small set of customers who want everything Windows 7 has to offer. So we will continue to have Windows 7 Ultimate edition to meet that specialized need. Windows 7 Ultimate edition is designed for PC enthusiasts who “want it all” and customers who want the security features such as BitLocker found in Windows 7 Enterprise edition.

Anyhow, Windows users, what’s your take? Does Windows 7 seem expensive, cheap, or more or less priced as it should be? Here’s a refresher on the prices of the various versions.


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14 Comments For This Post

  1. Carl Starrett Says:

    I’ve got 3 laptops, all with Vista Home Premium on them. The Windows 7 Home Premium Upgrade Family Pack is available for $149.99, so that is basically $50 per PC plus tax and many local stores are offering to install it for free. That works for me.

  2. Dave Barnes Says:

    I have an iMac with VMware Fusion and Windows XP.
    I only use XP to run IE7 and IE8 to check browser compatibility.
    $100+ to upgrade to 7 is way too expensive for me.

  3. Mike Cerm Says:

    I certainly think that the MSRP for Windows seems ridiculously high. However, the $50-100 that most people actually pay is totally reasonable. When you consider the (roughly) three-year span between Windows versions, Windows costs about $0.10/day. Is ten cents too much to pay for the software that makes your computer work? On a daily basis, I expect most people spend much more on coffee or bottled water than they do on Windows, with far less benefit!

    Any way you slice it, it’s worth paying a few dollar a month for Windows. Windows Media Center alone saves me $10/month that I’d have to pay to pay for a DVR, and the experience is a whole lot better than the crappy 2-tuner DVRs that Comcast has.

  4. Josh Says:

    Of course it’s too expensive. And Windows — both the product and the brand — gets less valuable with each passing year. I wouldn’t pay more than $50 for any copy of Windows. But, bundled with a new machine at an OEM discount, it’s a great way to keep people from noticing the cost.

    The truth is that Microsoft simply can’t afford to sell it any cheaper. It has a reputation to maintain: long development cycles managed by company bureaucrats more interested in marketing than software, resulting in multi-billion dollar losses, lackluster products, and decreasing mindshare among consumers. If Microsoft lowered the price, the percieved value of Windows — which is already pretty low — would go even lower.

    But, like you said Harry, Windows isn’t designed to be sold to consumers. It’s a mass market product intended to go directly to OEMs. Cringely may not be so wrong here. OEMs have long suckled at the Microsoft teet. Their business is wholly dependent on Microsoft. This is quite a large incentive to overprice retail copies of Windows, especially in a bad economy. From Microsoft’s perspective, they lose nothing with this strategy.

    Even so, it isn’t fair to compare Snow Leopard to Windows 7, because Apple can offset the cost of the software by padding the price of its hardware. Apple was right to sell Snow Leopard for $29 as an upgrade. I have already spent bundles of cash on Macs; I shouldn’t have to pay more for a software upgrade that offers so little in terms of new features.

  5. ediedi Says:

    I don’t see many people upgrading to 7. I think the majority will get it on a new PC. More precisely, I don’t see many XP users going for 7 – if their PC’s were underspecced for Vista, a new computer+7 would be the logical choice.

  6. Chip Says:

    I agree that many will merely buy a new computer rather than upgrade.

    And if, 1 out of every hundred buys a Mac, then Apple will increase its market share.

  7. Marc Says:

    When you take into account the fact that Microsoft will suport it for 10 years, then no. it’s a sound investment.

  8. Daniel Says:

    The price of Windows does seems excessively high, and is not much of an enticement to those affected by hard economic times or those who are content with their current OS. I own a MBP, but as a student, I was able to get a Home Premium upgrade (easily installed on Boot Camp even without a pre-existing Windows OS) for $29. I might have been willing to pay 50 or 60, but no more. I think Windows 7 will hit slight adoption troubles greatly because of these high 3-digit prices. If Windows 7 was slightly more affordable, people would be more willing to give it a try rather than shrug it off and stay content with their current system.

  9. sfmitch Says:

    I think Windows is expensive. MS charges a lot because it can. What else are users going to do? For most people, the other options (linux, mac) just aren’t options.

    Why does Office cost so much? Because, people are willing to pay.

  10. Christian Says:

    I got it for free for “hosting” a windows 7 launch party.

  11. Tech Says:

    Way overpriced! Especially in Australia. It’s close to $400 AUD for the premium edition.

  12. drew Says:

    Since I am running Vista on Parallels, I don’t use it everyday, so the .10 a day arguement does not work for me. I would drop $50 for an upgrade copy, but I will not shell out $100 plus for an upgrade. Vista works well enough. As an educator, I am frustrated that they offer it for cheap to college students, but not K-12 educators.

  13. Christoph Says:

    Considering that windows 7 does not do much more than the almost 10-year old XP, yes it is expensive. Same for the Office suite. Why would I get new software that is not faster and does the same things for me? Windows 7 and the latest office suite are free to me, and I still do not have them!!! I am happy enough with XP SP3 and Office 2003.

  14. Richard Says:

    While the price appears high for Windows 7, there is one reason for it that we don't hear much mentioned, but it's called "inflation." Yes, and it is getting worse, especially when we see a president recently spending 2 billion dollars to visit a Middle East country, while at the same time, he has refused for the past two years to an increase in Social Security for the elderly retired. Washingtoon (yes, its spelled correctly) needs to stop printing "script" money, and if they don't stop, then you may well soon be using that very same printed money with pictures of dead presidents more useful for stuffing pillows with than purchasing a oaf of bread. I was raised up through the hard years of the Great Depression, and those where really tough times for many of us. History repeats itself because government and people don't learn from it. Happy Holidays to all of you..