• Chart: Vista Retail and WAU Pricing

With the consumer launch of Windows Vista on Jan. 30, 2007, Microsoft will introduce three initiatives to make it easier for consumers to buy and upgrade the OS. Consumers will be able to upgrade from one edition of Vista to a higher one simply by purchasing a digital key online, and consumers who purchase Vista Ultimate at retail will get a discount on other retail copies of the OS. Lastly, Microsoft will sell and distribute Vista directly over the Web, making it the first OS that the company will sell online. (For suggested retail prices, see the chart "Vista Retail and WAU Pricing".)

Windows Anytime Upgrade

With the Windows Anytime Upgrade (WAU) program, consumers will be able to upgrade to a new edition of Vista by selecting the Windows Upgrade Anywhere option from the Start menu and choosing the upgrade option; after the transaction is completed, consumers will be able to download a digital key for the upgrade. The program could encourage consumers to upgrade to higher-priced editions of Vista after their initial purchase.

Through WAU, upgrades will be available from Vista Home Basic to Home Premium, or from Home Basic, Home Premium, or Business editions to Ultimate. Regardless of where the consumer buys the new digital key for the upgrade, Microsoft will keep track of the retailer or OEM that made the original sale of Vista to the consumer and will reimburse that seller some portion (undisclosed publicly) of the upgrade revenue.

Once a consumer has purchased the digital key, he will have to install the upgrade from a DVD containing all editions of Vista, which will ship in retail boxes or with OEM computers. Originally, Microsoft's plan called for all editions of Vista to be installed at once (either by the OEM or by the consumer performing a retail upgrade) and consumers would "unlock" features simply by entering a new digital key. However, according to Windows Marketing General Manager Brad Brooks, OEMs were already under a tight deadline to get PCs imaged with Vista and balked at the extra work that would have been necessary to customize the images depending on which version of Vista the consumer had actually purchased. Consequently, Microsoft decided to require a disk for the upgrade process at launch—regardless of whether the consumer buys Vista on an OEM PC or at retail. OEMs might begin to ship all Vista bits on new PCs later in 2007, eliminating the need for a disk in that situation.

Vista Family Discount

Consumers who buy a retail version of Vista Ultimate will get a discount on two retail copies of Vista Home Premium. Although this could provide an incentive for consumers to buy the highest-priced version of Vista, Microsoft does not expect many consumers to take advantage of this program, given that very few will have three PCs at home with the hardware specifications necessary to install retail copies of Vista.

Specifically, consumers who buy Vista Ultimate at retail, which costs US$399 at full price or US$259 as an upgrade from Windows XP, will qualify for the Vista Family Discount. This discount allows them to install Vista Home Premium on up to two other home PCs for US$50 apiece (Home Premium normally costs US$299 at full price or US$159 as an upgrade from XP). The program will run from Jan. 30 through June 30, 2007.

The company might revise the program after June 30—for example, the company might offer similar discounts to consumers who buy a new PC with Vista Ultimate preinstalled.

Vista Sold Online

Windows Vista marks the first time that Microsoft will sell and distribute Windows directly over the Web. The move will make it possible for consumers to buy Vista without leaving home, but could hurt retailers by removing a major reason for consumers to visit stores, where retailers could then upsell or cross-sell other products.

Microsoft has long distributed free OS updates, such as patches and service packs, for users to download over the Web, but with Vista consumers will be able to buy and download retail versions from the Windows Marketplace or from third-party retailers who've integrated their online stores with the Marketplace (such as Circuit City). Because the OS is so large, downloads will take a long time, even on a broadband connection: 32-bit versions of Vista are 2.43GB, which will take three and a half hours on a 1.5Mbps connection running at full speed, while 64-bit versions are 3.46GB, taking nearly five hours.

Once consumers have downloaded the digital key and Vista bits, they can contact Microsoft or their retailer to get a backup copy of Vista on disk.

Resources

The home page for WAU is www.windowsanytimeupgrade.com.

Details about the Windows Vista Family Discount program are available at www.windowsvista.com/FamilyOffer.

The Windows Marketplace is at www.windowsmarketplace.com. After Jan. 30, it will contain more information about how to buy Vista online.