Europeans And Businesses Will Pay A High Price For Windows 7

Details of Microsoft’s Windows 7 pricing mean that Europeans may pay twice as much Americans, for a version with no browser. At the same time free upgrade limits will hit businesses hard.

When it launches in October, the business version, Windows 7, will cost £190 in the UK and €285, in the rest of Europe. Based on today’s exchange rate, that means UK customers will pay 64 percent more than Americans (who pay $200). Those buying in Euros will pay twice as much as those in the US.

The difference on the Home Premium version will be less, with UK users getting it for £80 in the UK, only about ten percent more than in the US, and other Europeans paying €120 (about 40 percent more).

The difference between the prices is partly due to the falling dollar, but there’s another factor. Microsoft wants Windows 7 to win the hearts and minds which resisted Vista, and has announced that Windows 7 prices will be about ten percent less than Vista. But that only applies in the US.

In Europe, Microsoft is only reducing Windows 7’s price by about four percent compared with Vista, and in the UK, Windows 7 will sell for the same price as Vista.

Ironically, European customers will get less for their money, as Microsoft will not include the Internet Explorer browser in Windows 7E, the European versions of the operating system. This is in response to European antitrust findings that bundling the browser was anti-competitive. Microsoft’s supporters have objected to this, including one who suggested a boycott of Opera who started the case.

Windows 7E may be the cause of the difference, as Microsoft won’t be selling upgrades from Vista to Windows 7E. An upgrade would leave Internet Explorer on the system, so users will have to do a clean install, which Microsoft promised would be “at upgrade prices” in Europe. In a question and answer on Microsoft’s site, Brad Brooks, corporate vice president for Windows consumer marketing, said “It means they get Windows 7 on time with the rest of the world at the best possible price.”

There are also big discounts for anyone pre-ordering the software, for £100 in the UK, or €110 in France and Germany.

Meanwhile, those buying new PCs between now and the release date will get a free upgrade – but this offer excludes businesses who buy more than 25 machines. Gartner has issued a Research Note advising enterprise users to complain and demand free upgrades for bigger batches of systems from their computer supplier.

The limit is a way to persuade users to buy subscriptions from Microsoft, under its “Software Assurance” scheme, that gives unlimited upgrades for three years to people prepared to pay $100 to $150 per PC, wrote Silver.

“Gartner believes that Microsoft designs these program limitations to persuade organizations to enter Enterprise Agreements, enroll licenses in Software Assurance or purchase upgrade rights to run Windows 7,” Silver wrote.

Update:  A Microsoft spokesperson responded, saying: “Pricing does vary by region and is dependent on a variety of  specific factors including, but not limited to exchange rate, local taxes, duties, local market conditions and retailer pricing decisions.”

On the specific issue of why Windows 7 cost more in Europe, the spokesperson explained the promotional pricing issue and offered the following: “This promotional pricing on Full editions is designed to ensure that our current customers in Europe are not disadvantaged by the late-breaking situation around E editions of Windows 7. This is not about playing favourites. The prices of Windows 7 retail packaged product are equal to Windows Vista’s (after the February 2008 price reductions) and in some cases represent a decrease in price. That said, while Windows 7 pricing is comparable to current Windows Vista pricing, new features offer richer scenarios and more possibilities, meaning more value for the consumer.”