Microsoft to Blitz Market with Six Editions of Windows 7

I understand that Seven is based on Windows Vista. But Microsoft shouldn’t make the same dumb marketing mistakes. At most, there should be two versions of the latest Windows. I strongly recommend that there be only one.

Microsoft is trying to perform some amazing magic here, using a little artful distraction to make six somehow two. In a Q&A posted at Microsoft’s press site, Mike Ybarra, Windows general manager, explains:

With Windows 7 there will be two primary editions: Windows 7 Home Premium, and Windows 7 Professional. We think those two SKUs will meet most customers’ needs. Windows 7 Home Premium is the recommended choice for consumers … Windows 7 Professional is the recommended choice for small businesses and for people who work at home.

The key word is “primary,” meaning there will be other versions but emphasizing only two as important. The full list:

* Starter Edition

* Enterprise

I’m being a little generous to Microsoft here. The number of versions is 11, not six, when factoring in 32-bit and 64-bit editions. I expect the OEM market to consolidate around 64-bit Windows, as it already has for computers shipping with 4GB or more memory. I shouldn’t forget the “N” versions—those without Windows Media Player—required by European trustbusters. They may soon demand yet another version without Internet Explorer.

Same, Same, Same
The Windows 7 version lineup essentially is the same as that of Windows Vista. There’s no substantial change here. Nor is there any real change in availability. Most PC buyers choose from one of two Vista “primary editions”: Home Premium or Business. Already, OEMs offer few Basic and Ultimate SKUs. The majority of new Vista PCs ship with Premium and some with Business. Vista Home Basic offers too little, and Ultimate costs too much. If there’s so little demand, why should Microsoft keep those versions at all?

That raises a second question: Why have both a Basic and Starter Edition? Wouldn’t it be more sensible and less confusing to potential customers for there to be one or the other, not both? By the way, Starter will come in a 32-bit version; no 64-bit.

I’m simply dumbfounded by Microsoft’s version strategy. Is there no one at Microsoft listening to the market? At times like these, I see monopoly thinking at work. Microsoft increased from three Windows XP versions (counting Starter) to six with Vista. But the market consolidated around two editions. In a competitive market, Microsoft wouldn’t have six versions where the market demanded two.

There are some subtle SKU changes that warrant further review:

* Starter Edition will be distributed only by OEMs, but be available worldwide. The broader availability, which includes the United States, is new. So where might Starter show up? Netbooks, perhaps? If that sounds like a loony notion to you, read the next two bullet points.

* Home Basic is going to emerging markets. There’s something so capitalist about the distribution. How many cast-off products end up in overseas markets because we don’t want them here? Basic is too basic for us, but not for, say, BRIC countries, eh? Domestically, Home Basic won’t be a choice for mininotebooks (such as netbooks).

* Home Premium will be the costlier choice for mininotebooks. Right now, Microsoft licenses Windows XP Home for mininotebooks, which is laughable but necessary. OEMs pay Microsoft much less for XP Home than for Vista Premium, and presumably its Windows 7 successor. XP Home will be available for mininotebooks until 2010.

* Ultimate is the promise Microsoft made to beta testers that won’t be kept. Microsoft sees Ultimate as being like a Home Premium + Enterprise SKU. That means many features people are testing now won’t be broadly available, particularly considering how Microsoft is playing down Ultimate’s availability. Mike Ybarra says Microsoft will distribute the “Windows 7 Ultimate edition to meet that specialised need.” Ultimate is “designed for PC enthusiasts.” Home Group will be available on all versions, but, as with Vista, BitLocker and other so-called business features will not be.

Microsoft will offer a Windows XP to Windows 7 upgrade, or so I heard from Microsoft’s PR agency after inquiring this afternoon, 3rd February. But there’s a strangeness to it that has me cautious. Windows XP upgraders must do a clean install. They can’t install Windows 7 over XP. Instead, they must use a backup utility to save their stuff, do a clean Seven install and then restore their stuff. Windows XP is not a “current” version. I strongly suspect there will be fine print somewhere, such as higher fees for XP upgrades.

Speaking of upgrades, that’s the other problem with all these damn versions. While most people will eventually buy Windows 7 on new PCs, many more will buy retail upgrades early on. Multiply just Home Premium, Business and Ultimate by upgrades and full versions and you’ve got lots of potential confusion. For Windows Vista with Service Pack 1, major retailers like Amazon.com offer two to four versions per SKU: full version 32-bit and 64-bit, and upgrade version 32-bit and 64-bit. From the Microsoft Store, that works out to 10 versions among four SKUs—Basic, Premium, Business and Ultimate.

Apples and Oranges
Apple has got a much smarter SKU strategy. One version. One price. All the best features are available to all upgraders. There’s no confusion about who gets what features. Apple’s upgrade rate is phenomenally better than Microsoft’s, typically better than 80 percent. By comparison, only about 10 percent of enterprises have deployed Windows Vista, more than two years after it became generally available.

Some people will argue that the comparison is apples with oranges. Microsoft sells more to businesses, while Apple’s success is more with consumers. The two markets have different needs, with businesses needing to ensure compatibility of applications and processes across all platforms. I disagree with this thinking.

Windows 7 will be Microsoft’s most Mac-like release:

* Seven will be hugely compatible with existing applications and hardware, easing business upgrade hassles.

* Windows 7 demands fewer hardware resources than Vista. Seven runs well on older hardware.

These are good reasons to make upgrades as easy as possible. One version. One price. Simple and straightforward marketing.

Something else: Microsoft’s version strategy is hugely inconsistent with its stated objectives relating to converging digital lifestyles. Home life and work life have converged for many people. New Windows 7 networking features seek to solve some of the problems of taking a laptop to and from work.

The version strategy separates many home and work functions and features, when they should be available for both lifestyles. Vista Home Premium isn’t enough for work purposes. So Microsoft offers Ultimate. With Windows 7, Microsoft is pushing Premium for home and Professional for work, and the features aren’t looking like they will meet enough personal and professional needs. If Ultimate is the solution, then why is there a Q&A with Mike Ybarra talking about how the software is for “enthusiasts” and “that specialised need”? Need—not even plural?

Microsoft didn’t listen to my “less SKUs is more” advice before Vista launched. Nothing will change the strategy for Windows 7. So I’ll ask: Do you agree? Are there too many versions? Just enough? Not enough? Please answer in comments or by e-mail.