Microsoft Figures Out How to Sell Windows 8 to Upgraders

Microsoft announced on Monday that it will offer low-ball pricing to customers who want to upgrade to Windows 8 Professional on their existing computers, with a $40 offer ($70 for physical media) that will be in effect from the general availability of Windows 8 (think ~October) until the end of January 2013. I wrote a news story about this development if you need more details.

But mulling over what’s happening here, a couple of things stick out in my mind.

First, Microsoft is serious about getting people to upgrade to Windows 8 on existing PCs, a concept I’ll discuss a bit more below.

Second, when you consider this deal in the wider context of Microsoft’s other Windows 8 upgrade promotion -- where anyone who buys a new PC between now and next February gets Windows 8 Pro for just $15 -- it gets even clearer. Microsoft isn’t just serious about getting existing customers to upgrade. They want existing customers to upgrade to Windows 8 Pro specifically. Neither of these deals involves the low-end version of Windows 8, called Windows 8 officially, but called Windows 8 Core internally. (Don’t tell them I told you; Microsoft gets all miffy when I reveal this kind of stuff.)

Now, that is very interesting.

See, Microsoft has been pushing a tiered Windows client product line since the early days of NT 20 years ago, when you think about it. Back then, NT Workstation represented the business, or professional, side of the market, whereas Windows 9x was for home users. With XP, Windows was split between Home and Professional editions, and although Microsoft went off the rails with several years of far too many SKUs, or product editions, with Windows 8, the company has basically returned to a two-product offering.

OK, not really. Windows RT, which is the ARM-based version of Windows 8, muddies the waters by straddling the line between consumers and business users, and of course only Windows 8 Enterprise, which is exclusive to Software Assurance customers, offers the full Windows 8 feature set, including support for excellent technologies such as Windows To Go.

Anyway, regardless of how many Windows products editions the software giant is offering,  the emphasis is also on the higher-end, more expensive version, and Microsoft’s multi-SKU strategy was very much tied to a belief that customers would pay more for what’s perceived as a premium product. Hey, it works for Apple.

The simplification of the Windows 8 product line, and the Windows 8 Pro-only special offers we’re now seeing speak, I think, to a mea culpa of sorts. Imagine the disastrous product upgrade matrix one would have to develop to figure out exactly which Windows Vista or Windows 7 product editions support various types of upgrades to certain Windows 8 product editions. (Or don’t. I’m writing a book about Windows 8, and this sort of things literally causes me to start twitching.)

By funneling existing users mainly to Windows 8 Pro, especially right up front, Microsoft is saving itself and its customers from a support nightmare. And it's making up for the errors of its past strategy, sort of, by simply getting most customers on the best Windows 8 version that’s sold at retail.

Actually, it’s more ingenious than that.

I mentioned that Microsoft was serious about getting people to upgrade to Windows 8 on the PCs they already own. This is a tall order, apparently, since any tech enthusiast or pundit worth his bluster will tell you point blank that no one, apparently, even wants Windows 8. That it’s designed solely for tablets and touch devices, and not for the keyboard- and mouse-based PCs we’re all using today. Windows 8 could be a disaster, we’re warned. And with sidelong glances and a none-too-subtle lowering of the voice, it’s intimated that Windows 8 could be -- get this -- another Vista.

Ignoring the tolling bells for a moment, I happen to think that’s ridiculous. Indeed, after running only Windows 8 since November on all of my PCs, I recently installed Windows 7 on two PCs for my kids, and something interesting happened. Windows 7 suddenly seems old, even quaint. And in this way, Windows 8 has achieved that thing that should be the goal of any software upgrade: It makes going back to the previous version difficult, even horrible to comprehend.

People -- real people, not tech pundits -- are going to love Windows 8. I think they’re going to see all those gorgeous Windows 8 and RT tablets and devices in stores and want them, and then they’re going to want the same experience on their existing computers. And yes, on their phones too.

But who cares what I think? What Microsoft is doing, of course, is ensuring that this is exactly what happens. The message is simple: You’d be stupid not to upgrade, even if you’re not sure you’ll actually upgrade. If you buy a new PC between now and the end of February 2013 -- and at least 200 million people will do just that -- you can get Windows 8 Pro for just $15. That’s the cost of one lunch, people. And if you simply want to buy Windows 8 Pro and install it on an existing PC, that will cost just $40. It’s a no-brainer.

And to understand why it’s such a great deal, let’s just look at how Microsoft handled Windows 7 upgrades. Sure, there was a similar PC upgrade deal, albeit one that was free (with potential shipping and handling costs and late deliveries, since back then the PC makers, and not Microsoft, were responsible for fulfilling orders), but you only got the version of Windows 7 that was equivalent to your previous version. So if you went cheap with your new PC -- and who doesn’t? -- you could have been saddled with Windows 7 Starter (ugh).

Microsoft also briefly (and twice) offered the so-called Windows 7 Family Pack, a deal that was considered so incredible that women wept and men fainted in line at Best Buy. (OK, I exaggerate. No women wept.) The Family Pack was $150 and got you three Upgrade versions of Windows 7 Home Premium. So for $10 more a copy, you got a mid-level version of Windows 7. Soon, you’ll be getting the Pro version of Windows 8 (which sounds, you know, professional) . . . for even less!

(Some sourpuss will no doubt point out that Apple will soon be selling its next OS for Mac desktops and laptops, called Mountain Lion, for just $20. Mountain Lion comes in just one product edition, he'll chortle, and is half the price of a temporary Windows 8 Pro offer. Well, here’s your retort to that misguided fool: Anyone who pays the premium for Apple’s hardware and thus subsidizes that company’s ongoing software updates should get all OS X updates for free. Pass the Grey Poupon, please.)

And while I do hope that Windows 8 Pro is so successful that Microsoft gives up on its el-cheaper SKU lineup, whatever. There has never been a better time to buy a Windows PC. And with the deals we’re now looking at, Windows 8 is going to see a much faster adoption than many previously expected.

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