Free Windows 7 upgrade no big deal for business customers

In another blow to customers, Microsoft says free Windows 7 upgrades – for companies that purchase new hardware between now and the Oct. 22 release date of the new OS – will be limited to 25 machines.

As of last Friday, individual customers purchasing Vista Home Premium, Business, or Ultimate are able to get a corresponding version of Windows 7 at little or no cost, according to a blog post by Microsoft’s Brandon LeBlanc.

What the post does not say, and has not been widely publicized, is the 25-unit limitation on upgrades for business customers.

The policy has been criticized in a research note by Gartner analyst Michael Silver.

I am not sure if the plan here is to convince customers not to buy new hardware until late October, but it will certainly have that effect on some companies.

Why pay now and pay later?

Especially when many feel that Microsoft should not be charging Vista customers a cent to upgrade from that troubled OS.

Silver says enterprise customers should demand an upgrade option from their hardware vendors, some of whom have the latitude to expand the 25-machine limit for their customers.

But, what if you’re not an enterprise customer who can, in Silver’s words, “obtain rights for best value?”

In that case, you are again stuck doing what Microsoft wants you to do: purchase a Software Assurance agreement for your machines and get the upgrade that way.

SA costs between $100 and $150 per machine (for three years) and generally must be purchased within 90 days of buying the new hardware.

SA offers customers all upgrades released during the membership period for the fixed price, which is less expensive than a Windows 7 upgrade for most customers.

Alternately, small businesses can, if their hardware vendors will not come to the rescue, limit their PC purchases to 25 units between now and Oct. 22.

That is just what we need during a recession, companies holding off on needed purchases they would otherwise make. And just so Microsoft’s can pocket extra upgrade money.

Look before you leap

Corporate users and could end up adding thousands of dollars to the cost of migrating to the new operating system for those who blindly jump at Thursday’s offer of a free upgrade for new PC buyers.

Use this free tool to check if your PC is ready for Windows 7.

Gartner’s Silver notes that users who buy new PCs now and don’t get a free upgrade will find down the road they have to spend upwards of $150 per PC to get to Windows 7.

“That is a pretty significant percentage of what they’re paying for those PCs to begin with.”

Microsoft’s newly posted FAQ on the Option Upgrade Program fails to mention it has a limit of 25 machines.

Microsoft made an announcement in April on the 25-machine restriction on upgrades for Vista and XP users.

As of now, corporate users will have to go through volume licensing for upgrades and/or rely on Software Assurance (SA) maintenance contracts. The contracts give users rights to new software. Those without SA won’t get any upgrade break at all beyond their first 25 PCs.

“If you are buying PCs between now and Oct. 22 and you want to move them to Windows 7 and you don’t want to buy SA on those PCs or pay for an upgrade, the alternative is to postpone your PC purchase until Oct. 22 when Windows 7 ships,” says Silver.

“I don’t think Microsoft or the OEM’s want that to happen but that is what the program sort of encourages.”A Microsoft spokesperson said the company “will have more to come in the future about other great offers for different audiences.”

“This is a replay of what Microsoft did with Vista in that they tried to make enterprises buy SA to get upgrades even on the PCs they bought during the upgrade option timeframe,” says Silver.

“Corporate users need to push OEMs and Microsoft to give them Windows upgrades on any new PCs they buy, if they don’t get them to do that they have two choices, either buy SA or delay PC purchases.”

The bottom line is that Thursday’s pricing announcement is targeted at consumers and has little bearing on companies looking to upgrade their desktops.

“These prices are data points for corporate users,” says Al Gillen, an analyst with IDC. “Most business uses will not go out and buy Windows 7 Pro at retail. The behavior corporate customers tend to have is to buy a new system with the new OS and they deploy based on getting the new OS with the new PC.”

Silver says the trick for corporate buyers is to figure out how they plan to get to Windows 7 before they buy a new PC. “There is a cost difference depending on how you get there and planning now could save some big money in the future. You need to figure out how many PCs and how they get upgrades.”


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Jim Love, Chief Content Officer, IT World Canada

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