Will Windows 7 really cost more than Vista?

While Darren Ward, Director of Product Management for Dell’s Business Client Product Group, has said that Microsoft is likely to charge more for Windows 7 licences than it did for both Windows Vista and Windows XP, I’m not 100 per cent convinced that it'll affect consumers in quite the same way it does OEMs.

I would be quite surprised if the price increase is as widespread as implied by Ward’s statements – many commentators seem to think he means that every version of Windows 7 will be more expensive, but I think it’s likely to affect a smaller subset of potential Windows 7 adopters.

It’s important to understand the context in which the news was reported because I think that it makes quite a difference to what Ward actually said.
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First of all, Ward works in Dell’s Business Client Product Group and so he’s more than likely referring to how much Windows 7 Professional is going to cost. Given Windows 7 Professional’s improved feature set compared to Windows Vista Business, it’s easy to understand why it might cost a bit more. That's not to say it's pleasing to see Microsoft potentially increasing prices for businesses given how tight things are at the moment.

If Ward isn’t referring to just Windows 7 Professional, Microsoft has said that Windows 7 Home Basic is not going to be available in developed countries at all, which obviously has an impact on the minimum adoption cost because Windows 7 Home Premium isn’t going to magically occupy the space currently taken up by Windows Vista Home Basic – it will be a like-for-like replacement for Vista Home Premium and I believe this will be the version that most bit-tech readers opt for.

Microsoft’s decision to get rid of the Home Basic Edition in developed markets – including Australia, Canada, Israel, New Zealand, the US and the UK, as well as most of Western Europe – is a brave one, but it’s one that is probably backed up with hard data. I doubt many of you would have knowingly purchased Windows Vista Home Basic when Home Premium offered quite a bit more functionality for not much more.

However, Microsoft did play tricks with consumers and OEMs alike when Vista launched, because Windows Vista Home Premium commanded a higher price than Windows XP Home. That caused an uproar amongst OEMs (and the whole Vista Ready class action suit shenanigans), because in order to deliver the widely advertised Vista experience, OEMs had to include Home Premium as a bare minimum. And now with Windows 7 Home Basic not even being an option for OEMs, the price per licence will increase for them regardless of whether or not Windows 7 Home Premium hits a similar price point to its Vista equivalent.

From a PC enthusiast's perspective, Windows Vista Home Premium is (and always was) the ‘entry level’ version of Microsoft's current OS and I will be surprised if there’s a massive price increase on that particular version of Windows 7. It is the version that most of us are likely to buy when Windows 7 launches, but the fact that OEMs are speaking up already does concern me a little.

Microsoft has so far been incredibly careful to limit the amount of information released about its Windows 7 plans thus far – even the release date hasn't been made official, although late October is looking the most likely timeframe at the moment. The lack of information on pricing, which may or may not have been finalised this far away from the OS's launch, could undo a lot of the goodwill Microsoft has built up during Windows 7's development. At the moment, there's no reason to believe Windows 7 Home Premium will cost more than the Vista equivalent, but unless Microsoft squashes the rumours with an official announcement, the gremlins will continue to feast in the dark.