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Microsoft (Nasdaq: MSFT) said last week that designated PCs with premium versions of Windows Vista preinstalled will qualify for upgrades to the equivalent Windows 7 product once the final version of Redmond's next-generation operating system becomes widely available in the fall.
However, reports that Microsoft is restricting the number of upgrades some companies can receive have sparked speculation that businesses may hold off on buying new PCs until after Windows 7 is released on Oct. 22.
Who Can Upgrade?
People buying PCs from participating OEMs or retailers with one of three Windows Vista versions will get an upgrade to the corresponding version of Windows 7 at little or no cost, according to a blog posting last week by Brandon LeBlanc, a Windows communications manager at Microsoft.
While personal users who buy a PC between now and October may be able to upgrade for free, what about businesses, some of which may plan to buy dozens or even hundreds of new computers over the coming months? Microsoft will grant them free upgrades as well, but on a limited basis: 25 upgrades per business.
This is an increase over the number of free upgrades Microsoft had allowed in similar situations in the past, according to company spokesperson Ian Bragg.
"Past iterations of the program limited the number of free upgrade requests to five for customers buying Windows preinstalled on a new PC," Bragg told the E-Commerce Times. "With Windows 7 Windows Upgrade Option for new PCs, Microsoft has increased that limit by five times, to 25 upgrades."
Many larger businesses already have software assurance agreements that provide them upgrades to Windows 7 Enterprise, according to Bragg. "If they don't already, they can purchase Software Assurance for new PCs to qualify for an upgrade," he noted.
That position doesn't cut much ice with Gartner (NYSE: IT) analyst Michael Silver.
"It revives complaints organizations have had that Microsoft tries to force them into licensing programs they don't want to be in," he told the E-Commerce Times. "Lots of large organizations don't have Enterprise Agreements or don't include Windows clients in them."
This restriction to 25 upgrades will force businesses to put off buying new PCs until Windows 7 ships, Silver said.
The cost of software assurance depends on several variables. These include what is covered -- clients, servers, software, and server/software combination packages, for instance -- as well as the number of items covered. Other factors include quantity discounts.
Companies with software assurance reportedly pay between US$100 and $150 per PC for the right to unlimited free upgrades over a three-year period.
The Cost of Upgrading
Vista users who do not qualify for a free upgrade will have to purchase an upgrade copy if they wish to use the new OS. Estimated retail 
pricing is $119.99 for Windows 7 Home Premium; $199.99 for the Windows 7 Professional upgrade; and $219.99 for the Windows 7 Ultimate upgrade.
Installing a new version of Windows 7 on a computer that isn't already running Vista will cost more. Estimated retail prices for the full packaged retail version of Windows 7 in the U.S. will be $199.99 for Win7 Home Premium; $299.99 for Win7 Professional; and $319.99 for Win7 Ultimate.
In an attempt to boost demand for Windows 7, Microsoft is offering people in select markets a chance to preorder Windows 7 at a discount. Windows 7 Home Premium can be preordered for $49.99, and Windows 7 Professional for $99.99, for example.
Users Gnash Their Teeth
The pricing drew strong comments from many Windows 7 team blog readers; many say that Windows 7 is practically a service pack for Vista.
One of them was a user going by the handle "Jaxim," who suggested Vista owners should get a 50 percent discount.
"I'm a PC and I'm mad as heck!" Jaxim railed.
Another respondent angered at the pricing was Nixarn: "So first we Vista Ultimate users pay a huge price for a Vista version that is not in any way worth the money and now we have to pay even more for an upgrade?"
jbs221, who described himself as an early adopter of Vista, pointed out that Apple's (Nasdaq: AAPL) pricing for upgrading its Leopard operating system was more reasonable. "I'm a PC but embarrassed as hell about it," he wrote. "I made fun of Mac folks. No more, they win."
"Microsoft does not charge for the license," Bragg said. It's up to PC manufacturers and retailers as to how much to charge for the upgrades, he said.
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