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With Vista, Microsoft jacks up tech support costs for consumers

It was 'underpriced' compared to rivals like Best Buy's Geek Squad

By Eric Lai
February 5, 2007 12:00 PM ET

Computerworld - Microsoft Corp. has significantly raised what it charges retail customers for technical support for its latest software, Windows Vista and Office 2007, while narrowing the help offered to users.

As of Jan. 30, customers who buy full retail copies of Vista and Office 2007 will get unlimited calls, e-mails and Web chats with Microsoft technical support during the first 90 days after activating the software. But after that period, customers contacting Microsoft for help with Vista will pay $59 per incident, up from $35, according to Matt Fingerhut, general manager of consumer support for platforms and business applications. For technical assistance with Office, customers will pay $49 per incident, also up from $35.

Previously, Microsoft offered unlimited support to customers with problems installing Office or Windows for as long as they used the software, Fingerhut said. Customers also could get help on two additional support incidents of any kind for free. Customers with existing software who have not used up their free calls to Microsoft can still use them, Fingerhut said.

Fingerhut said that Microsoft realized last year that its support prices were lower than those charged by competitors, including Best Buy's Geek Squad, CompUSA's TechPros, Circuit City's Firedog and dedicated service providers such as PlumChoice.

"Our $35 price is at least a decade old," he said. "We were underpriced, both in terms of the value our customers felt they were getting, as well as the prices the third-party service providers were charging."

Even with the higher prices, Fingerhut said Microsoft "is barely in line with the lowest prices our competitors are charging."

For a new category of help calls Microsoft labeled "scenario-based assistance," Microsoft will charge $79 per incident. This includes more advanced assistance such as helping customers set up home networks, optimize operating system performance or install and run certain third-party hardware and software. Previously, such issues, if Microsoft could handle them, cost $35 per incident, said Fingerhut.

Problems with all other Microsoft consumer software, such as Money, will still cost $35 per incident to diagnose and fix.

"Microsoft is clearly setting the stage for what could be higher costs for support over time," said Paul DeGroot, an analyst with Kirkland, Wash.-based Directions on Microsoft, an independent research firm. But he added that complicated technical issues such as those that fall under "scenario-based assistance" probably merit their higher price due to their difficulty.

Caveats and exceptions

Microsoft will continue to help customers free of charge for issues related to security or viruses, as well as Windows Update/Microsoft Update.

The new, higher prices for support apply to all older software for which Microsoft still offers mainstream or extended support. That typically lasts 10 years, though Microsoft said last month it will extend support for Windows XP Home and Windows XP Media Center until April 2014, or almost 13 years after their first release.

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