Skip the navigation

Microsoft: Six versions of Windows 7 for sake of PC makers, users

Analyst differs, saying it has more to do with improving profit margins in developed countries

By Eric Lai
February 3, 2009 12:00 PM ET

Computerworld - While it plans to focus on marketing two versions of Windows 7, Microsoft Corp. will offer six editions of its next operating system to better satisfy PC makers and end users, an executive said Tuesday.

"We did a lot of research and talked to a lot of [hardware] partners and customers," Mike Ybarra, general manager for Windows, told Computerworld following the versions announcement today.

"Our biggest challenge is that we have over 1 billion customers," Ybarra said. "It's hard to satisfy all of them [with a single version]. There are vocal customers who want every feature, and more regular consumers who say 'I want a version that can grow with me.'"

Microsoft said today that it will aim Windows 7 Home Premium at the majority of consumers and Windows 7 Professional at businesses. That harks back to Windows XP, which had two main SKUs: Home and Professional.

However, Microsoft will maintain all of the four other versions it offered with Vista, including the controversial Home Basic, the Starter Edition that was until now restricted to developing countries, Enterprise and Ultimate. That "SKU proliferation" confused many consumers and corporate customers.

Meanwhile, Apple Inc. releases a single version of Mac OS X with every new release. It does have far fewer users than Windows, with some estimates claiming between 30 million to 50 million users worldwide today.

Matt Rosoff, an analyst at the independent firm Directions on Microsoft, said that keeping the number of versions high is all part of Microsoft's attempt to segment the market and "maintain the average-price-per-unit of Windows sales in developed countries to counteract the effects of price pressure in developing countries, where most growth is happening."

Rosoff thinks Microsoft's rejiggered lineup is "simpler" for consumers, but remains too complicated for businesses, which will have to "check the feature list carefully" in order to choose between Professional, Enterprise and Ultimate.

Microsoft did consider cutting Ultimate, a pricy, fully loaded version that in Windows Vista was aimed at gamers and enthusiasts.

"We're keeping it because a lot of top [PC makers] wanted it in order to let them differentiate their own hardware," Ybarra said.

Windows 7 Ultimate won't have any unique multimedia features, but it will share the same advanced networking and security features as Windows 7 Enterprise, which is available to large corporations through volume licensing, Ybarra said.

Rosoff expects Ultimate to be embraced by businesses rather than enthusiasts, because they will seek to avoid locking themselves into a multiyear license agreement as is required by the Enterprise version.

Rather than cutting Home Basic altogether, Microsoft chose to sell it only in developing markets, where very cheap PCs are in demand, Ybarra said. "[PC makers] need to hit multiple price points: good, better and best," he said.



Our Commenting Policies