OS upgrades: Cheap is better than pricey, free is better than cheap

Apple's shown the way with free OS X upgrades, but will Microsoft follow? The numbers say that would be smart if Redmond is after service revenue

The cheaper, the better.

Lowering the price of an operating system upgrade accelerates its uptake five-fold, but setting an upgrade free stomps on that pedal, boosting uptake as much as 12 times, data from an analytics company shows.

Microsoft has likely run those numbers too, and internally may be making the case that it's better to expand Windows-for-free to all upgrades, not just the more minor updates like Windows 8.1. (Don't let Microsoft catch you calling Windows 8.1 an "upgrade;" to them, it's an "update," and for financial reasons, even though it is free.)

The numbers game is admittedly a bit iffy, since it's comparing, well, apples and oranges, necessitated by comparing upgrades within Apple OS X world to those of Microsoft's Windows. But the results seem clear: cheap is better than pricey, free is better than cheap.

Free trumps all, in other words. Or as Apple's Craig Federighi, who leads software development at the Cupertino, Calif. company, put it last October: "Free is good."

Last month, OS X 10.9, aka Mavericks, accounted for 59% of all Macs running it and its two precursors, Mountain Lion and Lion, an increase of 4 percentage points from January, said California-based Net Applications.

(Unlike others, Computerworld stopped the in-Mac comparison at OS X 10.7, aka Lion, because Snow Leopard, or 10.6, has been nearly unaffected by the draw of the free Mavericks.)

Apple dropped the price of Mavericks to zero, giving it away to most, although not all, of its customers running Mountain Lion, Lion and even 2009's Snow Leopard. On the other hand, Mountain Lion, which came out in mid-2012, carried a price tag of $19.99, a third less than 2011's Lion.

That $20 price cut drove Mavericks adoption at a much faster pace, according to Net Applications' statistics, with Mavericks' user share -- a rough measurement of the percentage of the world's personal computers running a specific operating system -- 1.8 to 3.2 times higher in any given month than its predecessor, Mountain Lion, at the same point in its post-release life.

On average, over six months, Mavericks' share of it and its two precursors was 2.1 times higher than Mountain Lion's share of it and its two ancestors.

That's the power of free since, frankly, there's not a tremendous difference between Mavericks and Mountain Lion, which is Apple's doing and by design, as it creates evolutionary -- many say "minor" -- iterations.

Free has also accelerated Windows adoption, with Microsoft for the first time offering something more than a collection of fixes -- in its terminology, a "service pack" -- for a zero price.

When Windows 8.1 (free) was compared to Windows 8 (not free), the former clearly had a faster uptake pace. Last month, 40% of PCs running Windows 8.1 and its predecessor, Windows 8, ran the former, an increase of about 3 percentage points from the month prior.

Over the last six months, the no-cost Windows 8.1's share of the combined user share of it and Windows 8 was 7 to 20 times higher than that of Windows 8's share of it and Windows 7 at the same point in Windows 8's post-launch timeline.

On average over those six months, Windows 8.1's share of it and its precursor was 11.7 times higher than Windows 8's share of it and its ancestor.

(Microsoft charged $39.99 for a from-Windows-7-to-Windows 8 upgrade for several months; Windows 8.1 was free to anyone running Windows 8.)

Again, the power of free.

The same advantage held for lower-priced upgrades over those that cost more, although the edge to the former was not as dramatic.

OS upgrade uptake
Free operating system upgrades outperformed paid on both Windows and OS X in adoption rates, and less-expensive upgrades, like the $20 Mountain Lion, got a larger percentage of customers to move up than did pricier offerings like Windows 8. (Data: Net Applications.)
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