Microsoft is Leaving Money on the Table

If Windows were priced similarly to Mac OS X, I would have by now bought at least one full copy each of XP, Vista, and Windows 7. Instead the last non-bundled Windows I bought was Windows 2000 right before XP came out. It’s too damned expensive, and the DRM is too annoying. In fact, I can buy a full computer with Windows for roughly the cost of one Windows 7 license; but I can’t reuse the software on my Mac in Parallels or Bootcamp so I won’t even do that.

If someone cracked Windows 7 activation so I could use it on multiple machines, maybe I could bring myself to pay the $250+ Microsoft wants for a copy; but as is I’ll just do without. Looks like someone’s selling old copies of Vista Home Basic for $99 and Ultimate for $135. Maybe I’ll grab one of those. XP costs $90-300 if you can even find a copy.

Checking prices on Amazon today, Windows 7 Professional retails for about $250 and Windows 7 Ultimate costs around $300. Even an upgrade to Windows 7 Ultimate costs almost $200. By way of contrast, Mac OS X Snow Leopard costs about $25; there’s no annoying activation to fight with; and you can install it clean on as many machines as you like. If you want to pay a little more attention to the legalese, then you can buy a 5-license family pack for under $50. The current version of Windows is literally 10 times as expensive as the current version of Mac OS X, and that’s being generous to Windows. If we compare to Ultimate edition instead, Windows is twelve times as expensive. If we want to install it on 5 computers, it’s 20-24 times as expensive. Perhaps I’m being a little unfair since Apple’s tight control of hardware means pretty much all Mac OS X sales are upgrades, but even then the cheapest Windows 7 Upgrade is more than 3 times as expensive as Snow Leopard. How’d that happen? Weren’t PCs supposed to be cheaper?

I’ll tell you what happened: Microsoft still has an effective monopoly on PC operating systems, and they’re protecting it. While the price of most software is going down, the price of Windows is going up. Office is below $100, but there’s real competition for word processors and spreadsheets. There’s no competition for Windows Mac OS X won’t run on most PC hardware, and desktop Linux is a failed project. Microsoft figure sit can make more money squeezing people who ar elocked into their platform than by selling a few extra copies to folks like me who have a choice.

7 Responses to “Microsoft is Leaving Money on the Table”

  1. Sven Peters Says:

    Just buy OEM-Versions, they’re almost affordable.
    The only thing you’ll miss is that shiny box :)

  2. Elliotte Rusty Harold Says:

    OEM versions can’t be installed on a new computer when you upgrade. I’m not sure how well they work with virtualization either.

  3. Sven Peters Says:

    Well, I guess I can when the time comes.
    I just noted the prices on are insanly high versus (note, this one even includes vat) for windows
    Also there seems to a licensing difference between an US OEM Version of Windows 7 and an EU Systembuilder of Windows 7.
    Bad luck.

  4. Gordon Weakliem Says:

    Another way to look at is is that Apple owns a monopoly on the hardware that runs OSX. Apple makes their money on hardware, Microsoft doesn’t have that option and has to make their margins on software. Even with the higher OS cost, Wintel machines still end up with the cheaper sticker price.
    If desktop Linux is a failed project, it’s only because most people take what comes with the PC and never upgrade it, let alone wipe the drive and install something totally different. I don’t have actual statistics, but I’d venture that at least half the copies of Windows sold are never upgraded.

  5. Elliotte Rusty Harold Says:

    When equivalent machines are compared (same processors, hard drive, RAM, component quality, warranty, etc.) are compared Macs have been the same price as or a little cheaper than PCs for years. Admittedly Apple doesn’t play in the ultra-cheap segment of the market. For instance, they don’t make seven and eight pound notebooks that cost less than the 3-5 pound notebooks they do make.

    At current margins, I expect Microsoft makes more on many hardware sales–especially at the low end–than the hardware manufacturer does. Microsoft may not make the hardware, but they still make money when a PC goes out the door bundled with Windows.

  6. Andrzej Says:

    Which is why I am migrating the bulk of my machines to Ubuntu. Ubuntu is cheaper than all of them.

    Long live open source!

  7. John Says:

    Having both Macs and Windows machines I have to say that I totally agree with Elliotte.

    I have upgraded my 3 iMacs to Snow Leopard. My Windows machines are on a mixture of XP and Vista and probably won’t get upgraded until I get new machines. I don’t really need new machines anymore, the ones I have are now fast enough for anything I throw at them. In the past I upgraded every 18 months or so and got latest OS versions included.

Leave a Reply