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No free upgrade deal for PCs with Win2k beta preinstall

Dell, for one, seems to have gone suddenly cold on the coupon idea, so you pay twice, it seems

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As PC companies prepare to sell systems with Windows 2000 beta 3 preinstalled later this month, the vagueness of the terms and conditions of the Microsoft preview deal is slowly becoming apparent. What, precisely, is it you get if you buy a beta 3 machine? The best answer we can give right now is, not a lot, apart from beta 3 and some support. Despite a widespread belief that there will be some kind of coupon-based upgrade programme to the Win2k gold code when it ships, no manufacturer as yet seems to have committed to this - in fact, the reverse. At Comdex Microsoft said that 20 PC OEMs would be shipping beta 3 on their machines, but so far only Dell has stuck its head out above the parapet to any great extent. The company will be taking orders in May for shipment in June, but appears either to be viewing the beta 3 code as "free" on machines that will actually ship with a Windows NT 4.0 licence (so you have to buy the Win2k upgrade when the gold code ships) or is charging a $70 premium for machines that include the beta 3 code (yes, we know these versions are contradictory). Quantities of cold water also seem to have been slung over the notion that Microsoft is mounting a major marketing push to get beta 3 code into the hands of as many users as possible. Microsoft spokespeople are starting to intone that it's only a beta, and obviously not for use as a day-to-day operating system, and Dell is also downplaying beta 3. One Dell rep we heard from this morning was of the opinion that most customers would wait until the full code shipped in, he reckoned, Q1 of next year. So much for that Microsoft internal target of October, and the rumoured mega-announcement for November. But if nobody has committed to upgrade coupons, how come the notion got out in the first place, and got to be so general? We even had a Microsoft UK spokesman telling us last week that the beta 3 code would, as he understood it, go out with upgrade coupons. A little digging unearths some clues. Last November, when Microsoft announced the Windows 2000 Ready Program, Dell committed to shipping beta 3, and at the time we have a certain Michael Stich, Dell OptiPlex product manager, saying that Dell "obviously" didn't want to charge customers twice, so would probably charge the NT 4.0 price for the system then ship the Win2k gold upgrade later. More recently (last week, actually), PC Week Online wrote: "According to sources, users who buy machines preloaded with the beta will receive coupons allowing them a free upgrade once Windows 2000 ships." So what's happening, and why has Dell apparently abandoned coupons since last November? Here's our take. Dell probably wouldn't have spoken about coupons then if it hadn't thought some kind of deal with Microsoft was in the offing. The general view that there would be a coupon deal, and PC Week's very recent "sources" meanwhile suggest strongly that some kind of scheme has at least been considered by Microsoft, but that it's been nixed, at least for the moment. Historically however, when Microsoft's OEM customers want to ship more than one operating system, Microsoft gets awkward about who pays the tab. The machines that shipped after the Windows 95 launch with the option of installing Windows 3.x or Windows 95, for example, caused considerable financial wrangling between MS and the OEMs before that deal happened. Some kind of deal that involved shipping machines with beta 3 preinstalled, charging for an NT 4.0 licence and then shipping an upgrade to gold code could of course be done now without obvious significant loss of revenue to Microsoft, but you can see the problem here. This is, as they're all now saying, beta software that shouldn't be used on production machines. So maybe the machines should have a production OS with them as well. But if you did this Microsoft would lose a lot of upgrade revenue. And if you went ahead and shipped machines with just beta code on a 'buy now, get production code later' basis, then probably lots of people would go for it, and you'd be criticised for being irresponsible. We suspect that if the relevant Microsoft and Dell internal documentation ever got subpoenaed it would reveal a pretty mess. Still, Microsoft can no doubt console itself with the thought that at least it will be getting $59.95 out of the beta 3 Web sales - and for all we know, it could be getting a similar number out of the OEMs too. ® See also: Could Win2k beta 3 ship a million?

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