Windows Vista pricing favors PC upgrades

Microsoft has published pricing for Windows Vista - and things are looking up for PC manufacturers hoping consumers will start buying shiny new Vista-ready computers.

Microsoft will charge $199 for Windows Vista Home Basic, or $99.95 to upgrade, with prices topping out at $399 for Vista Ultimate, or $259 to upgrade.

Between these two extremes lies Vista Business priced at $299, or $199 to upgrade, and Vista Home Premium at $239, or $159. Vista Enterprise is only available to large organizations from OEMs, so there is no recommend retail pricing.

While Microsoft's entry-level and upgrade prices might appear reasonable on paper to some, and little changed to the five-year-old Windows XP, there are a few clouds to this sliver lining. The first is the ability for machines running Windows XP to actually be able to run Windows Vista, as Microsoft's hardware guidance for new versions of Windows has tended historically towards the, ah, optimistic shall we say.

Microsoft's guidance kicks in at an 800MHz processor, 512MB of memory and a 20Gb hard drive. With at least three versions of Vista for consumers to pick, though, there is the apples and oranges trap to avoid.

Overall Microsoft is introducing five editions of Windows Vista, whose level of functionality - unsurprisingly - increases as the customer pays more.

For consumers, Vista Home Basic does exactly what it says on the box - you get the an OS, browser, search and parental controls but no sexy Aero interface and no Windows Media Center (for watching and recording all those episodes of CSI: Miami, hooking up the Xbox 360, and viewing photos). Those little gems are reserved for users of Vista Home Premium, while Ultimate gives you all this plus additional power features from the business products like BitLocker encryption, support for domain group policy, and advanced and simplified networking.

This makes the act of picking which version of Windows Vista to move to, from the simple world of Windows XP Home and Windows XP Professional, just that little bit harder.

With Vista Home Basic living up to its name customers will likely tend towards Vista Home Premium or Vista Ultimate, making Microsoft's minimum hardware guidance further out of touch with reality and likely to see consumers getting their new copies of Windows Vista loaded on a new PC with beefier specs (3GHz processor, 1Gb of memory and 40Gb hard drive - a basic minimum by today's standards.)

The pressure is therefore on Microsoft to put the hard sell on Vista to convince consumers to buy a new machine. Jupiter Research reckons 52 per cent of American households own at least one PC, leaving plenty of room for a second. Microsoft faces an uphill task, though, as Vista is due in January, when wallets will be lighter in the wake of the Holiday spending frenzy.

Worse, at this stage at least Microsoft doesn't appear to be doing much to encourage uptake beyond offering consumers the blandly appetizing equivalent of Diet Coke for Windows that is Vista Home Basic. Missing is any Apple-style family pack, which gives five additional licenses for OS X Tiger at $199, that would help seed the market.

Instead, it seems, Microsoft is trying to seed the market with developers: five million to be precise, which Microsoft said is its goal for those testing Windows Vista Release Candidate One.®