ACT I: MegaTech Solutions, Inc.
The scene opens at MegaTech Solutions, a local reseller of Microsoft Windows- and Vista-compatible computers and software, including the Windows and Vista OSes. Join us now as we listen in on a conversation between a customer and a MegaTech salesperson…
“Hi, and thank you for visiting MegaTech today; how may I help you?”
Hi. I’m interested in upgrading my home PCs to Windows Vista.
“Ah, an excellent decision. Which version of Vista do you want?”
What do you mean, which version? I just want Vista.
“Well, Microsoft has created a number of different versions of Vista, so you can get the system that exactly matches your needs. After answering a few questions, I’ll be able to recommend the perfect version for you.”
That sounds great; thanks!
“Now, tell me, what version of Windows do you have on your computers?”
I’m running Windows XP on one of them, and Windows 98 on the other two.
“That means you can buy one Vista upgrade for your XP machine, but you’ll need two additional full copies of Vista for the other two. Windows 98 machines aren’t eligible for upgrade pricing.”
OK, I guess I understand that. So I’ll buy two full copies and one upgrade. How much do I owe you?
“I’m afraid I didn’t make myself clear—we’ve only just figured out what kind of Vista purchase you’re eligible for; we haven’t yet figured out exactly which Vista version you should purchase. Although there are technically eight different versions of…”
“Yes, eight—Windows Vista comes in Starter, Home Basic, Home Basic N, Home Premium, Business, Business N, Enterprise, and Ultimate editions.”
Wow. That’s a lot of choices.
“Don’t worry; it’s not as bad as it seems. Starter is a region-limited offering, the two ‘N’ versions are only available in Europe, and the Enterprise edition is only available to large site-licensing customers. So really, you only have to choose among four options.”
Well, that’s an easier choice than eight, at least.
“OK, so on to how you use your computers…”
I’ve got fairly simple needs, so perhaps Home Basic is what I’m after?
“No, you don’t want that! I forgot to talk about Home Basic. You see, Microsoft has left out so many of the nicer features of Vista in Home Basic that there’s not any good reason to purchase it. For instance, you know that nice-looking Windows Aero user interface? It’s not in Home Basic. Really, you’ll be happier staying on XP than you will ‘upgrading’ to Home Basic. So in reality, there are only three options to discuss: Home Premium, Business, and Ultimate. Now, back to how you use your machines. Do you want the ability to implement parental controls for your kids?”
Yes, that’s quite important!
“OK, then that takes Vista Business out of the picture—it doesn’t include parental control features. So now we just have to choose between Home Premium and Ultimate. Do you want your machines to include fax and scan capabilities, or do you want to possibly encrypt your hard drive, login remotely to your home machine via the GUI, or run a local web server?”
Wow, that’s a lot to think about. Well, I would like to experiment with hosting some family-related Web pages some day, and I do keep a lot of financial data on the machines, so perhaps Web serving and encryption options would be good to have.
“OK, perfect—that settles it! You’ll need Windows Vista Ultimate, as that’s the only version that includes all of the features you need. See, that wasn’t too hard, was it? We just had to figure out your needs, and now you’ll be able to leave with the version of Vista that exactly matches your requirements.”
Excellent—so how much do I owe you?
“Well, let’s see—we price match with newegg.com, so as of today, that’s $378.99 each for the two full versions of Ultimate, and $249.99 for the upgrade, for a total of $1,007.97.”
Ouch! That’s like $336 per machine! Well, it is the Ultimate Windows, right? Good thing Microsoft only upgrades their OS every five years or so!
ACT II: The Apple Store at Three Streams Crossing
This act opens at the local Apple dealer, where we’re listening in on a conversation between the Apple Store’s sales representative and a customer…
“Hi, and thank you for visiting The Apple Store today; how may I help you?”
Hi. I’d like to upgrade my home Macs to the latest version of OS X.
“That would be OS X v10.4 Tiger, and I can help you with that. First, though, I need to ask you one question: You’re not using these machines as professional-grade file servers and/or Web servers, right? They’re not being used to power a Web 2.0 company from your basement or anything, are they?”
No, not at all. I’m just your typical home user with a few machines in the house. We’ve got a PowerMac G5, an iMac, and a PowerBook shared amongst the four of us. Web surfing, emailing, printing, that kind of thing.
“Perfect. That means you don’t need OS X Server, just the standard OS X v10.4. And with three machines, you’ll want the five-license OS X Family Pack, which is $199.”
Why wouldn’t I just buy three copies of OS X?
“Well, at $129 a copy for OS X, if you need more than one in your home, you save money with the Family Pack. The Family Pack lets you install OS X on up to five machines within the same household, including students who may presently be living away on campus.”
Wow, that’s a great deal—that’s about $66 per machine. Thanks!
Simple doesn’t mean bad
Hopefully by now it’s obvious that there are many more versions of Vista than there are of OS X—eight really is the number, according to this article on Paul Thurrott’s SuperSite for Windows (which is what I used for the feature comparisons in Act I). And that’s eight versions without even considering Windows Vista Server, aka Longhorn, which just recently entered beta. Who knows how many versions that will have upon release. (I don’t think we’ll see a Vista Home Server Basic, though!) The reality is that there are more than eight versions—some (or maybe all, I’m not sure) of those eight versions are available as either upgrades or full retail packages. So that’s potentially 16 different versions of Vista for the consumer to choose between. Yikes!
As noted above, a lot of those are “special” versions that you won’t run into in the normal computer reseller. So we’re left with four versions, each available as an upgrade or standalone purchase. That’s still eight different choices to consider.
Contrast that with OS X, which has a total of four versions—but that includes OS X Server. Really, there’s just one consumer version of OS X, available for either one user or five users. That’s it. No upgrade pricing. No different feature sets for home users and business users and ‘power’ users. No stripped-down starter version for really basic home users. No Ultimate King of the Hill edition with foil wrapping paper, titanium DVDs, a signed letter from Steve Jobs, and added profit margin for the parent company—all just to gain features that should have been there in the first place! Just OS X, for either one or five users.
As a company, Apple seems to understand better than most that simplicity sells. Instead of coming up with a contrived upgrade price, it just makes the price of the end product reasonable enough that there’s no need for upgrade pricing—this is true not just for OS X, but also iWork, iLife, and so on. Instead of creating versions of OS X that remove features while dropping the price, the company lets everyone have everything at a fair price, and then the users can decide which features they will and will not put to use. This is not only easier for the consumer, but it’s easier ( much easier) for Apple. It only needs to build a couple of versions of OS X. It only needs to stock a couple versions of OS X. It only needs to create two types of boxes.
It’s also easier for resellers—they don’t need to stock and manage eight different inventory items, each of which requires warehouse space, inventory management, and shelf space. They also don’t have to train their sales reps on the various versions of the system, nor offer “upsell” incentives to promote sales of the higher-priced versions. Instead, the reps just need to understand one version of OS X with two price points (again, excluding OS X Server). From top to bottom, Apple’s focus on simplicity helps the company, its resellers, and the consumer.
Microsoft’s licensing scheme for Vista, on the other hand, is overly complex with no benefit for the end user. Sure, the consumer can lower their cost of ownership of Vista, but only by giving up on features that they either need or find compelling. Even then, Vista’s no bargain. Vista Home Basic, which Paul Thurrott and our mythical salesperson at MegaTech both strongly recommend against, sells (on newegg.com) for $170 (although you can upgrade for $94). The much more capable Home Premium is $220 for the full version, and $150 for the upgrade—the full (one user) version of Home Premium sets you back $20 more than does a five-user Family Pack of OS X!
Speaking of Family Packs, Microsoft does—sort of—offer a multi-machine discount. However, as detailed here, it’s a limited time offer (it expires June 30), and only those who purchase Vista Ultimate are eligible. If you do purchase Ultimate, you can spend another $49.95 to license up to two more machines. While that sounds pretty good, there’s one big problem that I see: you don’t get two more licenses for Vista Ultimate! Instead, you get Home Premium. So now your three machines will be running two different versions of Vista, and only one machine will have all of Vista’s bells and whistles. In my family, I know this would be a recipe for a support nightmare: Remember, if you want to fax or store encrypted files, you need to use that machine in the corner. These other two can’t do those things. The time limit is obviously intended to force an early upgrade to Vista—so if you’re the type who likes to wait a bit before upgrading, you’re punished by being forced to pay full price for all of your Vista licenses. Microsoft just doesn’t seem interested in offering a simple and cost-effective solution for its customers who wish to upgrade multiple machines to Vista.
The licensing of Vista is even more cumbersome than I’ve detailed here. If, like some Intel Mac OS X users, you intend to run Vista in a virtual environment (i.e. under Parallels Desktop or Fusion), you need to know that Microsoft’s license forbids you from using Vista Home Basic or Home Premium. This restriction is not for any technical reasons, as Chris Breen demonstrated. In my opinion, and despite what Microsoft’s PR folks say, licensing restrictions such as this one exist for one reason, and one reason only: to drive more money into Microsoft’s pockets. If the product runs in a virtual environment, then let me use it that way, regardless of which version I’ve purchased. If you’re afraid of support costs, then fine, exclude support for Vista when run in virtual environments. But don’t tell me I have to spend more money to earn the right to use your product as I wish, when it already does what I want it to do.
I believe Microsoft could easily have pared down the number of Vista versions without losing any revenue: just keep things as they were with Windows XP, which came (basically) in Home and Professional versions. I’m still against paring out features to create fictitious product differentiation, but if Microsoft feels it has to do so, I see no reason to overly complicate things with four different versions. By offering just two versions, Microsoft would lose a bit of money from the potential Ultimate purchasers, but it would make up for that from those who might otherwise consider one of the stripped-down versions. The company would also greatly lower many other expenses—packaging design, inventory management, etc. But the point is moot—Microsoft did its analysis, and felt it best to unleash a swarm of Vista versions into the wild. Obviously, I think its decision-making was flawed.
When I first saw a chart showing the many different Vista versions, I thought it must be some sort of mistake. After all, it was people within Microsoft who produced the now-infamous Microsoft designs the iPod package video, which was created to remind Microsoft of what not to do when designing a consumer product. Starting with a clean, elegant iPod box, the video demonstrates how easy it is to completely obscure a well-delivered message by adding too many needless details. And that video was produced long before Vista was even close to release. Based on the number of Vista versions available, though, I can only reach this conclusion: the video never made it outside the Zune design and marketing teams within Microsoft, and Microsoft employees don’t have access to YouTube. If either of those things weren’t true, I think we would have a simpler selection of Vista versions.
While we’re still five or so months away from the release of OS X 10.5 (aka Leopard), I have a high level of confidence that we’ll see a versioning plan that basically matches what we have with OS X 10.4 today—a simple plan with reasonably-priced single and multiple user options.