Microsoft revealed Software Assurance deals this week for both XP and Vista shops migrating up to Windows 7. It seems enterprises already on Vista won't get an extra break, and everyone is on the hook for additional hardware costs.
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Microsoft's enterprise customers can buy Windows 7 Professional through volume licensing partners starting September 1. The software company will let partners offer a six-month promotion of 15% or more off the price of the Windows 7 Professional upgrade, the company said at its Worldwide Partner Conference in New Orleans this week.
Any customer with a qualifying PC operating system, such as Windows Vista Business or Windows XP Professional, is eligible regardless of when it was purchased – which means Vista shops won't get more of a price break than XP users.
Paul DeGroot, an analyst at Directions on Microsoft, a Kirkland, Wash.-based consulting firm, said he doubts Microsoft will lower their pricing for Vista users. "Vista has been problematic, and the majority of business customers have not deployed it …[looking at Microsoft's history]. The chances they will do something for Vista customers is very slim."
As previously reported by Microsoft, enterprise customers with Software Assurance (SA) on existing Windows licenses automatically get the rights to deploy Windows 7 Enterprise to PCs in their environments.
On Microsoft's incentives page, there are some upgrade deals attached to the Software Assurance program that provide training, support and services for an additional fee. SA lets users move from Standard Edition to Enterprise Edition without having to purchase a new license. One offer states that if you attach Software Assurance to a PC purchased with Vista after April 2009, you receive 15% off the price and gain the rights to Windows 7 when it is released. The offer is redeemable through August 31, 2009.
While Microsoft corrals users into the SA program, DeGroot said IT shops need to be sure SA makes economic sense.
"If you buy SA, it costs you 29% of the cost of the license per year. So if you buy it in a volume agreement, which runs for three years, you end up paying 87% of the full license price, which is only a 13 % discount," he said. "Now, [Microsoft] is offering a 15% discount. So, it strikes me that Microsoft had better do something more for the people who have already paid 87% of their Vista license to make it worthwhile to buy SA on Windows 7."
DeGroot suggested checking Microsoft product lists' promotions section for savings.
Hardware costs affect Windows 7 adoption
While SA customers get promotional deals for upgrading to Windows 7, it won't help them get a bargain on the necessary hardware upgrades.
The hardware requirements for moving from the eight-year-old XP to Windows 7 is significantly different in terms of memory capacity, CPU power and space. Vista users will need to add memory and disk space for Windows 7.
Though Microsoft doesn't recommend additional CPU power when upgrading to Windows 7, it is probably a good idea. For example, Paul Braga, an IT consultant at Image Quotient, in Novato, Calif., recently upgraded from Vista to Windows 7 RC build 7100. He said he had "issues with runaway applications pegging the CPU," so he needs to buy more powerful hardware.
"I'm going to build another system with a more powerful processor, [since] the present one has a single-core 64-bit Athlon 3200 and 2 GB of RAM, which might not be enough," he said.
Hardware minimum requirements for Windows 7 are as follows: 2 GB of RAM, at least 1 GHz of processing power and 20 GB of available disk space. This compares to XP hardware requirements of just 128 MB of RAM, 233 MHz processor and 1.5 GB of available disk space. Vista requirements are closer to Windows 7 -- at least a 1 GHz processor, 1 GB of system memory and at least 15 GB of available space.
Most Windows users will probably just wait to upgrade to Windows 7 until their normal hardware lifecycle ends. One IT director at a major medical insurance company in New Brunswick, Canada, said he will start installing Windows 7 and Windows Server 2008 in mid-2010 or early 2011, when his company would normally refresh its hardware. Like many companies, it skipped Vista and will upgrade from XP.
"For about 1,800 desktops, the total Microsoft cost is around $1.3 million," the IT director said. "This includes Office 2010, many CALs [client access licenses], a move to Software Assurance and so on. The hardware cost [desktop] is part of our normal life cycle, so I don't see this as a factor, as we would do it anyway."
Let us know what you think about the story; email Bridget Botelho, News Writer.