Windows 8: the price is FIGHT!

Meet the new boss, considerably cheaper than the old boss

Windows 8

Microsoft has good news and bad news for Windows 8 fans. The good news? Upgrading will cost you a pittance. The bad news? You'll only be able to do it for a few months.

That's the official story, anyway: if you're running Windows 7, Windows Vista or Windows XP on your PC you'll be able to upgrade to Windows 8 Pro for just $39.99, which is about £25. You'll also be able to get Media Center as a free download.

Even if you don't fancy Windows 8, the deal is good news: as AnandTech points out, Windows 8 Pro comes with downgrade rights, so you'll be able to buy the Windows 8 cheapie and install Windows 7 instead, perfectly legally.

It's a serious kick in the teeth for OEMs, already reeling from being battered with Microsoft's Surface tablets: super-cheap updates for existing kit can't help their chances of using the Windows 8 release to sell stacks of new PCs. Why buy a new laptop when you can make your PC feel brand new for twenty-odd quid?

So why is Microsoft doing it, and will its generosity extend to its other products?

Microsoft's magic bus

The why is the easy bit, and part of the answer begins with "A" and ends with "pple". OS X updates cost a fraction of Windows ones, and while you'll end up paying much the same over a three-year period it's the headline price that people see.

That's only part of it, though. The bigger part, I think, is that Microsoft is trying to kick-start a virtuous circle here. The more people upgrade to Windows 8, the bigger the audience for Metro apps; the bigger the audience for Metro apps, the more incentive developers will have to make them; the more Metro apps there are, the more compelling an upgrade Windows 8 will be.

That's why the deal goes back as far as Windows XP: Microsoft really, really, really wants everybody to get on board the Windows 8 bus. Don't be too shocked and stunned if, come January, Microsoft has an amazing change of heart and decides to keep the discounts going for a little bit longer.

What's interesting to me is whether the same generosity will make its way to other Microsoft products, such as OEMs' Windows RT licences - the subject of many rumours about alleged sky-high prices - or Office itself. The imminent arrival of Office on iOS and Android presents Microsoft with an interesting challenge, because with very few exceptions people generally expect tablet apps to cost considerably less than their desktop equivalents.

Will Microsoft sacrifice some of its huge profit margins for market share? It's already doing so, not just with the cut-price Windows updates but with moves such as baking a version of Office into Windows RT for free.

Windows and Office are Microsoft's two cash cows, the products whose margins must be protected at all costs. If Microsoft is willing to take a hit on those, things are about to get very interesting.

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