Robert McLaws: Windows Edition

Blogging about Windows since before Vista became a bad word

Microsoft and Customers: The Story Behind The Family Discount

Think that Microsoft doesn't listen to customers? The Windows Vista Family Discount proves otherwise. Here's how it came to be.

Last year, I ranted several times about the price of Windows and how it becomes extraordinarily difficult for multiple-PC families to upgrade all of their computers to the next version. I didn't talk about it at the time, but the reason I was so upset about it is because last year I was briefed about pricing plans for Vista, along with other Windows Featured Community leaders. When we told Microsoft reps that Vista was going to be too expensive for families, we were told we didn't know what we were talking about. Having never really been blown off by Microsoft like that before, I made it my own personal mission to inform the powers that Microsoft be that multiple PC pricing was a problem.

After getting an extremely positive response from my posts, I felt the need to take further action. I was initially going to set up an online petition, but as I was wrapping all of that up, I received an invitation to interview Jim Allchin in Redmond. I figured it would be better to pursue it privately than publicly shame Microsoft into doing it.

So last August I traveled to Redmond to interview Jim Allchin. After our fantastic on-air discussion, I brought up the need for specific family pricing. I told him that he had won, and most families have more than one computer. I also explained that Windows pricing turns families into unintentional pirates, and that households would delay moving to Vista because of the pricing combined with the reinforced WGA system. I pitched him on the idea that Windows Anytime Upgrade could dole out new keys at $50 a pop. Finally, I told him about the need to position Vista against Mac OS X, which offers a five license Family Pack for $199 (the first time in my history that I've ever linked to Apple.com... and the last).

He said he'd look into it, thanked me, and then walked out of the room. The next day I stayed on campus for the Vista TechBeta Tour, and I was shocked to find out that he was the keynote speaker. During the Q&A session, out of nowhere he asked the crowd of devoted testers, "Do you think there should be a Family Pack for Windows?" After a few seconds of stunned silence, the testers all agreed, nearly in unison. Jim responded "I think I'm going to look into a Family Pack for Vista", to thunderous applause and my own personal satisfaction.

That was the last I heard about it. Then last weekend before CES, the Featured Community leaders were briefed by the same person who briefed us on pricing at the previous Lab. This time, he had very good news, and we were the first people outside Microsoft to get the details on the Family plan (which turned out to be almost exactly what I pitched to Jim). When I asked him privately afterwards if Jim had anything to do with it, he told me that Jim was one of the only people with the authority to make the change.

So Microsoft does, in fact, listen to their customers... Windows Vista itself is a huge testament to that. Sometimes, you just have to talk to the right people to make change happen.

Speaking of the Family Discount, I've heard a lot of talk today about how Vista pricing is too high. I'm prepping a series of posts that dissects the real cost of Windows over the last two decades. It may change your mind about how expensive it is.

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Comments

  • jcool said:

    Well, it's great that they realize this, and I understand that they have some market pressure, but they way they have the family pack set up is pretty convoluted.

    They should have just done what Apple did. Retail box, 5 licenses of Home Premium, $199. End of story.

    None of this, Buy "Retail" Windows Ultimate, then you can get two licenses of Home Premium, and only through June.

    So the "Family Pack" really costs $350 or so, with 3 copies of the latest Windows OS (2-watered down versions), vs $199 for 5 copies of the latest Apple OS, full versions.

    While I know OS X doesn't have a few of the Windows apps, it still looks like a mediocre deal in comparison.

    January 18, 2007 9:26 PM
  • bluvg said:

    Kudos to you, man. ;)  That is a pretty awesome story to have in your life's collection!  

    I'm still just jealous that you got to meet Allchin.  Between him and Dave Cutler, they are the two Microsoft folks I most want to meet.

    January 19, 2007 1:35 AM
  • anonymous said:

    "While I know OS X doesn't have a few of the Windows apps, it still looks like a mediocre deal in comparison."

    I feel it's Windows which doesn't have OS X's power apps...all Windows apps are dumbed-down accessories. No full-featured prog so you HAVE to find a full-featured alternative to each app. If they cannot bundle it, cant they simply keep it for download? MS doesn't bother to update the small tools and utilities like calculator, clipboard viewer, command prompt, wordpad, disk cleanup, system information, narrator, registry editor....the old color choosing common dialog is the SAME since Windows 95? Windows is for enterprises and business users yet it doesn't have central password and certificate management....it's architecture for 3rd party multimedia codecs and formats is broken...you cannot record over uncompressed audio over 2 GB in wave format....cannot capture uncompressed video over 2 GB....and Vista is supposed to be a modern OS right?

    My point is it should be cheaper.

    January 19, 2007 3:20 AM
  • Massif said:

    Now if only you could persuade everyone in charge of international pricing to use the same model we can go home happy.

    January 19, 2007 4:18 AM
  • January 19, 2007 4:21 AM
  • January 19, 2007 6:53 AM
  • bluvg said:

    anonymous: "Windows is for enterprises and business users yet it doesn't have central password and certificate management....it's architecture for 3rd party multimedia codecs and formats is broken...you cannot record over uncompressed audio over 2 GB in wave format....cannot capture uncompressed video over 2 GB....and Vista is supposed to be a modern OS right?"

    Um, you're joking, right?  So you've never heard of Active Directory, and you're still using FAT for your filesystem or something???  Let me show you my collection of gigantic, uncompressed video and audio files. ;)  

    January 19, 2007 10:04 AM
  • January 19, 2007 10:05 AM
  • Geoff Coupe said:

    Well, whoop-dee-doo. The fine print says that the Family Discount only applies to the US and Canada. So the rest of us can continue to pay full whack. And in Europe, that means already a 95% markup over US prices. Forgive me if I remain unimpressed by the extent to which Microsoft can be said to listen to its customers.

    January 19, 2007 10:13 AM
  • anonymous said:

    Active Directory requires a domain, it's of no use to a standalone workstation, and at least when I record audio in an app like Adobe Audition or capture video in Movie Maker from my DV camera, the files are split at intervals of 2 GB. R u sure ur collection contains UNCOMPRESSED audio/video? Normally, ppl dont store media UNCOMPRESSED.

    January 19, 2007 12:32 PM
  • bluvg said:

    anonymous: regarding Active Directory, you were talking about enterprises/businesses, which are Active Directory's target.  

    I'm not sure why they are splitting the files at 2 GB, unless perhaps you're using FAT as your filesystem or if there is a limitation in the file format itself.  I would consult the help files/support sites for those applications.  I routinely capture video in uncompressed format from DVDs and VHS tapes (private recordings, not commercial) and later compress it, so the collection at any one time is a dynamic one, rather than the permanent format for storage.  Nonetheless, I can assure you that the files can be plenty large.  The NTFS max file size limit is 16 exabytes.

    January 19, 2007 5:33 PM
  • Dave M. said:

    So, first, if I'm going to upgrade 5 Windows boxes, I'm going to be paying over $600. 2 Vista Ultimate upgrades and 3 Vista Home Premium upgrades. Yet, when I update 5 OS X boxes, I'm only paying $200. I suppose the $600 is better than the $770 I would be paying for 5 Vista Home Premium Updates, but still... Apple has a way better deal going.

    Also, you say that Microsoft listens to it's customers. I suspect that it requires finding a high ranking person in Microsoft in order to have them listen. I can't imaging calling Microsoft on the phone or emailing them with such a suggestion would get a similar response. It's good you got Microsoft to start thinking about households with multiple computers. Microsoft's pricing has been way over the top for their OS's. It's time to bring them down to a more reasonable level.

    January 21, 2007 4:33 PM
  • bluvg said:

    I don't know if Apple has the better deal all-around.  Maybe the up-front cost for Windows is higher--although not if you buy OEM licenses, as the majority of folks do--but at least you don't have to pay what amounts to a yearly OS X subscription fee.  But I agree, this move was sorely needed, and a big thank you goes out to Robert for pounding the drum on this one.

    January 23, 2007 12:24 AM
  • Dave M. said:

    Yes, a family plan was "sorely" needed. It still is in my book. Just imagine a person bought 5 Macs and 5 WinTel boxes just a year ago. The cost of upgrading those systems to their latest OS's is a huge difference still. $200 (Mac) vrs. $770 (Windows). There is no "OS X Subscription" there. They didn't have the Mac's long enough to have updated at all. Leopard would be their first update.

    So, are you saying that we are not going to see another Windows OS for 5 more years? Personally, I would prefer shorter update cycles myself. I would suspect that Microsoft would also prefer that considering the money they must have lost with the development of Vista. I wonder if they will make that expense up in sales?

    So let's take a look at this "subscription" model you refer to.

    Let's say I bought 5 Macs and 5 WinTel machines back in 2001. All 5 Mac's came with OS X 10.0, and all WinTel machines came with WinXP.

    Now we spin forward to today. I have upgraded XP twice with SP1 and SP2. Both free updates, but nothing new really added until SP2 and only due to huge holes in security. Oh, and we shouldn't forget one of the reasons for SP2 was to turn on the Windows Firewall by default which should have been turned on by default to begin with.

    With the Macs, I have seen 4 OS updates each at $200 based on the Family Plan. I am assuming that the Family Plan was around before OS X was released. I don't remember now since I only just recently switched to the Mac. So, 4 updates makes $800 over the last 6-7 years.

    So, so far, Microsoft is winning here with $0 and $800 for the Mac.

    However, now things get interesting.

    On the WinTel side, Vista arrives. I need to spend $770 for my 5 systems. Even thought I don't need Media Center, I'm paying for it by having to buy Windows Ultimate to try to save a few bucks on 3 other licenses. I don't agree with you that I should be buying OEM versions. First, I'm not a company, I'm a household. I suspect that if I were to try to get support for Vista, the OEM thing would be a problem. Plus, if everyone should be buying the OEM version, why is Microsoft selling Vista for non-OEM prices?

    On the Mac side, Leopard arrives and I purchase 5 updates for the same $200. So now I have paid $1,000 to WinTel's $770. That's a pretty substantial difference. However, in the 6-7 years I have been buying those upgrades, I have seen huge improvements in the OS:

    10.1 - iTunes (This version really didn't add much, I'll admit)

    10.2 - Quartz Extreme, Address Book, Rendezvous, iChat, new Finder, Journaled file system

    10.3 - Finder improvements including real-time searching like in iTunes (precursor to Spotlight), Fast User Switching, Exposé, Fax - Zip - X11 support built-in, TextEdit, FileVault, Xcode, iChat AV, Core Audio, Core Units

    10.4 - Spotlight, iChat AV (improved), Safari improvement, Mail improvement, Dashboard, Automator, Dictionary/Thesaurus, 64-bit architecture, Xcode update, Grapher (graphing calculator), Quartz Composer, AU Lab

    10.5 - Full 64-bit support, Time Machine, Front Row and Photo Booth included, Spaces (Virtual Desktops), Core Animation, Dashcode, Improvements to Mail, Dashboard, iChat, Parental controls, Xcode

    To be fair, Windows has produced a 64-bit version (was that free to users of the 32 bit version?), a Media Center Edition that was only available to folks who bought Media Center PC's, A Tablet PC Edition.

    Since XP was released, it's updates gave users:

    XP-SP1 - USB 2.0 support, Set Program Access and Defaults utility, the removal of Microsoft's Java Virtual Machine, LBA-48 which allowed the OS to access HDD space 137GB's, and native support for Serial ATA.

    XP-SP2 - Enhanced Firewall, Popup blocker for IE, Bluetooth support, Firewall on by default, Advanced memory protection, removal of Raw Socket, Windows Security Center, Windows Movie Maker 2

    XP-SP3 - There is an SP3 slated for release in the first half of 2008.

    Then Vista:

    Well, there are a lot of improvements here. Most significantly: Aero, DRM, User Account Control (that nasty are you sure dialog that pops up when you sneeze :) ), It' lacks a new file system that was planned, "Next-Generation Secure Computing Base was also let go, plus some smaller others.

    So, OK, OS X cost me $1,000, but I think I got my money's worth and it was spread over a 6-7 year time frame. Vista costs me $230 less, but I'm having to take out a loan to pay for it all at once instead of spread over 6-7 years.

    This isn't an entirely fair comparison, since during that 6-7 year time frame, I would be upgrading computers at least twice so I would be getting some OS X's for free, and Windows XP's for free... which they were anyway. Plus, we are not even taking into account all the time Windows users have to spend dealing with Viruses, spyware and malware.

    January 24, 2007 6:00 AM
  • bluvg said:

    (Hmmm... I posted this comment already, but it seems it was munched... or perhaps still awaiting approval?  I'll try posting it again.)

    Most people ARE buying OEM, because they are buying Windows with a PC, so I think the point is a valid one.  OEM has nothing to do with being a company vs. an individual.  The big substantive difference between OEM and retail licenses is that OEM licenses are not transferable, whereas retail licenses are.  If you want the OEM discount, it's open to anyone--just buy through a place like NewEgg.com with a piece of hardware, say more RAM.

    As far as malware is concerned, I haven't had one instance personally (and I don't use AV at home)--or at my company, where I direct IT--because we don't use admin accounts.  That Microsoft didn't put any teeth behind rooting out the admin-mode mentality--from which both they and the rest of the industry didn't have the guts to depart--is something for which I fault them, certainly.  But, put XP on a level playing field with OS X by running both not as admin/root, and the security picture is very similar.

    I don't think you're giving Vista a fair shake at all as far as advances, nor are you to XP (at lot of the improvements came not with the service packs, but with free downloads like PhotoStory, Windows Media Player, peer-to-peer networking pack, MSN/Live Messenger, IE 7, etc.).  Leopard will (hopefully) just be getting somewhere near where Vista is at in terms of the graphics subsystems, for instance (not that the composition engines are directly comparable--they are not--but in terms of broad functionality groups, Quartz 2D Extreme is buggy at best in Tiger and is turned off by default).  We could list back-and-forth all the features of the 2 OSes (and here are a few more for Vista: new, best-of-breed networking stack; new low-level audio APIs for pro-audio and a new audio stack in general; new printing subsystem; ReadyBoost/Superfetch/ReadyDrive; IO cancellation; transactional filesystem; on and on and on...), but it's kind of pointless.  I could make fun of OS X's "64-bit support" in Tiger, and you could make fun of Vista's "improved version of Paint," but the debate would never end.  They both have a lot of improvements, whether it was a large leap or an evolution over time.  I agree, though--I prefer the evolution to the large leap as well.  I don't think it was Microsoft's original intention for it to be that way, but it is what it is.

    At any rate, I think XP has been an outstanding value, particularly if you bought it in 2001.  It will be supported through 2014.  That's pretty amazing when you think about it--for around $100 in 2001 (and that's retail upgrade cost, not OEM), you could be covered with one OS for 13 years.  You're lucky if the hardware will last that long (the hard drive, at least).  I think there may be a few scenarios in which OS X might be less expensive, but on the whole, I think the raw OS cost argument leans much more often in favor of Windows.  For most folks buying a Mac, though, I would bet that is most likely not a consideration.

    January 25, 2007 10:19 AM
  • Dave M. said:

    As far as OEM. From what I have read, it's not so much that it's non-transferable (which it is... non-transferable), but it's tied to the motherboard it's installed into. That said, I'm wondering how it would handle virtualization. Since Vista Ultimate would be installed on a "virtual" computer, does it still see the Mac motherboard?

    Oh, another very important point of OEM versions. They can not be returned, at all, period.

    I personally, haven't had any instances of malware/spyware/adware/viruses on my Windows based systems. I don't run AV software, and the only protection I have is a router and brains, and Firefox.

    My parents, on the other hand, are a different story. I should have had them on a router years ago, but I didn't think much of it at the time. They got a really nasty set of malware on their old Windows box that required a reinstall of Windows to clean out. I set them up with Firefox and made it the default browser as I have on my systems. However, there are a few nasty Windows programs that don't honor the default browser setting and launch Internet Explorer anyway. My parents don't know from either browser, so when this happened, they didn't notice it and surfed to a site that installed the malware.

    I personally know how easy it is to get this strain of malware since I accidentally did the same thing while I was working in Parallels with WinXP on my Mac. Fortunately, I was able to simply reinstall without concern.

    Not knowing a whole lot about the inner workings of Vista and OS X, that stuff isn't seen by the user. As a developer, I'm told over and over again, get as much "outside changes" made as you can before working on the code that the user doesn't see the results of the changes. Vista may be ahead of OS X on internal subsystems, but the user doesn't see those features, they see external features. Spotlight, Exposé, etc... In that sense, Vista has finally caught up to OS X only to have Leopard leapfrog them again in just a few months. If Leopard fixes things internally that you say they are catching up on, I would say Leopard will be jumping way ahead then.

    As far as 64-bit goes. Tell me, how many Apps for Windows are 64-bit? So, I would suggest that 64-bit is pretty much mediocre on both sides of the fence.

    As far as XP being an outstanding value, sure if the person using XP is like you or I. However, the majority of XP users (minus business users) are average users that don't have a clue what a computer is. For those folks, I would say that XP has been a rip-off when you consider that they have to hire tech-heads to "clean-out" their computers ever 6 months.

    XP Home being supported til 2014? Last I heard it was 2008. It was supposed to run out Oct. 2006. As far as amazing? Support a product til at least there is a new product to replace it? This according to Microsoft's website:

    Windows XP Home - Jan. 2009 (http://support.microsoft.com/lifecycle/?p1=3221)

    Windows XP Professional - Mainstream support - Jan. 2009 / Extended support - Jan. 2012 (http://support.microsoft.com/lifecycle/?p1=3223)

    I'm sorry, I'm not giving kodo's for Microsoft following their own policies! Sorry, I don't care how long they "have" to support their OS just because it took them 5-6 years to release a new OS. Sheesh!

    As far as the hardware running as long as the OS. I can't say I would want to, but I suspect that if a user bought a Mac back in 2001 with OS X, assuming their HD is still running, they could still be running OS X 10.0. As I said, I personally would not want to, but I suspect it's possible.

    I think we both agree, this is all moot since people tend to upgrade computers every 2 years or so. So, they don't pay for the OS upgrades they are getting (other than what Apple/PC manufacturer) adds to the cost of a system due to the OS.

    February 2, 2007 9:01 AM
  • Dave M. said:

    Also, as far as 64-bit goes...

    http://www.theinquirer.net/default.aspx?article=36938

    They basically say that 64-bit drivers are hard to come by and when they are present, they are shoddy at best.

    I'll stick to Leopard and Tiger, even half a 64-bit OS is better than none, or at least one that can't use any of it's peripherals.

    February 4, 2007 4:31 PM
  • Dave, If you're using the INQ as you're source, then it's no wonder you're info isn't necessarily accurate. For devices to be Vista certified, they must have 32-bit and 64-bit drivers. There are over 30,000 drivers up on Windows Update, many of which are 64-bit as well. And while it is true that some peripherals won't have 64-bit drivers for a couple months, I've been running 64-bit for quite a while now without incident.

    But at any rate, good luck with your surgery, and we'll see you back here in a couple weeks.

    February 4, 2007 5:17 PM
  • Dave M. said:

    Robert, I don't have any reason to disbelieve what INQ has to say since they don't seem to be affiliated with either Apple or Microsoft.

    Not all my info comes from the INQ, I just see them either through Digg.com or other blogs I read. I do read Windows blogs as well as Mac blogs.

    As to the 64-bit, what advantage does that really give you other than a faster OS experience? I mean, how many apps are 64-bit. Is Office 2007 64-bit for instance? That would be helpful I suspect.

    The thing about OS X is that there isn't a reason to worry about which bit level to run. There is just one, the one the OS uses.

    If there are no issues with Windows and 64-bit, then why are they releasing both 32-bit and 64-bit?

    Thanks for your kind words on my surgery. I'm posting now (1am my time) since I can't sleep. I suspect, I won't be able to sleep tonight. First time I've been under the knife as an adult. Not really looking forward to it, but at least I'll be able to leave the hospital the next day if my pain level are low enough. Then a month of wearing a neck brace. Yuck!

    I'm just grateful that I'll be getting this over with. I've been on medical leave now for just over 4 months and it will be 5 months before I return assuming that my recovery goes smoothly.

    Also, thanks for being understanding about my comments. I admit that I really don't know all that much about Vista. However, commenting like this with people who do, land me with a lot of new info that I didn't know.

    I'll never leave the Windows platform since I am a hardcore gamer and really can't play all the games I want to on my Macs. However, I am so much more happier now that I don't have all the viruses and spyware to worry about. (At least for now :) )

    February 5, 2007 1:05 AM