Is A Windows 7 Upgrade Guarantee in Channel's Future?

Malaysian web site reports that Microsoft will provide VAR and OEM customers buying Vista a free guaranteed upgrade to Windows 7 under a program expected to start later this year. VARs welcome the move.

Windows 7's public beta kicked off earlier this month, and Microsoft (NASDAQ: MSFT) executives are now doing their best to keep secret their plans for rolling it out.

However, one secret that apparently has slipped out is what purports to be a draft of what Microsoft has been referring to as its "Technical Guarantee Program." The program could help channel partners eke out a bit more margin by encouraging customers to buy new PCs even before Windows 7 ships.

Under the alleged program, a customer who purchases a new Vista PC on or after July 1 would receive a free upgrade to Windows 7 when it's available, according to Malaysian technology site TechArp.com. The site has a good track record of finding out dates and details about core Microsoft products before others.

Microsoft officials declined to talk about such a guarantee program. "Regarding Windows 7 Upgrade Options or Tech Guarantee, we often explore options with our partners for how we offer products, but we have nothing to announce at this time," a Microsoft spokesperson said in an e-mail.

Such technology guarantee programs are nothing new for Microsoft. They have been used in the past as marketing tools to keep potential customers from holding off on the purchase of new PCs when a new operating system is being readied. The tech guarantee is meant to provide an incentive for customers to buy sooner rather than sit on the fence.

VARs Back Program

Channel partners think such a guarantee for Windows 7 is a great idea. In fact, some would like Microsoft to move the start date for the program up.

"Currently, you have to have Vista, and that's not a good thing for most customers, so getting the free update is a good idea," said Darren Stanley, president of Network Business Solutions in Woodland Hills, Calif. and an authorized Microsoft partner. Stanley's firm provides outsourced IT functions for small and mid-sized businesses.

The sooner, the better, added another channel partner. "We've always been a big fan of the tech guarantee programs," said Spencer Ferguson, president of Wasatch Software in Salt Lake City. "We're definitely looking forward to the [start of the] tech guarantee. Wasatch is also a Microsoft reseller.

Officially, Microsoft's position is that Windows 7 will drop by the third anniversary of Vista's consumer release, which occurred on Jan. 30, 2007.

Of course, most observers believe it will ship long before January 30, 2010.

In fact, in order for Windows 7 to arrive pre-installed in new PCs on store shelves by Thanksgiving, PC manufacturers historically need to have the final code by late summer. Anything later than that would put Windows 7 into the same kind of predicament that Vista landed in – shipping after the holiday sales season had already ended.

"The Windows 7 Upgrade Program is designed to assist Microsoft's OEM partners in minimizing the number of end users who may postpone acquiring a new computer because of the impending release of the Windows 7 operating system," states what TechArp believes is a Microsoft draft of the document describing the program

Additionally, the tech guarantee program, which is also referred to as the Windows 7 Upgrade Program, is voluntary for the OEMs and resellers. TechArp warns readers that the program name may change prior to the program's formal announcement.

More Aggressive Program

Overall, however, resellers and analysts see anything that boosts sales in such a down market as a benefit. "The OEMs are very willing [and] they have been pushing for a more aggressive program," said Rob Enderle, principal analyst at the Enderle Group.

Meanwhile, Charles King, principal analyst at Pund-IT, views such a program as a wise strategic decision. "With the free upgrade, there will be people who were waiting [for Windows 7] that don't have to wait any longer," King said.

According to the draft document published on TechArp, only customers who buy a new PC with Vista during the program's eligibility window – from July 1 until sometime after Windows 7 is available – qualify for the free upgrades. Resellers are not allowed to distribute the upgrades until after Windows 7 is commercially available.

Additionally, only Vista Home Premium, Business, and Ultimate qualify for free upgrades to equivalent editions of Windows 7. Vista Home Basic and Starter Edition aren't eligible. Neither is Windows XP. Also, each PC must have a valid "certificate of authenticity."

Finally, the draft document advises customers who need to upgrade multiple PCs to use "the appropriate Microsoft Volume Licensing program."

While the document gives at least the tentative start date for the program – July 1 – it does not include the end date. Of course, the possibility that something could upset Microsoft's schedule may be part of the reason Microsoft hasn't even announced such a program yet.

TAGS: Windows,Microsoft,Vista,Windows 7,Tech Guarantee

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