Each and every version of Windows 7 will be capable of running on low cost, low power netbooks. But the cheapest version of Windows 7 that netbook makers will be able to license is Windows 7 Starter Edition, which will have several restrictions. For instance, users will only be able to run up to three programs at a time (applications like antivirus software that can be minimized to the system tray don’t count). Companies will be able to license Windows 7 Starter for a minimal cost, but Microsoft won’t be making much money on those licenses and instead will encourage computer makers to preload Windows 7 Home Premium.

Customers who buy netbooks with Windows 7 Starter will also be able to pay for upgrades to Windows 7 Home Premium. The upgrades will probably be cheaper than buying a boxed copy of the operating system, but they could easily add to the cost of the netbook. Final pricing hasn’t been announced yet, but my guess is it’ll be cheaper to buy a netbook that comes with Windows 7 Home Premium preinstalled than to pay for an upgrade yourself. Microsoft tends to give computer makers like Asus, Acer, Dell, and HP a better deal on software licenses since those companies are ordering in bulk.

Anyway, this is all old news. But Bloomberg has an article today that poses an interesting question: Will consumers be willing to pay extra for the more capable versions of Windows 7? Or are people who buy bargain priced mini-laptops looking for a deal, not performance? If that’s the case, then netbooks could pose the same kind of risk for Microsoft in 2009 and 2010 as they did in 2008.

Windows Vista’s minimum system requirements were simply too high for the OS to run well on most netbooks. And so Microsoft was forced to extend the life of Windows XP by offering low priced licenses to computer makers selling mini-laptops. And that ate into Microsoft’s profits for the year. Now, you could make the case that if Microsoft hadn’t offered Windows XP, the company would have lost even more money, since computer makers showed they weren’t scared to install Linux instead of Windows (and customers started to show that they were willing to buy Linux computer as well). But either way, Microsoft is making less money than it used to.

On the other hand, maybe Microsoft doesn’t really need to make money on netbooks. Maybe all Microsoft really needs to do is ensure that its software is installed on the bulk of laptops, desktops, and mini-laptops sold over the next few years. Otherwise, there’s the risk that consumers will pick up large numbers of netbooks running Linux and realize that the operating system meets most of their needs — a decision which may influence them the next time they purchase a desktop or larger laptop computer.

Anyway, what do you think? Would you be willing to pay more up front to purchase a computer with Windows 7 Home Premium instead of Starter Edition? How much? Would you pay Microsoft for the ability to upgrade? Or would you just prefer a netbook that comes preloaded with Linux?

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33 replies on “Would you pay extra to run Windows 7 Home Premium on a netbook?”

    1. This article was written in March, 2009. At the time, Microsoft had stated that this would be a limitation of Windows 7 Starter. Since then, that limitation has been lifted.

  1. LOOK at the ppl leaving comments on here, these are the Ppl that make up the 33% linux OS on netboook users…the general public however will use stater until no longer feasible and then will upgrade..

  2. How does one upgrade here in Australia?

    “Customers who buy netbooks with Windows 7 Starter will also be able to pay for upgrades to Windows 7 Home Premium.”

    New is that the Windows 7 editions are each an individual media release and not like Vista where all operating systems can be unlocked from one DVD.
    How do they plan to offer an upgrade?
    Here in Australia we missed out as the anytime upgrade of windows vista never became available. Our only option was to by a much more expensive upgrade media kit.

  3. Matthew: You wrote:
    I really take issue with your assessment of Microsoft’s response to netbooks, you are either uninformed, a Microsoft shill, or simply love spreading FUD.

    Why is there always at least one person on every website who can not post without insulting people they disagree with. Frankly sir, your post is more “shill like” than anything I wrote.

  4. Here’s my two cents:

    I used to love Microsoft Win XP. I am an I.T. professional and until Vista I was pretty much a Windows proponent. Vista is actually the reason I am a Linux zealot now. Vista is garbage, Microsoft has learned, and is positioning Windows 7 to be the recovery.

    Microsoft is able to command RIDICULOUS prices because of their monopolies with manufacturers. Ever wonder why everything JUST WORKS in the Windows realm when you turn on your shiny new Netbook? The manufacturers are paid by other software developers (McAfee, Roxio, etc.) to put their software on your machines. This allows Microsoft to maintain dominance over Linux through incentives.

    So while Linux is “free” it actually COSTS a manufacturer the revenue from third-party developers to put it on there. Which is why you’ll continue to see XP on your machines until Windows 7 arrives.

    I WOULD NOT pay extra for Windows 7 Home Premium vs. Win 7 Starter Edition on a Netbook. You won’t catch me with Windows 7 as the only OS installed; I’ll turn that machine into a dual boot very quickly.

    Just my two cents.

  5. Would I pay extra for 7 Home premium vs 7 starter? Yes, but this is not the only choice.

    But you must add the good linux distros such asUbuntu, Xandros and Linpus. They are already proven to work on netbooks and getting better stiil with every release. I would then prefer linux over 7 starter, wnd so would most people, I think, for the same price. Except linux would have no per machine fees, and would be even cheaper.

    Bottom line: Microsoft is not really a monopoly, and the choice is not between its artificially constructed versions. Once you add the already proven linux the situation is completely different.

  6. Neither the Linux on my Asus 701eee or my HP Mini 1000 with XP SP3 will connect with a WPA network, which really limits their usefulness. I know that SP3 is supposed to be WPA capable but, trust me, it doesn’t work.

    So if Windows 7 is the only option – absent installing OSX – then I’ll upgrade to some version of it when it is stable.

  7. No, I probably wouldn’t pay the price of a full home edition on a netbook. An OS shouldn’t cost more than 10% of the price of the computer it is sold with, so that woulds make a price point of around $30 for netbooks. At that price level it will probably be Linux or starter edition, but with the limitations of starter I would probably go Linux.

  8. I wouldn’t buy anything with Starter Edition on it anyhow.

    BTW, do we have confirmation that Netobook users will be using Starter Edition? There was also a Starter Edition of XP with the same 3 application limit, but the manufacturers all used XP Home. That XP Starter Edition was only sold in “entry markets”, meaning 3rd world countries where it’s impossible for people to pay $150 for a copy of Home. It sounded like 7 Starte Edition was aimed at the same markets.

  9. This item is exaclty why I bought an XP Netbook now, instead of in the future. I have always loved Windows and used all the OS’es until Vista. But no more. XP is it for me until 7 becomes an amazing, stable, slick and polished cheap OS like XP. That and and more importantly MS starts seeing comsumers such as myself as ‘valued’ customers again. As I hear some of you laugh, why do you think the US is in a lot of the trouble its in now? Consumers have abadoned theyre open market power and companies that ‘Serve’ us have gottten fat and lazy and stagnate trying to shove what they want us to have … down our throat. Those that innovate, will kill the corporate dinos that refuse to evolve and I say amen and will support the new business model that earns my business.

  10. People kill me, with all the talk about Microsoft like its some evil empire. Lets face it, If it was not for Windows and Microsoft I would say 85% of the Worlds population would not be using computers. MS made it easy for NON-GEEKS to be able to use computers with easy simple format even most of the Linux users would not be Linux users if they had not used a Windows pc first.

    I like Linux but I Love Windows. I don’t have to search the globe for software and drivers that work with the majority of other applications out there( Linux users know that there are always compatibility issues with hardware and software, so don’t pretend you are unaware of this issue)

    Bottom line Windows made the end users (which is what counts the most) able to utilize personal computers and will be around as long as it is a industry for PC’s, so Windows haters get a grip and let go of the negativity of Windows.

    1. “MS made it easy for NON-GEEKS to be able to use computers…”

      This displays real ignorance of the history of computing. It was not until 1993, 9 years after Apple introduced the graphical Macintosh OS, that Microsoft successfully stole enough of the Mac’s usability for everyday people to run Windows (3.11).

      The GUI was invented by Xerox but not marketed to the masses. Apple built their own graphical interface (which is still around, by the way — I run OS X on my MSI Wind) after seeing what Xerox had built, and marketed it to the masses with the Lisa and then the Macintosh. Apple had a GUI-based operating system on the market in 1983. Microsoft’s Windows 1.0 was laughable when it came out in 1985 and didn’t improve to what most people consider “usable” until 1993.

      Windows’ real popularity didn’t hit until 12 years after the mass-market GUI, with Windows 95.

      Get over Microsoft. Xerox invented ease-of-use and Apple perfected it. Microsoft just built crap to maintain its DOS empire. And Linux is better by a mile than MS-DOS, which was built on a hack job called “quick and dirty operating system” and was meant to provide some of the experience of CP/M.

      1. Well say what you want the numbers add up to Microsoft being the most utilized OS regardless of who and when it started. Look at the sales number versus Windows, Apple, and Linux. So thanks for the history lesson but your are still beating a dead horse because Microsoft continue to rule on the OS font. So just because you prefer one over the other does not make it be the better choice for everyone.

        1. Well, that’s like saying “Henry Ford made the horseless carriage easy for the average man, because he sold a bunch of Model Ts.”
          When you find out Daimler invented the car, and Ford’s Model T was merely a matter of marketing and what amounted to slave labor, you then say, “you’re beating a dead horse because Ford rules the car market.” That my be true, but what does that have to do with your original incorrect statement?

          As for the questionable “just because you prefer one over the other does not make it be the better choice for everyone.” — was this meant for me or were you telling this to yourself? I never stated any preference, and even loyal Microsoft software users will readily admit that MSDOS and early versions of Windows (some might say ALL versions) are crap.

          I have been a sysadmin running all kinds of operating systems for longer than you have been a user of any system. Even the most dominant players of an era come and go. Even the richest and biggest companies in the industry come and go, hardware and software.

          Microsoft is computing’s past, a legacy system. Will Ballmer uninstall himself, so the machine can be upgraded, or will he continue to make it run slower and slower, like a virus, until it’s not worth the time and money to fix it?

          1. well Matt we can go on forever with this issue. I have a degree in computer science I worked in the IT industry for the past 15 or so years and I think your assessment is based on your own opinion and not factual. Since you have been doing this for soooo long provide me with facts in your debate. Until then you are just one person with 1 opinion out of at least a billion who utilize Microsoft Windows and are proud to stake the claim. Also Karl Benz look that name up for me Mr. History LOL

  11. Hell no! I shouldn’t get the gimp version and I shouldn’t have to pay more to get what I should have had from the start.

    MS needs to start selling two versions of Win 7, and they need to start selling the consumer version dirt cheap. They should want everyone to have their OS, and they should want to make sure that consumers who buy a Mac or Linux system can easily grab a Win 7 box for $99.

  12. Matthew.S you nailed it.

    MS is indeed still playing catch-up. Win7 starter edition option is simply a way for netbook makers to advertise Win7-preloaded netbooks at a price closer to their Linux counterparts.

    There are going to be those who buy the Win7 Starter edition model who will find out the hard way that it is crippled…. and then be forced to buy an upgrade to the real version.

  13. The beta runs fast with almost the same resources as xp on my eee1000 and it is supposed to be the ultimate version so yeah. I’m hoping to score a free business copy though Like I did with vista through a Microsoft training course.

  14. In a word, no.

    If I want Linux, I’ll buy a machine with Linux, and pay one price. If I want Windows, I will buy a machine with a proper Windows, and expect to pay that price, accordingly. If Microsoft wants to be competitive with Linux then they need to price it competitively, not give a deceptive price for a crippled product so as to just LOOK competitive, then nickel and dime you to get what you really expected in the first place. That’s almost bait-and-switch.

  15. I respectfully reject the question. As you note pricing has not been announced and retail prices for various WIndows versions aren’t relevant anyway. There will be some netbooks sold with the Stater Edition to be sure, but more will be sold with Home Premieum or perhaps a special version between the two that we haven’t been told about that will be customized for netbooks like XP was. I base my prediction on past practice. Microsoft recognized that netbooks were a real market and adjusted to it and captured it. (Yes, they were later than they should have been, but still well ahead of any possible competitor.) Windows 7 design decisions were made in order to continue to hold this market. Once Microsoft has captured a market, they have rarely let it go, so I expect the future of the vast majority of netbooks sold will be Windows based.

    1. The question is still valid – you’ll either have to pay more up front
      for a netbook with Windows 7 Home Premium, or pay to upgrade from
      Starter Edition to Home Premium.

    2. @notme:

      I really take issue with your assessment of Microsoft’s response to netbooks, you are either uninformed, a Microsoft shill, or simply love spreading FUD.

      “Microsoft recognized that netbooks were a real market and adjusted to it and captured it.”
      wrong. Microsoft was blind sided by the need for an operating system that runs on low spec machines. In response to the rapid growth of linux on these machines, they extended the lifetime of XP and started giving it away nearly free. They also did not capture the netbook market, Dell is reporting 1/3 of it’s mini 9 machines are shipping with Ubuntu, not bad for a company (Ubuntu) with no marketing presence.

      “Yes, they were later than they should have been, but still well ahead of any possible competitor.”

      To date, Microsoft does not have an operating system designed for use on netbooks, whereas there are at least three commerical linux distro with custom netbook builds ( Xandros, Linpus, and Ubuntu) So they are in fact, trailing behind three actual competitors.

  16. I really like Windows 7 Ultimate that I downloaded from Microsoft. I would pay a little extra to upgrade to Home Premium version of Win 7 not more than $50 bucks. What I am really shooting for “is that Microsoft allows those who downloaded the Windows 7 Beta to continue to use it without a end or cut-off date” especially since we have been using our systems to provide feedback to there development teams.

  17. I’d be willing to pay $10 to $20 for the upgrade, but more than that and I’d likely uninstall Windows 7 and go Linux.

  18. I’m not familiar with version specefics of Windows 7, but the only common reason I could think of people upgrading would be to be able to network with work computers. Right now, that void is filled by X-setup so I can use XP home with our office network.

  19. In a word: no. I will just get the base option for the OS with all of my netbooks and pirate windows 7 for them. “Only be able to run up to three programs at a time” my ass.

  20. I prefer Linux…..it works great for my needs. I’m using a Dell Mini 9 running Mint 6……can’t imagine why anyone would want to support MS.

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