Microsoft Says No Profit In Vista-XP Downgrades 315
CWmike writes "Microsoft has denied that it makes money when users 'downgrade' Windows Vista to XP, as a lawsuit filed last week alleges. The lawsuit, submitted last week, stems from the $59.25 fee that a California woman was charged in mid-2008 when she bought a Lenovo laptop and downgraded from Vista to XP. In fact, it's computer makers, not Microsoft per se, that charge users the additional fees for downgrading a new PC from Vista to XP at the factory. For example, Dell Inc. adds an extra $20 to the price to downgrade a PC. However, Microsoft may profit from the way it structures downgrade rights."
Re:Of course they are making money (Score:5, Interesting)
The vendors purchase licenses for a specific number of computers. If the vendor uses two licenses for the same machine (Vista & downgrade to XP), I don't see the vendor profiting in any way. What you did was purchase 2 licenses, and the profits are shared by your vendor as well as M$. Its hard to tell how they share those profits.
That, or I have no clue what I'm talking about.
Then why not simply ship XP? (Score:3, Interesting)
Then why dont they start shipping XP? May be there is something else to it, than directly making a profit. May be, they can charge the OEMs more for Vista, since the OEMs can inturn charge the customer extra for downgrades. Guess how much vista would have been worth, if no body could downgrade to XP from vista and XP was available in retail.
Frankly, I dont expect MSFT to do anything that does not directly correlate to immediate profits.
They're making money on the marketing (Score:5, Interesting)
For every user that buys a Vista license and then downgrades, MS gets to claim that as a Vista sale. The higher sales numbers serve as marketing copy. It's artificially inflating their sales.
Re:Of course they are making money (Score:5, Interesting)
That's exactly the issue (as I understand it); you must pay more money to upgrade to Vista Ultimate or Vista Business so that you can then downgrade to XP Professional. With Dell, this upgrade is an extra $99 (unless you happen to catch them doing a free XP downgrade promo).
Isn't an up-sell on editions a profit generator for Microsoft in addition to Dell? Doesn't that mean both companies are making MORE money by requiring this?
The cons of course is that I'm comparing a $99 upgrade from Vista Home Basic to Vista Business Bonus (which has a license transferable to XP Professional), which is comparable to the $99 upgrade from XP Home to XP Pro back before Vista came out, so it's really the same thing, but I don't see how Microsoft can claim they're not profiting off of this. On top of this, nobody running Windows XP independent of an Active Directory server would care about getting Professional instead of Home ... it's just that Dell (et al) aren't offering Windows XP Home downgrades, since there would be no profit. Hmm...
Microsoft can claim they're not making money on XP, but they can't claim that people downgrading to XP doesn't make more money through upgrading Vista for the transferable license.