Jeff Atwood has been considering the profitability of low-priced software, citing the iPhone App Store and discounted games prices as examples. He goes on to opine about Windows pricing:
Say the Windows 7 upgrade price was a more rational $49, or $69. I’m sure the thought of that drives the Redmond consumer surplus capturing marketing weasels apoplectic. But the Valve data – and my own gut intuition – leads me to believe that they’d actually make more money if they priced their software at the “why not?” level.
This may be good advice, but it fails to address the uniqueness of Windows, both in the present climate and historically. Microsoft has always sold most of the copies of Windows to computer manufacturers and large organizations—two groups unlikely to make impulse purchases.
Further, upgrading to Windows 7 will be “a tedious, painful process” for the vast majority of users. You can buy a game or an iPhone app for a couple of bucks, and if you don’t like it that’s not a big deal. If you try Windows 7 and don’t like it you’ve just cost yourself several hours (at least) of work.
As anyone familiar with Linux will tell you, where operating systems are concerned people have a lot of answers to “why not?” unrelated to price.