Microsoft appears to be making all the right moves with Windows 7 -- a revamped and slimmed sequel to Windows Vista -- which is scoring critical acclaim with the press and beta-testing public.  The OS is expected to be a hot seller, when it is released in October.  And Microsoft is looking to do everything it can to promote a bountiful cash flow.

DailyTech already detailed how the company sought to encourage customers to upgrade their OS purchase, by only allowing 3 applications to run simultaneously in the introductory "Starter Edition".  Now new details have emerged from Dell, via CNET's Brooke Crothers, indicating that Windows 7 license prices will be much higher than with Vista.

Darrel Ward, director of product management for Dell's business client product group, states, "If there's one thing that may influence adoption, make things slower or cause customers to pause, it's that generally the ASPs (average selling price) of the operating systems are higher than they were for Vista and XP.  In tough economic times, I think it's naive to believe that you can increase your prices on average and then still see a stronger swell than if you held prices flat or even lowered them. I can tell you that the licensing tiers at retail are more expensive than they were for Vista."

For businesses, Windows Vista Business will be replaced with the more expensive Windows 7 Professional.  Mr. Ward believes that business partners will be turned off by the price.  He states, "Schools and government agencies may not be able to afford (the additional cost). Some of the smaller businesses may not be able to enjoy the software as soon as they'd like."

Despite his concern about the high prices, he says that interest in the new OS is strong and may carry adoption to new highs.  He states, "When Vista came out we didn't have the motivation to do the types of services that we're doing now. We didn't have the clear customer demand for such services," he said. "We do have a visible number of customers, large and small, who are actually waiting for Windows 7 and who have already put plans in place to target the transition to Windows 7, they're asking Dell for help. That demand and this opportunity is stronger than it has been in the past."

He praised the XP Mode feature and strong driver support as critical steps by Microsoft to winning business for the new OS.  He did, however, say that he believes the drivers for Intel's Active Management Technology, which allows remote access to PCs for security, maintenance, and management, aren't where they should be.  He states, "Driver readiness--it looks pretty healthy compared to the past. (There are) some things that haven't been worked out. The WHQL (Windows Hardware Quality Lab) drivers for AMT VPRO is a little behind."

In short, Mr. Ward's remarks reveal intriguing insight into Microsoft's new strategy of boosted Windows 7 prices, and what one of the world's biggest OEMs regard as the new OS's greatest strengths.  With the glowing public reception of the new OS, it seems likely to be a hit at virtually any price, and Microsoft is eager to cash in on that potential.