In a blow to businesses that need to purchase more than a handful of new computers between now and Windows 7's Oct. 22nd release date, Microsoft has limited the number of machines that can be upgraded to its new operating system for free to 25.

Windows 7 screen shot
(Click for larger image and for full photo gallery)

Microsoft has made little mention about the limit, which is drawing heat from some notable industry watchers. Gartner analyst Michael Silver on Friday published a research note provocatively titled, "Enterprises Should Demand Windows Upgrade Option."

"Microsoft has limited the number of free Windows 7 upgrades that can be claimed via its Windows Upgrade Option," wrote Silver. "Organizations need to understand their Windows 7 requirements and obtain rights for the best value," Silver said.

Microsoft last week fleshed out details of the Windows Upgrade Option program for the first time. Consumers who purchase a Vista-based personal computer as of last Friday are eligible to upgrade the system to Windows 7 at no or little cost when the latter ships in October.

"Anyone who buys a PC from a participating OEM or retailer with Windows Vista Home Premium, Business, or Ultimate on it will all receive an upgrade to the corresponding version at little or no cost to customers," wrote Microsoft's Brandon LeBlanc, who disclosed the details in a blog post.

Silver said Microsoft may be limiting the number of PCs eligible for upgrades in order to goose sales of its Software Assurance licenses to businesses. Under Software Assurance, companies pay between $100 and $150 per PC for the right to unlimited upgrades at no additional cost for three years.

"Gartner believes that Microsoft designs these program limitations to persuade organizations to enter Enterprise Agreements, enroll licenses in Software Assurance or purchase upgrade rights to run Windows 7," Silver wrote.

Microsoft blamed weak business sales in part for a 16% falloff in Windows sales in the most recent quarter.

Silver said companies that need to buy more than a couple of dozen PCs between now and Oct. 22 should press their PC manufacturer for the right to upgrade later at no cost. "Larger OEMS administer their own programs, have latitude to do this and have made exceptions for organizations in the past," said Silver.

Gartner has advised businesses to evaluate their desktop and application footprint before moving from Windows XP or Vista to Windows 7 in order to avoid upgrade chaos.

InformationWeek has published an indepth report on Windows 7. Download the report here (registration required).