Microsoft Plans Downloadable Versions of Windows Vista, Office

Microsoft plans for the first time to make its new Windows Vista operating system and Office 2007 productivity suite available for downloading by PC users over the Internet.
Downloadable software has become a standard way for PC users to get Web browsers, anti-spyware apps, file-sharing software and more. But so far, two of the most widely used products in the PC world -- Microsoft's Windows and Office -- have eluded electronic distribution. That's about to change.

Microsoft said Wednesday it plans for the first time to make its new Windows Vista operating system and Office 2007 productivity suite available for downloading by PC users over the Internet on Jan. 30, the day it releases those products to the retail market and computer manufacturers. Microsoft and Circuit City Stores plan to sell what the software company expects to be the most popular versions of Windows and Office for consumers and small business customers on Microsoft's Windows Marketplace site. A Microsoft executive says that while downloading Windows from the Web won't appeal to the majority of PC users, it lets the world's largest software company establish an online beachhead for future sales.

"This is the tip of something we think is going to get much larger," says Bill Mannion, director of marketing for consumers and small businesses in Microsoft's Windows division. "It's not yet what I'd consider mainstream."

To be sure, Microsoft has for years sold downloadable copies of its home finance software, games, and other apps online, and software vendors including Intuit, Symantec, and others offer many of their products for downloading. But until now, Microsoft hasn't considered electronic software distribution to be secure or simple enough for its largest products, Mannion says. The company plans to offer Windows and Office for sale on the Web using technology called digital locker, which can safely store the alphanumeric license "keys" that provide customers with rights to use its products, and resume interrupted downloads.

Not that most PC users are apt to try it. Mannion says downloading Vista and Office '07 will likely appeal primarily to what Microsoft's market researchers call "super-engaged" customers -- the 15% of PC users who think nothing of cracking open the computer case for an upgrade, trying new technology, and then blogging about it or telling friends. Those customers are "very evangelical," he adds.

Microsoft also said Wednesday it plans to offer two additional ways for consumers to upgrade to Windows Vista at the end of this month. The company will launch a program called Windows Anytime Upgrade that lets customers who have bought Vista purchase a more expensive version of the operating system by clicking a button on Vista's Start menu. That takes users to a Microsoft Web site where they can download new software keys to unlock features of Vista that reside on their computer's hard drive, or on the Windows Vista DVDs.

It's aimed at customers who want more features than are included in the version they initially bought, and Microsoft plans to offer hefty discounts to customers who upgrade this way. (Note to Mac users: It won't work for running Windows side by side with Mac OS X on a Mac machine using Apple's Boot Camp software -- you will have to buy a full-priced version of Windows).

In addition, Microsoft will allow customers of its most expensive Windows Vista Ultimate product -- which costs $260 for an upgrade version -- buy two copies of Windows Vista Home Premium for other PCs in their house for about $50 each. Microsoft will offer the discount from Home Premium's regular upgrade price of $160 from Jan. 30 to June 30.