I have been flabbergasted this week at all the reaction to the non-news that Microsoft will allow business customers to buy a PC with Windows 7 installed and then replace its OS with an earlier version (specifically, Windows Vista or Windows XP). The common thread in all the blog posts and comments I’ve seen is that this represents Microsoft “planning to fail” with Windows 7.
Uh, no.
For starters, this is not new. I’ve clipped the relevant portions from various Windows license agreements through the years and posted them at ZDNet: There’s nothing new about Windows downgrade rights. Anyone who gets all breathless about this policy doesn’t understand Microsoft’s business model and is clueless about corporate computing. So let me see if I can explain here.
When you buy a new PC with Windows preinstalled, you are actually buying a Windows license along with that hardware. The Certificate of Authenticity on the side of the PC is the physical evidence of the license, which is embodied in a detailed agreement. The terms of the Windows license vary, depending on which edition of Windows is installed.
Home customers buy a license to run a specific version of Windows, typically Home Premium. If you want to replace that installed OS, you have to buy a new license.
Business customers buy a license to run Business or Ultimate edition (depending on which one they paid for). But the terms of that license include a section that is not part of the home license. These business licenses include downgrade rights. In the case of Windows Vista Business edition, this section specifically allows you to replace, Vista Business with XP Professional. You as a corporate IT professional might want to do that while you plan migration of all the PCs in your business. Your existing systems are running XP, and you want the new PCs to fit into your existing infrastructure. When you’re ready to upgrade, the license allows you to restore Vista Business.
As I said, this is nothing new. If you bought a PC with Windows XP Professional anytime in the past eight years, it contained a similar clause in the license agreement allowing you to replace the installed OS with Windows 2000 Professional, Windows NT Workstation version 4.0, or even Windows 98 Second Edition. Back in 2001 or 2002, those operating systems were in wide use, and people might not have been ready for the headache of upgrading to XP.
Anyway, that’s what all this means. Nothing more, nothing less. When Windows 7 comes out, customers who buy a business license will have the right to maintain compatibility by choosing older business versions of Windows without violating the terms of the license.
Sorry, conspiracy theorists.
Update: Just a note to clarify this isn’t aimed at my ZDNet colleague Mary Jo Foley, who stopped by the comments section with a link to her excellent post on the subject: Microsoft will allow Windows 7 users to downgrade to XP. An awful lot of people have been piggybacking on her original reporting and adding their own miguided interpretations.
Ed Bott 
I’ll be the first to step up and say: Yes! I am clueless about Microsoft’s business model 🙂 Happily — or sadly — I am not alone. Gartner and many users to whom I’ve spoken did not know that you would be able to downgrade to XP with Windows 7.
Microsoft’s downgrade policies have been murky. And the company’s unwillingness to answer questions about them have confused many.
I was happy to see the Windows client team break with tradition this week and explain the Win 7 downgrade rights plan. I think that was a good move.
I do agree with you, Ed, that the conspiracy theorists are running wild with what this means. It doesn’t mean MS thinks Win 7 will be a failure. Not in the least!
If you’re among those of us who were in the dark about Microsoft’s downgrade plans for Win 7, here’s what I wrote about this topic this week:
Microsoft will allow Windows 7 users to downgrade to XP
http://blogs.zdnet.com/microsoft/?p=2456
Mary Jo
Hi Mary Jo, I’ve updated the post with a link to your column. Of course no one knew the specific terms of the Windows 7 license until Microsoft acknowledged them, and as you say, good for them for saying that early. But any Gartner analyst should have been able to predict this one. I’m astounded they would admit otherwise.
Perhaps this merely indicates to what extent Gartner has fallen from grace.
Speaking of “not understand[ing] Microsoft’s business model”, James Fallows explained it accurately and succintly back in 2000: “One other discovery helped me understand why the company has remained so profitable and dominant. Microsoft understands exactly who its most important customers are. Unfortunately, that group does not include people like me… individuals are not the significant customers.”
Wow I never thought this needed to be explained in the first place. But even then, it is not enough the refute the claim that Win7 may not be able to replace our good old XP. If anything, it just shows your enthusiasm for the new OS and clears up some misunderstanding for the uninitiated.
Seriously, people can badmouth it as much as they want, but since when have we cared? The most vocal ones are, fortunately, almost always in the minority. After all it’s the silent majority that we should really care about.
I agree with nicksterse. I think it’s natural to allow business users to downgrade, even as you’re trying to push the benefits of a new OS.
I’m curious, though: do such downgrade options for businesses (or individuals) contain clauses that specify the end of free technical support, or additional fees that apply to the downgrade transaction?