Microsoft: “We Don’t Make Money From XP Downgrades”

I’m not sure I buy this myself, but Microsoft has responded to this lawsuit by saying that it doesn’t make any money from Vista to XP downgrades:

“Microsoft does not charge or receive any additional royalty if a customer exercises those [downgrade] rights,” said Microsoft spokesman David Bowermaster in an e-mail late last week. “Some customers may choose or need to obtain media or installation services from third parties to install the downgrade version.”

Now that sounds like what I was talking about in my original post about this issue. Microsoft never used to charge you if you wanted to downgrade to an earlier OS. So the charges that OEMs like Dell and Lenovo have been charging have always struck me as being weird. This therefore implies that the OEMs are screwing the consumer. Dell for one says that’s not the case, and the costs that they charge consumers come from Microsoft:

Dell countered that although it did charge $20 to install XP on the machine, as well as to cover the cost of the additional media, the bulk — $120 of the $150 — was the price of upgrading the PC from the standard Home Premium to the more expensive Business edition.


“Microsoft mandates that customers who want to downgrade to XP must purchase the license to Vista Business or Vista Ultimate,” said Dell spokesman David Frink last December. “[That’s] typically about a $130 premium, though some retail outlets charge more.”

The reason for the upgrade to Vista Business or Ultimate is that there are no downgrade rights from the home versions of Vista. Therefore you have to buy more upscale version of Vista to downgrade back to XP. I’m sure that the cash from that will somehow end up in Microsoft’s bank account at the end of the day. Which means that one could argure that they do in fact make money from XP downgrades. After all, If a customer wanted a XP and they were buying a machine with Vista Home on it, they have to upgrade to the Business or Ultimate version of Vista to get XP. That’s extra cash for Microsoft as the customer has just been upsold.

But I’m likely pulling a Fox Mulder here. Having said that, the truth is out there and will likely be revealed in court.

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