Microsoft's Windows 7-to-XP downgrade plan a 'real mess,' says analyst

As expected, Microsoft will let computer makers sell PCs with the aged Windows XP for six months after it releases Windows 7, a move that will confuse companies and make it tougher for them to manage their licensing, an analyst said today.

A slide from a Microsoft PowerPoint presentation that Computerworld has seen shows that the company plans to cut off OEMs' XP downgrade rights six months after Windows 7 debuts, limiting computer makers' moves after that to offering Vista-powered PCs.

Only computers that come with Windows 7 Professional or Windows 7 Ultimate allow OEM downgrade rights, according to the slide. That set-up is similar to the one used for Vista, which can be downgraded to XP Professional only from Vista Business and Vista Ultimate. (Vista Business is the closest edition to the upcoming Windows 7 Professional in its feature set.)

What's different with Windows 7, and what could potentially be a nightmarish headache for enterprises, is the six-month limitation on downgrades from Windows 7 to XP.

“Microsoft has never had this sort of limited time for downgrades, and we think it's going to be a real mess,” said Michael Silver, an analyst with Gartner.

With the Oct. 22 launch date that Microsoft has already announced — called “general availability” in its jargon — OEMs will presumably be allowed to ship XP-equipped systems through most of April, 2010. Previously a leaked Hewlett-Packard memo noted that Microsoft had given that computer maker the green light to offer XP downgrades until next April 30; two months ago, the company refused to confirm the HP memo's contents.

Silver outlined the Catch-22 as he sees it. “For an organization that's trying to skip Vista, that means they really need to buy new PCs that they need to run on XP, and want to upgrade later to Windows 7, by April 21, 2010,” Silver said. “[But] since a lot of organizations won't be ready for Windows 7 until later in 2010 or even early 2011, any PCs they buy from April 22, 2010 on, and until they are ready to deploy Windows 7, would need an upgrade license or [Software Assurance] to allow them to run Windows XP temporarily, and upgrade to Windows 7 later on.”

Corporations that subscribe to Software Assurance (SA) — Microsoft's annuity-like upgrade guarantee program — or purchase Windows through volume licensing plans have downgrade rights from any edition, including Windows 7, to any previous version going as far back as Windows 95.

Silver's scenario means that companies who want to later upgrade new PCs to Windows 7, but want to run XP for the moment — most likely, to keep them in sync with the rest of the firm — will have to buy those machines before the end of April 2010, or purchase SA, or fork over money for an upgrade license from XP to Windows 7 later.

Lacking an SA plan, companies that buy PCs after the 2010 downgrade cut-off would have to make do with Vista or move all the way to Windows 7 if they wanted to avoid a multiple license hit. Neither operating system would be of help if the firm was still standardized on XP.

The alternative to SA: Buy the new PC with Vista Business or Vista Ultimate, which do have downgrade rights to XP, then downgrade to the old OS. Later, said Silver, one would have to buy an upgrade license from XP to Windows 7.

Silver saw other problems looming because of the unusual cut-off. “Most organizations are challenged when it comes to asset management anyway, so trying to figure out which PCs need SA or upgrades and which don't could be a challenge, not to mention the additional cash those upgrades will cost,” he said.

Silver has been pessimistic about Microsoft's downgrade plans for months. Back in February, he said that Windows 7 downgrade rights to XP would be “hugely important” to the companies and their timing of a migration to the new OS. At the time, he thought that there was a good chance Microsoft wouldn't offer any downgrade path from Windows 7 to XP.

Microsoft was unable to confirm the details that Silver spelled out about Windows 7's limited-time downgrades.