Is Windows getting more expensive?

The short answer is easy: neither. Roughly speaking, the Microsoft product sells for the same price it has had for years.

The full answer is more complicated. There are all sorts of factors that go into one's sense of whether the leading operating system "feels" more pricey or less expensive--the cost of other PC components and what gets bundled into the operating system are just a couple of them.

Microsoft General Manger Brad Brooks argues that Windows is a bargain, noting that it keeps getting more features for the same price.

"If you break down the cost of the software over the life of the PC, it works out to be less than how much you'd spend on milk for your family over that same period of time," Brooks said.

Now that Windows Vista has been on store shelves for about a month, it makes sense to take stock of how it stacks up from a value perspective.

On the side that makes it feel cheaper, there is more in Windows than ever. Built into Vista are several types of programs that have, until now, cost extra. It has antispyware, voice recognition software included in the box, and other programs, such as Virtual PC, are available as free downloads.

And, while Microsoft has kept prices roughly flat, inflation means that in absolute dollars, the price of Windows has declined somewhat. An upgrade to Windows 98, for example, cost $109 in 1998. But in 2007 dollars, that's $137, according to a Federal Reserve Web site. Today, to buy a copy of Vista Home Basic upgrade would cost $99.

On the other hand, since the prices of other computer parts have dropped substantially over time, Windows has become a relatively more expensive part of the average PC. In 1998, for example, the typical desktop cost around $1,100, compared with $650 today, according figures from NPD Group.

Relative value
The fact that other PC component prices have dropped more than Windows doesn't necessarily mean the operating system is a bad deal, NPD analyst Stephen Baker said.

"While it does appear that the absolute cost of Windows has gone up over time, especially in contrast to the overall price of the PC and the other components, that rise certainly appears higher than it really is," Baker said. "Just like in hardware, we have to account for the increased value that the upgrades to the OS provide."

Over the past decade, Windows has integrated the ability to burn music CDs, make movies, record TV shows and edit photos. Also, those abilities haven't come steadily over time, but rather arrived in a bunch with each new Windows release.

"This is much harder than calculating the value of hardware, but I think there clearly has been increased value from the OS," Baker said.

But not all of that value has been just given away by Microsoft. The software maker has introduced pricier editions of the consumer operating system, such as Windows XP Media Center Edition, Windows Vista Home Premium and Windows Vista Ultimate edition. So, while the price of the entry-level operating system has stayed the same, it costs more to get all of the bells and whistles.

Michael Cherry, an analyst with Directions on Microsoft, pointed out that many people won't really get a sense what they are paying for Vista, since it will come already installed when they buy their next PC. "It's really unknown what they pay for Vista," Cherry said.

He noted that on build-to-order computer sites like Dell's, you can uncheck most components of a PC and see how much they add to the bill--but not always. "You can't just uncheck the operating system," Cherry said. (Dell does sell three machines without an operating system as part of its n-series, but adding Windows is not an option.)

Hidden cost
That means that, in large part, consumers' sense of Windows prices will be guided by the overall price of their computer. As long as that continues to drop, consumers are likely to be oblivious to which actual components inside the PC are actually coming down in cost.

"From the consumers' perspective, they are getting a lot more bang for the buck then they did two years ago," said Samir Bhavnani, research director at Current Analysis.

However, one wrinkle in this trend is that Vista tends to work best on a more capable machine. Although it is too early to tell, there are some indications that Vista will push up average PC prices, or at least slow the price decline, Bhavnani said. He noted that in February 2006, the percentage of sub-$500 desktops and notebooks sold grew, compared with the prior holiday shopping season. But this past February, as Vista hit the market, the market share of sub-$500 PCs dropped significantly from the prior holiday season.

Even still, Bhavnani doesn't think too many consumers are viewing Windows as pricey. He noted how new cars would seem inexpensive if year after year they stayed the same price and offered more horsepower.

The people who think about the price of Windows are those who actually go to a retail store and buy an upgrade copy, Cherry said. So far, sales of boxed copies of Vista have trailed initial sales of Windows XP, according to NPD data.

Cherry anticipates that most people will buy a flavor of Vista that corresponds to the version they have of XP. But some will want to move up to a heftier-featured edition, and that will add further to the perceived cost. That's particularly true if a consumer opts for Vista Ultimate, which sells for $259 as an upgrade and $399 for the full product.

1. We are talking about humans who drink Kool Aid mostly from Apple or the open source movement and promptly become Microsoft-hating zombies.

So you're saying these humans who become zombies when they drink Kool Aid? And they hate Microsoft? Wow, that's incredible!

2. There is plenty of spyware for both Linux and Mac computers.

Really? Human zombies and spyware on Macs? Good heavens, we should alert the authorities!

That article is unscientific. I know plenty of people in the field and I can assure you not everybody with a Ph.D. in C.S. produces quality work. I'm not familiar with Gutmann myself so I can't say for certain. All I know is that this does not include empirical analysis and hence isn't scientific - it's a propaganda piece written by an educated man with credentials. Much of what he says is true - just misleading.

The official word from Microsoft is that they don't constantly check unless protected content is playing. This doesn't include games. (Most evidence I've seen is anecdotal, but the majority of people claim to be seeing performance increases in Vista.)

You might consider that drivers have ALWAYS been polling hardware as it is a necessary function of operation. I find it amusing that people continually assume Microsoft has arbitrarily decided to implement constant driver polling.

Again, as I understand the whole DRM issue, it isn't a matter of Microsoft wanting to do this. If they want to support HD-DVD, Blu-Ray, and the like, then they have to incorporate DRM protection mechanisms. Otherwise, they simply won't play. The same things would happen in today's operating systems and will happen in any future operating systems that aim to support these media formats because the media formats demand it.

I don't fight for Microsoft - I don't care about them one way or the other. I do, however, fight against misinformation.

Again, the official word from Microsoft is that content protection is only active when DRM-protected content is playing (HD-DVD / Blu-Ray). The computer knows when DRM-protected content is playing; it doesn't make any sense to poll constantly.

As far as disabling hardware, I have absolutely no idea where you got that. Vista doesn't arbitrarily disable anything - as is true with any operating system, it the hardware doesn't support DRM-protected content then it can't play it.

I hope that is clear.

The official word from Microsoft is that they don't constantly check unless protected content is playing. This doesn't include games.

MS's official word means nothing. Games play video all the time. Am I to accept MS at their word, or trust my past experiences with their software? If MS loses the gamers, the repercussions will be far and wide.

Gamers have driven the graphics card industry and much of the Motherboard improvements over the past couple decades. If this group leaves, what they adopt as their next OS platform will directly effect MS's bottomline and will likely cause MS to have a real OS competitor.

You're absolutely right, but there's no reason (logically) to think that any video would automatically trigger DRM checks. Is it possible? Of course. I'm also not saying that Microsoft's implementation decisions are governed by logic - I know better than that.

I read an interesting article on Vista gaming on Tom's and it seemed to suggest that gaming on Vista is heavily driver-dependent. ATI's drivers produce nearly identical results on XP and Vista while NVidia's Vista drivers perform significantly worse than their XP drivers. It stands to reason that NVidia will soon release drivers that achieve performace at least equivalent to that of XP.

Between all the articles I've read on Vista gaming I haven't seen mention of DRM affecting gaming performance whatsoever. The consensus seems to be that drivers (some in their early stages) are clearly suboptimal. Otherwise, gaming on Vista shouldn't be any different from gaming on XP (performance-wise) and may even be better with further evolutions of drivers.

I don't even run Vista (my machine is far too old these days) but I probably will when I build a new machine shortly. The best tests are those you do yourself, and without those I can only interpret. I will say I don't think Vista gaming will be affected.

My gaming performance is about the same with either Vista or XP on as the OS. Mind you, I wouldn't dream of installing Vista on an old computer. I dropped $2000+ on new parts for my main Vista box (4 GB Kingston HyperX PC 8500 RAM, 500 GB SATA HD, nvidia 8800GTX video card, Intel BLKD975XBX2KR Motherboard, X-Fi platinum sound card (which is made useless as Creative doesn't have the drivers done yet!))

And as far as nvidia goes; yes, the drivers aren't quite there yet. I was using beta versions until the official release date, and then nvidia released the 'official' ones. However, they still need some work.

Very interesting. Do you know how Vista effects DirectX? I am assuming MS is keeping that, otherwise they are going to really infuriate the gamers.

I like Tom's Hardware for the straight scoop and his ability to do real performance comparison.

I had a Radeon9800 card go bad on me a few months before the warranty expired. Had to send it to Canada for a fix and they ended up sending me another card. That one started to have problems after about a year and I got tired of the problems its drivers had working with XP. I had originally upgraded to XP from 2K in the hopes that XP would resolve my game drops. It didn't. 2K actually seemed better for the games I run with the Radeon card.

I finally got feed up with ATI and bought the best NVidia card I could shove into my AGP slot. <<< Hence you see that I will soon need to pass this machine onto my kids and buy a new computer using the PCI or whatever is the latest MB graphic card connector is. NVidia seems to work alot better with XP than ATI did. I was constantly updating my ATI drivers and dealing with Catalyst. With NVidia, I don't think I have updated the drivers once yet. And yes, I always turn-on off auto-update everywhere I find it. I can game for hours without or before a game crash. I suspect that I am overheating the card playing BF2142 or have a intermittent memory problem.

Bottomline is that I'll stay with NVidia the next go around too. I do agree that if comparable ATI/NVidia cards ran the same on XP, they will likely run the same on Vista when NVidia updates the drivers. However, given my ATI experiences, it just may be possible that ATI never optimized their drivers for XP, where as Nvidia did. Thus ATI may work better on Vista when compared to NVidia, because ATI should have had a better framerate on XP and never got it quite right.

I know Vista supports DirectX 10 - I'm pretty sure XP won't support it. Saying it's exclusive is meaningless, I think, but Vista will be the only official support for DirectX 10 (at least now). I'm also assuming DX9 is included.

Oddly enough, I recently switched from NVidia to ATI on this machine (my laptop has an NVidia card). I used to have a Geforce 3 (this machine is nearly 6 years old) and then I switched to a 4600Ti. At that point, I didn't notice any difference in the games I played - mostly Unreal Tournament. At one point I was ranked 10th in the world, which depending on your point of view is a high point or a low point. In any case, the fan gave out on the 4600, but not before making a horrible, horrible (and uncorrectable) noise. So I switched to an ATI (9600XT) - not used for gaming much anymore. It's a pretty good card and it only ran me about $90, so I can't complain. On the plus side, my new monitor was way too bright, and the ATI drivers provided a really useful gamma correction that made the monitor picture fantastic (22" Viewsonic). I used to absolutely abhor ATI drivers as the ATI Fire card and drivers I had would routinely completely freeze the machine. A later Windows update saved the complete blue screen and instead kicked the machine back to 320x240 so I could at least save.

On my laptop - I think it's a 6800 Go Ultra, by the way - those drivers are pretty good too. I hook that machine up to my LCD to watch baseball games, and the drivers are pretty good about recognizing the LCD and automatically setting the correct resolution. I'm happy with those as well - for once in the history of ATI and NVidia I don't have a clear favorite.

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VERSION	Full packaged product	Upgrade version
Windows 98	$209	$109
Windows ME	$209	$109
Windows XP Home	$199	$99
Vista Home Basic	$199	$99
Vista Home Premium	$239	$159