Microsoft raises prices with Windows 2000

Microsoft Corporation has finally set the pricing for its upcoming family of Windows 2000 products, and it looks like the cost of the upgrade is going tobe prohibitively expensive for many users. While the NT 4.0 Workstation toWin2K Professional upgrade will only set you back $150 (the sameprice as the NT 4.0 Workstation upgrade), upgrading Windows 95 or 98 toWindows 2000 Professional will cost a staggering $220, almost twice as muchas the upgrade to NT 4.0 Workstation. Buying the "full" version of Windows2000 Professional will cost $320.

For Server, things get even more complicated and expensive. Windows 2000Server with a 10-user Client Access License (CAL) will cost $1200, while the25-user version will cost $1800. Upgrades from Windows NT 4.0 or NovellNetware will cost $600 and $900 respectively. Windows 2000 Advanced Serverwill cost $4000 for in 25-user form, or $2000 when upgrading from Windows NT4.0 Enterprise Edition.

"Typically, Microsoft notifies customers of its pricing at launch, but weare notifying customers and partners well in advance so they will be able tobudget for Windows 2000," said Mike Nash, the general manager of productmanagement for the Business Windows Division.

The most obvious new cost, however, revolves around Microsoft's new CALpolicy. Microsoft has found that many people that should have been payingfor CALs have not been, so they will be stricter with Windows 2000.Beginning with this release, any user that authenticates against a Windows2000 server will need a CAL. For Internet connections, Microsoft willrequire a $2000 Internet Connector license, similar to what the company hasbeen offering with SQL Server.

As usual, Microsoft will lower CAL prices for volume sales. The pricesannounced today are effectively "retail prices only," as Microsoft's closestcustomers have historically determined specific pricing privately with thesoftware maker. Whether this gets Microsoft is trouble down the road remainsto be seen, but what this means to retail buyers is obvious: Microsoft wantsWindows 2000 Professional to be prohibitively expensive for consumers. The$220 price point is designed to cut down on the number of non-corporatepurchases, further proof that Microsoft wants this OS in the hands ofbusiness users only. The rocky upgrade path, combined with a relatively lowlevel of hardware and software compatibility would only confound and confuseWindows 9x users, who expect upgrades to occur effortlessly. For theseusers, Windows 98 Millennium is waiting in the wings for a late 2000release.

Aside from the consumer issue, there are disturbing signs that Microsoft ishopelessly out of touch with reality when it comes to pricing. The onslaughtof Linux, which can be had for free or next to nothing, has seemingly notaffected the software giant's thinking. Retail Linux packages can be had foras little as $20, while versions tied to phone support cost well under $100.If Linux continues to make inroads in the corporate market next year, youcan expect Microsoft's high prices for Windows 2000 to be a defining momentin its loss of marketshare