For the first time in the history of the product line, Microsoft is going to be doing away with retail sales of Windows. Instead of selling boxes with physical media included, users will be able to upgrade their existing systems entirely online via Windows Update and purchase new copies for systems built at home using a “System Builder” license.
This is a move that is quite likely overdue at this point. While it is reassuring to have access to the physical media when something goes wrong and a system needs to be completely reinstalled, Windows licensing is already validated through Microsoft’s servers anyway and a significant number of reinstallations end up requiring direct contact with the company to clear up activation issues anyway. With luck, this will eliminate that problem somewhat.
Some of the justification has to come from the options to Refresh and Reset Windows 8. Since a working copy can be returned to its factory default settings in the event of the unforeseen, fewer people are going to end up needing discs lying around. We also have to factor in production costs for the retail product. While a mostly empty box containing several small booklets and a DVD is hardly the most expensive thing to produce, the cost is higher than it will be if they just skip the process altogether. How many people actually buy their operating systems at the local retailer anyway?
That brings us back to what is likely the most important concern. Anybody who is going to be building their own computer is probably going to be purchasing the parts from an online retailer. Most of the major names in that area are happy to offer an OEM copy of Windows to anybody who buys even the smallest piece of hardware. These less expensive licenses, intended for professional installation, can save the customer around 50% of the purchase price in many cases. At the cost of little more than some fancy packaging material, not many people are likely to prefer the retail copies.
Come October, there will be three ways to get a copy of Windows 8. You can buy a computer that comes with it preinstalled, you can upgrade an existing copy of Windows (XP through 7), or you can pick up a “System Builder” copy. All the last one means is that Microsoft has apparently given up on trying to keep up different pricing tiers and is giving the OEM price to anybody with enough technical skill to put together a PC.
This might not be the best move in the world for retailers, but it is a smart one for Microsoft. We just have to hope that they don’t take it too far and eliminate retail upgrade packages. There are still any number of people unable to maintain the kind of internet connectivity required for downloading several gigabytes of new operating system, so at least a short production run of upgrades would just make sense.