Article on Vista upgrade trick rattles the cages

Brian livingston
By Brian Livingston

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The lead story in Windows Secrets on Apr. 3 revealed that Vista Service Pack 1 allows the “upgrade edition” of the OS to be clean-installed, something that supposedly requires Vista’s more-costly “full edition.”

The same trick was present in the original release of Vista, as I reported more than one year ago, but the fact that Microsoft executives have allowed the procedure to remain in SP1 sparked yet another round of thrills on the Web.

It’s news that MS execs retain the process in SP1

The Apr. 3 article, written by associate editor Scott Dunn, demonstrated that Service Pack 1 permits a clean install of Vista to be performed using the operating system’s upgrade edition. The list price for that version of Vista Home Premium is $130 (in the U.S. market) compared with $239 for the full version — a difference of $109.

Microsoft officials have repeatedly confirmed that this procedure is built into Vista. In a News.com interview on Feb. 14, 2007, a Microsoft representative called the hidden feature in the original version of Vista a “workaround,” but claimed that using the trick without owning a copy of Windows XP, 2000, or another qualifying version of the OS would violate Vista’s end user license agreement (EULA).

The clean-install method involves booting a PC from the Vista upgrade DVD. The setup program is then completed without the user entering the disc’s product key or downloading any patches.

Once this unactivated, trial version of Vista is running, setup is started again — this time from within Vista. The “upgrade” option is selected, the product key is entered, and Vista can be activated exactly like the full edition of the product. A complete set of steps was published in my Feb. 1, 2007, article.

Among the numerous Web sites that noted Scott’s latest findings, Computerworld.com gave the story major play. Writer Eric Lai summarized Scott’s story and pointed out another cost-saving policy that Microsoft makes available:
  • “Microsoft Corp. continues to give its tacit blessing for consumers to exploit a technical loophole that allows them to upgrade to Vista with Service Pack 1, even if they don’t own the necessary prior editions of Windows. …

    “Microsoft has a long history of de facto toleration of loopholes that allow determined users to get its software for less than full price. For example, many online stores sell student editions of Microsoft software to any customer with a pulse.”
(To give credit where credit’s due, Scott reported way back on Apr. 12, 2007, that even your dog can buy Windows at Microsoft’s “student” price.)

Other significant media that covered Scott’s Vista SP1 story include Ars Technica, Download Squad, and Slashdot.

How modern, big-time software marketing works

Microsoft’s pricing strategy for Windows Vista is a lot like the old yarn about how some undertakers really make their money.

As told by Jessica Mitford in her 1963 book, The American Way of Death, some funeral directors first show a bereaved next-of-kin the most expensive casket available. This could be called the “gold-plated coffin.”

If the grief-stricken relative approves the first option that’s shown, the undertaker makes a handsome profit. If, instead, the family member asks to see cheaper models, the options that are subsequently offered seem reasonably priced, compared with the high-ticket item that first established the price range.

The full edition of Windows Vista is Microsoft’s gold-plated coffin.

Microsoft hardly expects anyone to actually pay the gilt-edged price. Corporations that sign volume-licensing agreements, for example, can get discounted units that are cheaper than retail upgrade packages. And most individuals will receive Vista preinstalled when buying a new computer, the maker of which qualifies for low OEM pricing.

That does leave a market, of course, of computer hobbyists who plan to install Vista from scratch. This includes Mac users who need to buy a retail package to run Vista in a dual-boot scenario, perhaps using Apple’s Boot Camp.

For every person willing to buy the full edition of Vista for $239, many more would be willing to buy the upgrade edition for “only” $130. Microsoft much prefers to deposit those people’s 130 bucks rather than get zero if people decide that Vista isn’t worth $239.

How do we know what Microsoft executives are thinking about this gimmick? Let’s look at the record:
  • It’s still there after our articles. No one at Microsoft issued a patch to remove the clean-install procedure from Vista after it was first reported in early 2007.

  • It’s still there after the story went viral. No one removed the procedure after the widely read News.com site reported it two weeks later.

  • A CD test? Why bother! Microsoft could have made Vista’s upgrade process request the insertion of a CD containing Windows 2000 or XP, the way XP itself works. But this simple proof-of-ownership test was removed from Vista.

  • Version checking? Who cares! Microsoft could have made Vista’s upgrade process check for a running version of XP or 2000 before upgrading — or made Vista Ultimate check for a running version of Vista Home Premium. But OS version checking was removed from Vista (as confirmed by Knowledge Base article 930985).

  • It’s documented in the Knowledge Base. That same KB article, which was last updated on Mar. 17, 2007, recommends that buyers “use one of the following methods” to clean-install the upgrade edition of Vista. Method 1 provides a terse but effective explanation of the upgrade trick. The document describes Windows 2000, XP, or Vista as “a compliant version of Windows.” The second method is to purchase the full edition. The first method is given more prominence.

  • SP1 is coming, should we take the trick out? Not a single person in a position of authority over the development of Windows directed that the upgrade trick we’ve described be removed in Vista Service Pack 1.

The final proof that Microsoft considers the upgrade trick to be an effective marketing technique is that Microsoft hasn’t issued a patch to remove it, even after this week’s widespread blog exposure. The patch would be so simple that Microsoft CEO Steve Ballmer could order it done tomorrow. I’ll even give him a name for the new build, no royalties required: Vista Service Pack 1.01.

Either Microsoft’s top executives are so out to lunch that they have no concept of what’s happening with their company’s top product, or Microsoft wants people to use the trick, expecting few people to pay Vista’s gold-plated-coffin price.

One blogger seemed to take personal offense that we’d published an article about a documented feature of Vista that’s more than one year old and still works exactly the same way in Service Pack 1.

Ed Bott writes books for Microsoft Press. In his Apr. 4 blog post for ZDNet, though, he sounds more like he wants to be a legal assistant in Microsoft’s corporate litigation department:
  • “If you qualify for an upgrade license, this technique allows you to do a clean install, legally. If you don’t qualify for an upgrade license, then doing a clean install with this technique is technically possible but violates the terms of the license agreement. …

    “The fact that you can work around a technical limitation doesn’t automatically make the practice legal.”
This statement is completely ridiculous. There’s nothing illegal about using an install technique that’s recommended by Microsoft in its own Knowledge Base. The trick was programmed into Vista because authorized people at Microsoft wanted it to be used, and it’s remained in Vista because Microsoft officials wanted it to remain.

Scott and I clearly reported in each of our articles what the Vista EULA states: “To use upgrade software, you must first be licensed for the software that is eligible for the upgrade.”

But clicking OK when shown the first few lines of a EULA on-screen doesn’t legally require anyone to suspend common sense. When Microsoft’s own KB article defines Vista as “a compliant version of Windows,” and the upgrade procedure is recommended for all to use, no court would rule that a person who’d paid the retail price for Vista’s upgrade edition had done something Microsoft could complain about, legally or ethically.

Any reporter who’d read our story and done any real research would have found each piece of evidence I’ve presented in the six bullet points listed above. Such nonsense about what’s “legal” doesn’t belong in ZDNet or any respectable news site.

And, by the way, some Microsoft exec should take Ed aside and clue him in on the joke.

No ethical dilemma in using a documented feature

Integrity is crucial for a journalist, as it is for people in most professions. I would never encourage anyone to steal, because it’s wrong and it can only haunt you (or wreck your karma). Whether I sign a written agreement, or I merely look you in the eye and shake hands on a deal, trying to fudge the terms later would cast a shadow on my reputation, which is all I really have.

It’s possible that the clean-upgrade path was added to the original release of Vista by a rogue programmer. I didn’t believe this back in February 2007, and I said so then, but it’s possible. Now that we see that the technique has not been removed from Vista Service Pack 1, however, I believe we have solid evidence that Redmond decision-makers tacitly approve of its use.

A handful of readers e-mailed Windows Secrets last week, though, concerned that launching Vista’s clean-install process would be unethical if someone used it without owning a previous version of Windows.

I support software makers’ right to earn an honest buck. I honor those readers who are so honest that a hint of deviating from the strictest reading of a EULA raises moral issues for them.

The best description of this concern was submitted by James Beach, who writes:
  • “The new house I just purchased allows anyone to walk up to the door and let themselves in — with no need to have access to a ‘key.’

    “The same behavior was present when my last house was burglarized, but the fact that the trick wasn’t removed from my new house suggests that I approved the back door as a way to make the price of my stuff more appealing to criminals.

    “It sounds like you guys would like the world to be a place where trust is replaced by an attitude of ‘get away with anything you can.’ After all, if people are stupid enough to extend trust that you’ll be a law-abiding citizen, they deserve to be taken advantage of. They probably want you to take advantage of them.

    “Get a life and start publishing legitimate secrets instead of trying to play Robin Hood. (Oh, and I’m assuming by your attitude that I’m perfectly OK to plagiarize all of your work as long as you haven’t taken the time to find and prosecute me.)”
Let’s be clear that neither Scott Dunn nor I ever said that anyone should try to get Vista for free. There are plenty of “timer cracks” on the Web that will let people use the original version of Vista free without activation until 2099 or whenever. We’ve never published these cracks, and we never will.

The clean-upgrade path, as we’ve described it, requires that consumers pay the going price for a copy of Vista. Microsoft likes this revenue, and if you want Vista, you should buy a copy. We won’t help you steal it.

For the sake of argument, is buying less than the full edition of Vista a form of stealing?

The publication of Scott’s article is nothing like planting the following sign in front of your home:

My Front Door is Unlocked —
Please Take Everything You Find Inside


What Scott has reported is more like planting the following placard:

Home for Sale — $499K
$100K Off with Coupon Code BALLMER


People who are selling things find creative ways to make the price look like a good deal. It’s clear that Microsoft has done nothing to remove the clean-upgrade path from Vista. And its continued existence in SP1 proves that the trick is a useful marketing tactic.

There’s no moral problem with a home buyer taking the seller up on the “$100K off” promotion. For the same reason, there’s no moral issue with someone using Microsoft’s documented feature to pay $100 less than the gold-plated price. It’s what Microsoft wants and expects (regardless of what its p.r. surrogates say).

I don’t work for Microsoft. I work for consumers. Until someone pries my cold, dead fingers from my keyboard, I’ll be working to let you know anything Windows does that varies from Redmond’s official pronouncements.

If the clean-upgrade technique is truly unwanted, Mr. Ballmer could have a patch made to remove it as quickly as he can send an e-mail to an intern. Now that Vista has been in wide circulation in various forms for almost two years, and no such patch has appeared, I’m not holding my breath for one to be ordered.

The Vista upgrade discs are fully functional

Mary Smith-Markell writes to ask about the difference between the upgrade and full editions of Vista:
  • “OK, I’m computer challenged. If a Vista ‘upgrade edition’ disk does the same thing as a ‘full edition’ disc, why would Microsoft even bother having two separate products that do the same thing? Unless they were trying to bolster sales by bilking the undereducated (like me). …

    In a side-by-side comparison of the two discs, are there any differences? For example, can one use the upgrade edition to do a repair install, or is the full edition required? Are there any tools or features available in the full edition that are not available in the upgrade edition? Thanks for clarifying.”
Having installed both forms of Vista on test machines many times, we can say that the only difference between the full and upgrade editions is the product key that the user enters.

If you boot from the Vista DVD (rather than launching Vista setup from within Windows), the clean-install option is not available if you enter an upgrade key at that point. That’s why you have to do a clean install with no product key, and then afterwards launch setup from within Vista to do an upgrade installation with the key.

The upgrade disc does include the repair function and all the other features that you ordinarily see when you boot from the DVD.

MS leaves prices unchanged for Anytime Upgrade

Reader Daniel Coté has this question about the pricing of upgrades from one version of Vista to another:
  • “Now that Microsoft has reduced the price of Vista, are you aware of a potential reduction for the so-called Anytime Upgrade price? I’d like to upgrade from Vista Home Premium, which came installed on my PC, to Vista Ultimate.”
The Windows Anytime Upgrade (WAU) program lets those who purchased one flavor of Vista upgrade to another. This is explained on a Microsoft Web page.

However, according to a Microsoft spokesperson who responded to Windows Secrets, the recent Vista price reduction does not affect the Anytime Upgrade. Microsoft does not plan to make changes to the WAU pricing structure at this time.

Readers Beach, Smith-Markell, and Coté will each receive a gift certificate for a book, CD, or DVD of their choice for sending comments we printed. Send us your tips via the Windows Secrets contact page.

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