After a revealing guess based on the Windows 7 beta, the press and/or other pressures brought to bear the answer to the question: how many versions of Windows 7 will there be? The answer is just six, down from 10+ of Microsoft’s failing desktop product, Vista.

Much insanity ensued after Vista’s release. The problems are well documented and are now a matter of history. Also a part of history is the fact that Vista hasn’t sold well, and customers have stayed away from it in droves. Indeed the sales of Vista to date are largely the result of OEM agreements that Microsoft has with the hardware computer community.

The lack of sales has given rise to competitive operating system sales advances, although these advances aren’t going to shake Microsoft’s market dominance– for better or worse. But what has potentially happened is something that no one planned on– a vision of the drop of perceived cost versus value in operating systems.

When people buy a computer system at retail, the cost of the operating system is hidden. It’s not broken down like HP Notebook (add $20 for Windows, $10 for Linux, and of course Mac OS is missing from the availability list). The value of Windows is somewhat known, but it’s fuzzy and vendors have made it fuzzy because of their agreements with Microsoft.

No one buys a notebook, takes it home, then makes a selection to load an operating system choice. It’s not done. A truly barebones system would require end-users to somehow purchase, download (or enable) a selected operating system. Most civilian users don’t have time for that– the size of the operating system needs to be resident on the user’s hard disk at purchase time– not as a download.

What this does is to devalue the perceived cost of the operating system. Familiarity for many user purchasers would be with Windows, and they might wonder why it was missing on their computer. Simply installing Windows on a new computer system takes a while, for reasons that are largely unclear. The state of a Windows machine under brand-new-condition has changed quite a bit when the purchased machine is ‘bundled’ with Windows. It takes less and less time to install the OEM/bundled version of Windows, but it’s still time-consuming and potentially fraught with user errors from incorrect choices. As users become more savvy, these problems are reduced, but civilian users are still subject to many potential problems with new machines. The state of such OEM products is largely outside of Microsoft’s control, yet Microsoft and the OEM vendor must support the satisfaction of the initial install of the operating system at purchase-setup time. These influence the choices we see today.

The value of a captive OEM operating system is ill-defined. It’s no wonder that establishing value for them is often only done in terms of upgrade price. Without compelling reasons to upgrade, any OS vendor won’t get upgrade revenues because value defines demand.