Microsoft has finally released details of how it's going to distribute and sell Windows 7.

Like virtually every other announcement in the Windows 7 development cycle so far, the final decision appears to be aimed at handling a common objection - in this case, the perception that there are too many editions of Windows Vista.

The final lineup isn't as clean as some would like (my colleague Mary Jo Foley says she's "still confused" by at least one of the lineup decisions, and she calls the proposed netbook solution "ugly."

So what are the details?

For those of us in the developed world, there are only three editions that matter:

Windows 7 Home Premium
This is the successor to Windows Vista Home Premium, and Microsoft expects it to be the most common edition sold, the standard for virtually all consumer PCs.

It includes the Aero interface with its Windows 7 enhancements, plus Windows Media Center, DVD playback support, and multi-touch and handwriting features. I'm also told (but can't yet confirm) that image-based backup is included in this edition for the first time.

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Windows 7 Professional
This edition drops the Business label used in Windows Vista and goes back to the old XP-era name, presumably to give XP users more comfort in their upgrade decision. Unlike Vista Business, this edition contains all features in the Home Premium edition, including Media Center.

For the extra cost, you get more traditional business features like the ability to join a Windows domain, group policy based management tools, Remote Desktop host capabilities, network-based backup features, and support for the Encrypting file system.

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Windows 7 Ultimate/Enterprise
In the retail channel, this edition will be called Ultimate; for corporate customers with a Select license agreement, it will be called Enterprise.

In either case, the feature set includes everything in Professional edition plus support for BitLocker whole-drive encryption (and the new BitLocker To Go feature, which adds high-grade encryption to removable media).

This edition also includes all supported language packs (those cost extra for other editions) and the capability to boot from a VHD.

Microsoft is de-emphasizing the Ultimate edition, which has only been able to gather a tiny share (a Microsoft told me yesterday that Ultimate's share is in the 3-5 percent range).

It will still be available, but primarily for those who want BitLocker and as a premium upgrade for super-high-end machines where the Ultimate name might add some cachet.

The real news is that each edition is a superset of the one before it. That means you can upgrade from, say, Home Premium to Professional by purchasing an upgrade key and then "unlocking" the additional features. The entire process takes 5-10 minutes, I'm told by people who've tested it, and involves none of the hassles of the current upgrade strategy, which requires a complete reinstallation.

So what happened to those other editions? They're still around, but your ability to buy them is highly constrained.

More Ultimate...

More Enterprise...

Windows 7 Home Basic
Which lacks the Aero interface, will be available for sale only in emerging markets and will not legally be available for sale in the U.S., Western Europe, Japan, and other developed countries.
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Windows 7 Starter Edition
With its artificial restriction on performance (you can only run three simultaneous programs) will be available for sale worldwide, but only as a preinstalled operating system on OEM-built PCs "limited to specific types of hardware."

Microsoft is clearly confident that it has pared down the resource requirements of Windows 7 Home Premium so that it will run acceptably on the generation of netbooks that will be current when Windows 7 arrives later this year.

It's hard to imagine the Windows 7 Starter Edition name being much of a selling point. Microsoft may even be taking the calculated risk of discouraging Windows 7 from being installed on underpowered notebooks and triggering disappointing reviews.

The crucial element missing from today's announcement is pricing. Microsoft's Mike Ybarra, General Manager for Windows, told me yesterday that we can expect "aggressive price points and some very good offers" when Windows 7 is released.

In my estimation, the biggest news in this announcement is the change in how the upgrade process works. Microsoft's Anytime Upgrade program was a complete failure in Windows Vista. But the revamped version has a much better chance of drawing in upgrade dollars, a topic I'll look at more closely in a follow-up post.

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From Ed Bott:

Availability

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Retail (boxed, with new PCs) Yes Yes Yes Ult. only

User interface features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Windows Basic UI Yes Yes Yes Yes
Windows Standard UI Yes Yes Yes Yes
Windows Aero UI ("Glass") Yes Yes Yes
Aero Peek Yes Yes Yes
Aero Snaps Yes Yes Yes Yes Yes
Aero Shake Yes Yes Yes
Aero Background Yes Yes Yes
Windows Flip Yes Yes Yes Yes Yes
Windows Flip 3D Yes Yes Yes
Live Taskbar Previews Yes Yes Yes Yes
Live Preview (Explorer) Yes Yes Yes
Jump Lists Yes Yes Yes Yes Yes
Windows Search Yes Yes Yes Yes Yes

Security features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
More granular UAC Yes Yes Yes Yes Yes
Action Center Yes Yes Yes Yes Yes
Windows Defender Yes Yes Yes Yes Yes
Windows Firewall Yes Yes Yes Yes Yes
IE 8 Protected Mode and DEP support Yes Yes Yes Yes Yes
Windows Update (can access Microsoft Update) Yes Yes Yes Yes Yes
Fast User Switching Yes Yes Yes Yes
Parental Controls Yes Yes Yes Yes Yes

Performance features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Windows ReadyDrive Yes Yes Yes Yes Yes
Windows ReadyBoost Yes Yes Yes Yes Yes
SuperFetch Yes Yes Yes Yes Yes
64-bit processor support Yes Yes Yes Yes Yes
Physical processor support 1 1 2 2 2
Processor core support Unlimited Unlimited Unlimited Unlimited Unlimited
Max RAM (32-bit) 4 GB 4 GB 4 GB 4 GB 4 GB
Max RAM (64-bit) 8 GB 8 GB 16 GB 192 GB 192 GB
Number of running applications supported Unlimited 3 Unlimited Unlimited Unlimited

Reliability features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Windows Backup Yes Yes Yes Yes Yes
System image Yes Yes Yes Yes Yes
Backup to network Yes Yes
Encrypting File System (EFS) Yes Yes
BitLocker Yes
BitLocker To Go Yes
Automatic hard disk defragmentation Yes Yes Yes Yes Yes
Previous Versions Yes Yes Yes Yes Yes
Create and attach (mount) VHD Yes Yes Yes Yes Yes

Bundled applications

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Internet Explorer 8 Yes Yes Yes Yes Yes
Windows Gadgets and Gallery Yes Yes Yes Yes Yes
Games Explorer with basic games (FreeCell, Hearts, Minesweeper, Purble Palace, Solitaire, Spide Solitaire) Yes Yes Yes Yes Yes
Premium games (Hearts, Internet Backgammon, Internet Checkers, Internet Spades, Mahjong Titans) Yes Yes Yes
Calculator Yes Yes Yes Yes Yes
Paint Yes Yes Yes Yes Yes
Snipping Tool Yes Yes Yes
Sticky Notes Yes Yes Yes
Windows Journal Yes Yes Yes
Windows Fax and Scan Yes Yes Yes Yes Yes
Windows PowerShell and ISE Yes Yes Yes Yes Yes
WordPad Yes Yes Yes Yes Yes
XPS Viewer Yes Yes Yes Yes Yes
Windows Anytime Upgrade Yes Yes Yes Yes

Digital media and devices

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Windows Photo Viewer Yes Yes Yes Yes Yes
Basic photo slide shows Yes Yes Yes Yes Yes
Windows Media Player 12 with Play To Yes Yes Yes Yes Yes
Windows Media Player Remote Media Experience Yes Yes Yes
MPEG-2 decoding Yes Yes Yes
Dolby Digital compatibility Yes Yes Yes
AAC and H.264 decoding Yes Yes Yes Yes Yes
DVD playback Yes Yes Yes
Can install MPEG-2 (DVD playback) add-in Yes Yes n/a n/a n/a
Windows Media Center Yes Yes Yes
Number of TV tuners supported 4 of each type (analog, digital, etc.) 4 of each type (analog, digital, etc.) 4 of each type (analog, digital, etc.)
Windows DVD Maker Yes Yes Yes
Device Stage Yes Yes Yes Yes Yes
Sync Center Yes Yes Yes Yes Yes

Networking features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
SMB connections 20 20 20 20 20
Network and Sharing Center Yes Yes Yes Yes Yes
HomeGroup sharing Join only Join only Yes Yes Yes
Improved power management Yes Yes Yes Yes Yes
Connect to a Projector Yes Yes Yes Yes Yes
Remote Desktop Yes Yes Yes Yes Yes
Remote Desktop Host Yes Yes
IIS Web Server Yes Yes Yes
RSS support Yes Yes Yes Yes Yes
Internet Connection Sharing Yes Yes Yes Yes
Network Bridge Yes Yes Yes Yes
Offline files Yes Yes

Mobility features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Windows Mobility Center Yes (No presentation mode) Yes (No presentation mode) Yes Yes
Windows Sideshow (Auxilliary display) Yes Yes Yes
Sync Center Yes Yes Yes Yes Yes
Tablet PC functionality Yes Yes Yes
Multi-Touch support Yes Yes Yes

Enterprise features

Home Basic Starter Home Premium Professional Enterprise & Ultimate
Domain join (Windows Server) Yes Yes
XP Mode licensed Yes Yes
AppLocker Yes
Boot from VHD Yes
Branche Cache Yes
DirectAccess Yes
Federated Search (Enterprise Search Scopes) Yes
Multilingual User Interface (MUI) Language Packs Yes
Location-aware printing Yes Yes
Subsystem for UNIX-based Applications Yes




Source: Paul Thurrott

Microsoft has confirmed the existence of six separate Windows 7 versions. That's identical to what launched with Windows Vista, although you won't likely see Windows 7 Home Basic appearing on your local store shelves. Nor might you be able to use Windows 7 Starter, depending on where you live and the hardware you're intending to run it on.

Confused? Here's a full breakdown of Windows 7 shipped editions, ordered by complexity:
Windows 7 Starter

Lacks: Aero enhancements, the ability to run more than three simultaneous programs at once*, HomeGroup creation, full mobility capabilities

Available: Emerging markets only, only installed on OEM-specific machines and limited to certain kinds of hardware

*Ignores background applications like file backup utilities, but will trigger if you actually open up the backup program
Windows 7 Home Basic

Lacks: Aero enhancements, live thumbnail previews, Internet connection sharing

Available: Emerging markets only (no U.S., Western Europe, Japan, and other developed countries)
Windows 7 Home Premium

Includes: Aero enhancements, multi-touch capability, media functionality for playing movies and burning DVDs, and the ability to create home network groups

Available: Worldwide!
Windows 7 Professional

Includes: Enhanced networking features like domain join, advanced backup, location-aware printing, and offline folders, as well as Mobility Center and Presentation Mode.

Available: Worldwide!
Windows 7 Enterprise

Includes: Branch Cache, DirectAccess, BitLocker, AppLocker, boot from VHD support

Available: Volume licensing only
Windows 7 Ultimate

Includes: Everything. The whole enchilada. Just not any Ultimate extras--Microsoft has scrapped the notion of these extended add-ons for its future operating systems.

Available: Limited availability
What to Get and How to Install It

Microsoft intends for Windows 7 Home Premium and Windows 7 Professional to be the two editions that most consumers are apt to pick up. Your Average Joe should target the former, whereas small business-themed customers will want to opt for the latter. Microsoft has yet to offer its official suggestions for or hardware recommendations for the operating systems, so stay tuned. However, Microsoft alleges that the various editions of Windows 7 will be able to run on a "very broad set of hardware, from small-notebook PCs (sometimes referred to as netbooks) to full gaming desktops."

Microsoft has yet to announce price points for any of the Windows 7 products. Upgrading from a lesser Windows 7 version to a more meaty variety will be handled through Microsoft's electronic upgrade capabilities. Going from a standard Vista Home Basic or Home Premium install to Windows 7 won't require a reformat of any kind. According to Windows guru Paul Thurrott, the new operating system can be installed right overtop of these Vista editions without complications. Going from XP to Windows 7 will require a clean installation, as will jumping from a 32-bit Windows 7 installation to a 64-bit installation.