Most people buy a PC preinstalled with the edition of Windows that meets their unique needs. However, for some customers their needs may change over time.

With Windows Anytime Upgrade (or WAU), we make it super easy and convenient for the small number of customers who’s PC needs evolve to need a higher edition of Windows 7.

There are a couple of specific situations where we think WAU will prove useful:

Windows 7 Starter to Windows 7 Home Premium: $79.99

A customer may purchase a netbook thinking they would use primarily it for email. Over time, they find they are using that netbook as their primary every-day PC. That person decides they want their netbook to do more. If the netbook is running Windows 7 Starter (or Windows 7 Home Basic in select markets), WAU makes it super easy to upgrade to Windows 7 Home Premium. Moving to Windows 7 Home Premium will allow that customer to take advantage of features such as Aero Peek and other enhanced functionality in the Windows Taskbar in Windows 7 such as Taskbar Previews. Desktop themes are also enabled and so is Remote Media Streaming.

Windows 7 Home Premium to Windows 7 Professional: $89.99
Windows 7 Home Premium to Windows 7 Ultimate: $139.99*

* You’ll note that we’ve reduced the price of moving from Home Premium to Ultimate 12% in the US as compared to Vista pricing

Another case where WAU may come in handy is when a person wants the ability to connect to a business network (a “domain”). Using WAU to move up to Windows 7 Professional enables the customer to take advantage of the ability to join a domain and use Windows XP Mode to run older programs. When using WAU to move to Windows 7 Ultimate, you’ll get everything from the other editions plus BitLocker to keep your USB devices encrypted and secure and the ability to run your PC in any of 35 different languages (via Language Packs).

After Windows 7 is released to market on October 22nd, you will be able to buy a retail package that contains an upgrade key at a store near you for any of the 3 paths I highlighted above.

If you live in Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, the UK or the US (13 countries) – you will be able to purchase the upgrade from Microsoft online directly within Windows 7.

Whether you buy a WAU retail package from a store or online directly within Windows 7, the upgrade takes as few as ten minutes. This is because it only requires an upgrade key (no media). Your current programs, files, and settings will remain intact.

For a rundown of the Windows Anytime Upgrade experience, click here.

Now let’s talk about the Windows 7 Family Pack. Last week I confirmed we were doing a family pack for Windows 7 consisting of Windows 7 Home Premium for installation on up to 3 PCs.

Today, most homes have more than one PC in them. When you run Windows 7 on more than one PC on a home network, you can do more with features like HomeGroup. HomeGroup allows people to connect to PCs on their network and share files, music and photos with the whole family – easily. The Windows 7 Family Pack is an easy and affordable way to get all your PCs in your household running Windows 7 through licensing to install Windows 7 Home Premium on up to 3 PCs.

The Windows 7 Family Pack will be available starting on October 22nd until supplies last here in the US and other select markets. In the US, the price for the Windows 7 Family Pack will be $149.99 for 3 Windows 7 Home Premium licenses. That’s a savings of more than $200 for three licenses. This is a great value and we’re excited to be able to offer it to customers.

There has been a lot of talk recently about Windows 7 Starter, so I thought I’d dive a little deeper into what it means to have this edition of Windows 7 running on a small notebook PC (a.k.a. a netbook).

Today, the Starter edition of Windows is designed for entry level PCs and available only in certain regions. We first introduced a “Starter edition” with Windows XP, and did again with Windows Vista. Starter comes with limitations, such as being able to run only 3 concurrent applications on a PC at a time (this excludes background processes such as anti-virus applications, wireless and Bluetooth, and system tools like Explorer and Control Panel).

There of course will also be Windows 7 Starter edition, but based on the feedback we’ve received from partners and customers asking us to enable a richer small notebook PC experience with Windows 7 Starter, we’ve decided to make some changes compared to previous Starter editions.

For the first time, we will be making Windows 7 Starter available worldwide on small notebook PCs. We are also going to enable Windows 7 Starter customers the ability to run as many applications simultaneously as they would like, instead of being constricted to the 3 application limit that the previous Starter editions included.

We believe these changes will make Windows 7 Starter an even more attractive option for customers who want a small notebook PC for very basic tasks, like browsing the web, checking email and personal productivity.

It is important to note that Windows 7 Starter still includes only a subset of the features offered in the higher editions of Windows 7 such as Windows 7 Home Premium, Windows 7 Professional and above. Windows 7 Starter does not include:

• Aero Glass, meaning you can only use the “Windows Basic” or other opaque themes. It also means you do not get Taskbar Previews or Aero Peek.
• Personalization features for changing desktop backgrounds, window colors, or sound schemes.
• The ability to switch between users without having to log off.
• Multi-monitor support.
• DVD playback.
• Windows Media Center for watching recorded TV or other media.
• Remote Media Streaming for streaming your music, videos, and recorded TV from your home computer.
• Domain support for business customers.
• XP Mode for those that want the ability to run older Windows XP programs on Windows 7.

After using Windows 7 Starter out myself on my Dell Mini 9, I loved the advancements that it inherently offered versus Windows XP but also concluded that I wanted more. I like to personalize my Dell Mini 9 the way I want it (because I like showing it off and take it everywhere because it’s so small). I also use it to watch videos and listen to music. Because I also have a portable DVD drive, I also sometimes watch movies on my Dell Mini 9 as well. I believe that the majority of consumers will want a version of Windows 7 – like Home Premium - that will make their small notebook capable of all the things that you could do with an “traditional” PC, like playing movies, working with documents, listening to music, working with photos, and even playing games.

As we continue to say since we announced the Windows 7 editions in February, all editions of Windows 7 have been optimized to run on the broadest range of hardware ranging from small notebook PCs all the way up to high end gaming machines. Windows 7 Starter should not be considered “the netbook SKU” as most machines in this category can run any edition of Windows 7. Many of our beta users have installed Windows 7 Ultimate on their small notebook PCs and have given us very positive feedback on their experience.

I’ve since moved to Windows 7 Home Premium on my Dell Mini 9 and am glad I did.

Today, I wanted to take a closer look at the Windows 7 SKUs since there has been some discussion about them for the last couple of days. By the end of this post, I want you to know exactly which edition of Windows 7 is right for you and help you understand how we approached addressing the large amount of feedback we received.

Our SKU line-up is based on listening to feedback from customers and partners and here is what they have told us and how we are addressing their feedback in Windows 7:

1. Customers wanted clarity on which version of Windows is the right version for them.  So…Windows 7 will be offered primarily in 2 editions: Windows 7 Home Premium and Windows 7 Professional.

2. Customers wanted upgrading to a different SKU to be easier.  So…for Windows 7, we are using a single image for all SKUs. This means the bits for all the editions are already on your computer if you are running Windows 7.  With Windows Anytime Upgrade, users can unlock and upgrade to a different SKU much easier than before.

3. Customers did not like losing features when upgrading to a different SKU.  So…in Windows 7, each SKU is a superset of the previous SKU. No features are lost on upgrade.

4. One size does not fit all—particularly with a billion users and thousands of partners around the world.  So…we are addressing the specialized needs for customers in specific markets with Windows 7 Starter, Windows 7 Home Basic, and Windows 7 Enterprise.

Let me dive a little deeper into these 4 areas and what it means for you.

Our marketing efforts, when they begin for Windows 7, will reflect an emphasis on Windows 7 Home Premium and Windows 7 Professional. With the continued hardware advancements made since the launch of Windows Vista, we think 80% of end users will choose one of these two SKUs.

• Windows 7 Home Premium: Recommended Choice for Consumers
• Windows 7 Professional: Recommended Choice for Enthusiasts and Small Business Customers

Essentially, when Windows 7 hits store shelves consumers will see Windows 7 Home Premium and Windows 7 Professional as the choice they will need to make.

We also make it easy for customers to change down the road. So let’s say I purchase Windows 7 Home Premium and want to upgrade to Windows 7 Professional. With Windows Anytime Upgrade I can, as it makes upgrading to another version of Windows 7 much easier now that we have a single image for every SKU. Users will be able to unlock upgraded editions of Windows 7 without original media or additional software as everything they need in order to upgrade will be on their PC already.

Because each SKU is a superset of the previous SKU for Windows 7 that means each higher edition SKU will also include every feature the lower edition SKUs has. Windows 7 Professional will have every feature that Windows 7 Home Premium has plus other business-oriented features such as the ability to join a domain.

Not every customer has the same needs. In general, we discovered that most think we should have about 2 or 3 SKUs but there isn’t much agreement what “the right” SKUs should be. So we are accommodating specialized needs for customers in specific markets. You could also think of these as niche offerings. A small percentage “niche” (like 2%) of the overall customer base is still many millions. That feels pretty big to me and we wanted to make sure we had the right solutions for them. We think it is important to respond to the needs, so we have:

• Windows 7 Starter: Something that our OEM partners asked for is to have an offering for folks that will do very limited things with their PCs and for PCs with limited hardware capabilities. Windows 7 Starter only allows up to 3 applications to run at once. This is something that will be offered only through OEM partners.
• Windows 7 Home Basic: Another offering that our OEMs asked for was a basic offering on Value PCs in emerging markets. This is something that will also only be available through OEM partners. 
• Windows 7 Enterprise: An offering asked for by our best and largest enterprise customers which has all the advanced security and manageability capabilities which also includes BitLocker data protection. This is something available only through Volume License agreements. 

And, for those who want everything we have Windows 7 Ultimate.

Many of you have been asking about how to think about SKUs and very low-end notebook PCs or “Netbooks”. All SKUs of Windows 7 will work on many of these devices, with Windows 7 Home Premium as the recommend SKU on small notebook PCs with sufficient hardware. I have a Dell Mini 9 running the Windows 7 Beta (which is Windows 7 Ultimate) just fine. Brad Brooks, Corporate Vice President for Windows Consumer Product Marketing, talks more about Windows 7 on Netbooks here in this Q&A with Microsoft PressPass.

Today, 1 billion customers use Windows and the needs of our customers span a wide range. We have been listening and learning to make sure we are addressing the full range of needs while simplifying/clarifying the choices.  Our SKU strategy reflects Windows 7’s ability to work well on a variety of PCs as well as meets the needs of our customers.

So which edition of Windows 7 fits your needs? I expect for the majority of you it will be either Windows 7 Home Premium or Windows 7 Professional. For me, I think Windows 7 Professional looks perfect for my needs.