Microsoft apps--only suckers pay retail

I don't know why Microsoft attaches retail prices to it mainstream software products, Windows and Office. You have to be a loser to pay them. Even beyond the specials and promotions you may already know about, there are other, restrictive programs for acquiring these apps. Chances are the licenses won't let you use the software the way you want, but given that enforcement on these licenses may be lax, they're certainly tempting.

Correction: This story has been modified from the original. It now correctly states that Windows and Office software obtained through the Microsoft Action Pack may be used for business use, while the BizSpark software may only be used for development and testing.

Windows

Windows 7 Home Premium, the full retail version, lists for $199.99. Unless you are building a computer yourself, from scratch, you don't need it. Windows comes on computers, and if you buy a machine today with Vista, you get a free license to upgrade to Windows 7.

For computers you already own, you can get an upgrade edition for $119.99, which, if you have an existing Windows machine, is functionally the same (it does a clean install); it only needs to verify that you already have XP or Vista before doing its thing.

But don't get it. Because you can get three upgrade licenses all together for just $149 in the Family Pack upgrade. You think Microsoft is going to check to see if everyone using the license is related to you?

Prices for Windows 7 Pro are higher, but the pricing programs are the same. For the full "Ultimate" version of Windows 7 (which seems to be a pointless product for 99.9 percent of consumers), prices are even higher, and there are fewer discount programs.

Office

For Office 2010, the prices and packages have not been set yet, but we can assume they will be close to Office 2007, which retails for $299.99, or $182.49 for the upgrade version (on Amazon). You can do better.

You probably know that you can get the Home and Student edition for a lot less (Office 2007 Home and Student is $81.99 on Amazon). This version omits Outlook from Office; the e-mail and calendar app is $79.99 by itself. Better yet is the three-user family pack for Office 2007 Home and Student. It's about the same price as the single-user version, $79.99 on Newegg.

If you can convince Microsoft that you're a college-level student--if you have a .edu e-mail from an accredited institution--you can get the Ultimate Steal version of Office, with Outlook, for just $59.95.

I assume the programs for the next version of Office will be similar, or perhaps slightly less expensive. So I project that a three-computer household will be able to upgrade its computers to Windows 7 and the latest version of Office (without Outlook) for about $76 per machine, or roughly twice that with Outlook (assuming family packs of Windows, a Home and Student edition of Office 2010 that's priced similarly to the current version, and the same a la cart deal for Outlook). That's more than Apple charges for upgrades, but it's not a wholly terrible expense.

Special subscriptions

So far I've covered the consumer versions of Windows and Office. If you're in business or if you manage more than a few computers for a large family, there are other programs you should also know about. Microsoft will put versions of Windows, Office, and other apps in your hands for a lot less than the retail prices, if you qualify for them. Or pretend to.

For example, there's the Microsoft Action Pack, a $299 yearly subscription that gives you 10 functional licenses to every business app Microsoft makes, including Windows, Office (the full enterprise edition), other apps, and even server programs like Exchange. There are restrictions, of course: It's only for Microsoft "partners"--companies that re-sell Microsoft products one way or the other. You have to complete an online certification course, which may include simply passing an online quiz based on a Microsoft marketing presentation. I can't recommend that anyone break a license agreement, but Microsoft has so many resellers I seriously doubt enforcement for the Partner program is rigorous.

If you work at a software start-up, you can subscribe to the BizSpark program for up to three years at a cost of only $100 when you leave the program. This gets you access to Windows, Office, Visual Studio, Microsoft's hosted apps, and even hosting of your own apps on Azure, when it's available. Eligibility: your business must be less than three years old, in the software business, and make less than $1 million a year in revenue. The licenses specify that the software is only for development and test, but this is still a great deal.

There are two other main programs that get you a steady stream of Microsoft software, but they're not as attractive to the general user or business as the previous programs:

IT pros can sign up for a TechNet subscription, which provides unrestricted evaluation versions (in other words, not licensed for production applications) of commercial products like Windows, Office, and several other apps. The download-only version of TechNet is $349 per user for the first year, $249 a year thereafter. You pay more if you want DVDs shipped to you. TechNet gives IT people and system admins access to anything, for the purposes of supporting other users.

TechNet subscribers also get pre-release code of some products (like Windows) so they can work with them before they have to start supporting the products on client computers.

Microsoft's most expensive subscription service for companies in the computer business is MSDN, but it's also the program that will get you access to pretty much every bit of code in the Microsoft arsenal, current and previous versions included. MSDN also gives subscribers access to Microsoft's developer tools and resources. Subscription prices range from $999 to $10,939 per user for the first year (renewal years are less) depending on what you get and the level of support offered. Like TechNet and Action Pack, MSDN code is not licensed for use in the real world--only for development.

By the book

Want to play it straight and buy multiple fully licensed production versions of Microsoft products? You'll pay. I asked the Microsoft Volume Licensing Web page to give me a quote on 10 licenses of Microsoft Office Standard, and it quoted me $588 per user. I got the same price for 100 licenses. If you ever wondered why Microsoft is such a rich company, this explains it. So the smaller company might want to skip the official business versions of the apps and go with standard retail products. There is also, obviously, a big temptation for very small companies to push things a bit and try to qualify for Microsoft's special or home programs that yield huge discounts on the company's software.