Microsoft has reduced Windows XP custom support pricing for businesses

Microsoft released the last public updates for Windows XP last week, but many businesses and governments that still use PCs with the 12 year old OS are paying the company to continue getting patches and support. These "custom support" packages were thought to be very expensive but now it seems Microsoft has cut the price for these packages.

Computerworld reports, via unnamed sources, that Microsoft reduced the custom support contract prices just days before the April 8th cut off day for Windows XP for many businesses. One example had a company turning down a $2 million contract for continued support for its 10,000 XP PCs, only to get the same offer from Microsoft for the price of just $250,000.

ZDNet contacted Microsoft on the matter and the company confirmed that it has indeed cut its custom support prices, although details were not revealed. It stated:

We’ve been working with customers and partners on the migration from Windows XP since we announced in September 2007 that support for Windows XP would end on April 8. 2014. As part of this effort, we’ve made custom support more affordable so large enterprise organizations could have temporary support in place while they migrate to a more modern and secure operating system.

The same story claims, via unnamed sources, that Microsoft reduced the Windows XP custom support price for one business from $85 million all the way down to $3 million.

Source: ZDNet and Computerworld

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I don't get it, IT Managers should have acted along time ago, company's are offering up to (largest amount ) 85Million, could have used that to start the process, Im sure the IT Manager knew and done nothing about it
Can someone tell me when MS said that they were ending XP support ( very first time ? ) ?

Extending Windows XP support is one thing, are these companies begging vendors for a break too? Some software and hardware vendors have left XP behind, but I'm sure a fat chunk of change will give them reason to grant an exception where possible. I doubt they can expect to receive the price break MS just gave some folks though.

So basically a business or a few of them pay for some security patches which will likely get leaked but would be wise if MS just release them to the public along with all others. And it is NOT cheaper to upgrade, and is cheaper to pay for extended support. Reason I say this is you have some businesses that have machines upwards of $1million in value running software that is only compatible on XP or the manufactures are only supporting it thru XP or even worse, no longer supporting it at all so its best to stay on XP.

IMO, pricing was fine as it was, only way it should go was up, until the point where a business realized that it's cheaper to upgrade than to pay for extended support.

I'm wondering if maybe there are enough businesses requesting these contracts that Microsoft is achieving economies of scale and passing the savings on to it's customers. Keeping the development team necessary to continue supporting XP is probably a fixed cost. The more businesses pay for support extension the more that cost is spread around. And since Microsoft's real goal is to promote upgrades, discounting makes even more sense.

3 million for one business is acceptable. So acceptable that many business may just go for it. Unlike 85 million which is just a way to force people to upgrade. Guess Microsoft found itself another lucrative market.

Wrong. Microsoft have always charged for support after end-of-life. It's hardly a new thing. Businesses are free to accept the charges or not.

testman said,
Wrong. Microsoft have always charged for support after end-of-life. It's hardly a new thing. Businesses are free to accept the charges or not.

Except previously the aging version of Windows was well below 5% marketshare. It wasn't a very lucrative market. And lets be honest, 85 million is a price that scares people into upgrading. 3 million is a price that is very agreeable and means companies can take their time while still feeling the pressure to eventually upgrade. Meaning in the shotterm Microsoft makes a nice profit and in the long run they'll get their licensing fees.

As someone mentioned above, it amazes me that companies are willing to pay millions of dollars for continued support. Surely upgrading to Windows 7 costs less than this or even getting new PCs? As far as software goes, I thought Windows 7 still had compatibility mode to run older software

Not even close.

Millions upon millions to upgrade 10,000 users.
Example at work
1. One OU on the network client side\customer 1\agents has 24 group policies needed for PCI complaince (financial transactions) as well as stuff like app and or IE shortcuts.

Guess what? They are not compatible with Windows 7. A template is needed for all 24. Then guess what? Security differences in XP vs WIn 7 do things like printing. THen the users scream WHERE IS MY PRINTER. Now I need to write another GPO to add the printer back.
2. App seems to work. Ooops gives an error -145 error FTP access denied. Turns out the new security improvements in the win 7 network stack make FTP not accessible to limited users. Oops.

This is one site with 80 users out of 33,000 for my employer!

Some apps wont work right without a particular registry hacks requiring a Group policy object for each site container on the network active directory. They need to all be redone.

THis is not your home pc where after getting win 7 you click setup.exe and be done.

XP is the foundation of all IT underneath. It is more like moving a house without the foundation to a new one with a new foundation and expect it to work?

That is why it costs millions to upgrade. Corporate IT networks get very complex and we had over +300 bugs that were showstoppers during a test run corporate wide. Almost all the apps except for 3 or 4 were Win 7 compatible too!

Companies who have IBM mainframes pay millions each and get charged hundreds an hour to run. IBM only rents them to make a penny.

But companies would rather spend millions each year then hundreds of thousands in 1 quarter to keep the stock price high the so the CEO can get his bonus instead.

THe rest have moved off these legacy programs years ago when y2k hit and people realized it is rather penny wise, dollar dumb to use a mainframe unless there is something absolutely can not run on high end server hardware.

It is cheaper to pay for support for 10,000 computers than to upgrade.

Folks, you have no idea how hard it is to upgrade such an environment or how much money is lost by just a few hours of production lost due to a WIndows 7, app, GPO, active directory, security change, or lord knows what pops up in a platform upgrade! Saying there is NO EXCUSE is really ignorant.

XP is the pillar that all IT lays upon in corporate IT. IT is more akin to moving a new house off to a new foundation. Than just changing the roof. It is at the base of everything. Active directory, group policy settings, security settings, apps, everything is tied down to the OS at a specific version. It is not like upgrading your home pc at all. No group policy or network changes at the active directory level are required for you to click setup.exe at home.

Hard but not impossible, and lots of companies with exceedingly complex environments have managed it fine over time. Where there's a will and financial support there is definitely a way to migrate from legacy systems. Anyone claiming otherwise is ignorant.

I say screw them, make them pay 10 million. Its not like they are going to all switch to Linux or Macs. I would make it so hard on businesses that they will have to at least switch to Windows 7 or 8. The more they drag this on the more stagnated technology becomes.

No, you can't make them pay anything. Businesses are free to not pay anything, obviously - they would have approached Microsoft with a price, Microsoft came up with one, business can reject. From Microsoft's perspective, a smaller amount is better than no amount.

Yeah, because all the business can change without any problem... Where I work, we have more then a 1000 softwares. For the past 4 years, we have been under analysis to migrate to Windows 7. It require us to change computer (some are way to old, specialy for the newer version of software like autocad), migrate data (office data have to be migrated to new version too), verify program compatibility with Windows 7 and Office 2013 (currently, about half of our software AREN'T compatible, they don't run)... So right now, I can't migrate because too many software, critical software, aren't compatible. If I migrate without these software, the city will simply stop working (I work for a public transport company). You think we, ITs, want to support that XP and old office product? It's giving us administration and support headache.

And don't forget years and decade of bad practice, both in ITs and users, which make the switch harder when you have over 5000 pc and more then 10 000 users.

You think my bus have a Windows 7 software ready for diagnostic, travel, schedule making that are compatible with the rest of my system? All system here are interconnect, meaning they talk to each other. Upgrading one of them can break many others without proper checking, and this my friend, require a lot of work and a lot of time.

Well obviously - it's always been end-of-life for consumers, businesses have always been able to pay for support after the end-of-life date for various past versions of Windows.

"Temporary support"

I doubt companies will use this to migrate. Might simply just stay on XP. They never used the cheaper costs of later versions of Windows to emigrate. They simply kicked up a fuss, complained its harder to migrate off XP than consumers and continued to do nothing.

McKay said,
I doubt companies will use this to migrate. Might simply just stay on XP.
Very likely such a cheap alternative ($2 million to $250,000, $85 million to $3 million are all quite ridiculous) comes with a rider about upgrading attached, as it should. Otherwise if the companies are unwilling to ever migrate from XP then they need a swift kick up their backside and Microsoft should jack up its prices significantly for every N months of delay.

Given the contract requires a documented plan (with dates) for migration to supported platforms, you won't see these simply as extensions to support. They're only used for bridges to get to supported environments, and if you don't have a plan to migrate before the end of your custom support contract, you won't get said contract.

It amazes me that businesses of this size are willing to pay hundreds of thousands of dollars for continued support on a 13+ year old operating system (and counting) to squeeze another year or so out of it. Why not plan ahead and put that money towards actual upgrades?

evacc44 said,
It amazes me that businesses of this size are willing to pay hundreds of thousands of dollars for continued support on a 13+ year old operating system (and counting) to squeeze another year or so out of it. Why not plan ahead and put that money towards actual upgrades?

Sometimes re-coding their propitiatory software can take longer than needed so they miss the deadline of when xp support ended.

torrentthief said,

Sometimes re-coding their propitiatory software can take longer than needed so they miss the deadline of when xp support ended.

So it taken them over 5 years to update their software? They should've known XP support was ending at least this long ago and Windows 7 was out by then.

evacc44 said,
It amazes me that businesses of this size are willing to pay hundreds of thousands of dollars for continued support on a 13+ year old operating system (and counting) to squeeze another year or so out of it. Why not plan ahead and put that money towards actual upgrades?

Most of the time IT managers can't do a thing about it if the decision to extend XP's support comes from above. Most board of directors or the management itself aren't really conscious about software obsolesce as long as it works, even when the cost of upgrading to a newer OS is lower than supporting XP for another year.

Time, costs....all have to do with it. Economy is not what it used to be and redesigning software to work with newer tech is not cheap or easy.

And I am happy businesses are willing to pay for extra support until their system is up to date. Better for their customers.

yowanvista said,

Most of the time IT managers can't do a thing about it if the decision to extend XP's support comes from above. Most board of directors or the management itself aren't really conscious about software obsolesce as long as it works, even when the cost of upgrading to a newer OS is lower than supporting XP for another year.

Agreed. People outside of IT tend to look at costs first as well. And if they dont understand what IT is trying to do, it gets denied. IT can only do/recommend so much and if it is not approved to spend the money, hands are tied.