Microsoft Corp. has significantly raised what it charges retail customers for technical support for its latest software, Windows Vista and Office 2007, while narrowing the help offered to users.
As of Jan. 30, customers who buy full retail copies of Vista and Office 2007 will get unlimited calls, e-mails and Web chats with Microsoft technical support during the first 90 days after activating the software. But after that period, customers contacting Microsoft for help with Vista will pay US$59 per incident, up from $35, according to Matt Fingerhut, general manager of consumer support for platforms and business applications. For technical assistance with Office, customers will pay $49 per incident, also up from $35.
Previously, Microsoft offered unlimited support to customers with problems installing Office or Windows for as long as they used the software, Fingerhut said. Customers also could get help on two additional support incidents of any kind for free. Customers with existing software who have not used up their free calls to Microsoft can still use them, Fingerhut said.
Fingerhut said that Microsoft realized last year that its support prices were lower than those charged by competitors, including Best Buy's Geek Squad, CompUSA's TechPros, Circuit City's Firedog and dedicated service providers such as PlumChoice.
"Our $35 price is at least a decade old," he said. "We were underpriced, both in terms of the value our customers felt they were getting, as well as the prices the third-party service providers were charging."
Even with the higher prices, Fingerhut said Microsoft "is barely in line with the lowest prices our competitors are charging."
For a new category of help calls Microsoft labeled "scenario-based assistance," Microsoft will charge $79 per incident. This includes more advanced assistance such as helping customers set up home networks, optimize operating system performance or install and run certain third-party hardware and software. Previously, such issues, if Microsoft could handle them, cost $35 per incident, said Fingerhut.
Problems with all other Microsoft consumer software, such as Money, will still cost $35 per incident to diagnose and fix.
"Microsoft is clearly setting the stage for what could be higher costs for support over time," said Paul DeGroot, an analyst with Kirkland, Wash.-based Directions on Microsoft, an independent research firm. But he added that complicated technical issues such as those that fall under "scenario-based assistance" probably merit their higher price due to their difficulty.
Caveats and exceptions
Microsoft will continue to help customers free of charge for issues related to security or viruses, as well as Windows Update/Microsoft Update.
The new, higher prices for support apply to all older software for which Microsoft still offers mainstream or extended support. That typically lasts 10 years, though Microsoft said last month it will extend support for Windows XP Home and Windows XP Media Center until April 2014, or almost 13 years after their first release.
As seemingly with any Microsoft policy change, there is important fine print. Most importantly, the prices only apply to consumers or small businesses who own full retail copies of Microsoft software. The vast majority of customers -- as many as 80 percent, according to a recent Microsoft financial filing -- get Vista pre-installed on their PC by the manufacturer. For all OEM software, customers should approach the PC maker for technical support.
An exception would be for customers who purchase a trial copy of Microsoft software that was pre-installed on their PC. They would then own a full retail copy of the software and would go to Microsoft for support, Fingerhut said.
Also, the policy changes generally won't affect mid-sized and large companies. They generally get volume licenses from Microsoft, and support contracts from the company or another provider. Also, the prices only apply to U.S. customers; prices may differ in other countries.
Value of support
Fingerhut said that Microsoft is not raising prices in response to protests from OEMs or retailers offering their own competing paid support services. "We weren't getting protests that we were undercutting them, though I was surprised we weren't," he said. Raising prices is "just the right thing to do."
He noted that customers with problems caused by bugs in the source code of the Microsoft software will get their money refunded.
Microsoft said in preparation for last week's Vista launch that "thousands of support engineers participated in training sessions ranging anywhere from a week to up to a month, and advanced training will start after release to further integrate our engineers' product and customer knowledge."
Fingerhut said his team's goal is to resolve problems on the first call. They are staffed up enough that even with the Vista launch, "to date there has been no waiting." Fingerhut said that the support team is made up of "Microsoft employees who oversee a large pool of support professionals, some of which is outsourced." He declined to comment on the percentage of customer support staffers that are full-time employees of Microsoft, or where they are located.