It's official: upgrade hack included in Vista SP1 The new Service Pack 1 version of Windows Vista allows end users to purchase the "upgrade edition" and install it on any PC — with no need to purchase the more expensive "full edition." The same behavior was present when Vista was originally released, but the fact that the trick wasn't removed from SP1 suggests that Microsoft executives approved the back door as a way to make the price of Vista more appealing to sophisticated buyers. Previous Windows version not needed for upgrade Just after Vista was first released to consumers on Jan. 30, 2007, an article in the Windows Secrets Newsletter explained that the upgrade edition of the operating system could be installed on a "clean" hard drive. For whatever reason, Vista had been programmed to accept itself as a "qualifying product." This eliminated any need for users to purchase the full edition of Vista or to upgrade Vista only over an older instance of Windows. The Feb. 1, 2007 , article by Windows Secrets editorial director Brian Livingston explained that the procedure is supported by several built-in dialog boxes. This indicates that the trick had been deliberately included by Vista's developers. To boost the sales of retail packages, Microsoft announced just over one month ago significant price cuts in Vista, beginning with Service Pack 1. The savings over the old prices vary among different Vista versions, such as Home Premium, Business, and Ultimate. In the U.S., the list price of the upgrade edition is at least $100 cheaper than the full edition. Smaller savings exist in other markets, such as Canada and the European Union, as shown in the table below. The price reductions on the Service Pack 1 version of Vista are even more significant because the upgrade trick still works in SP1, rendering unnecessary the purchase of Vista's full edition. Shortly after the hidden upgrade method was published, Microsoft officials publicly stated that the procedure would violate Vista's end-user license agreement. Section 13 of the Vista EULA ( PDF version ) says, "To use upgrade software, you must first be licensed for the software that is eligible for the upgrade." "We believe only a very small percentage of people will take the time to implement this workaround, and we encourage all customers to follow our official guidelines for upgrading to Windows Vista, which can be found at WindowsVista.com, instead," said a Microsoft press representative quoted in a News.com article on Feb. 14, 2007 . "Following these guidelines will allow customers to easily and validly upgrade to Windows Vista," he continued. Since that time, of course, Microsoft has had over one year to remove the upgrade back door before releasing the SP1 version of Vista. Livingston believes that the company must have consciously decided not to do so. "The fact that the upgrade edition will still upgrade over itself in Vista SP1 proves that Microsoft executives knowingly support the upgrade trick," he says. "I think the feature was deliberately included to make it unnecessary for more advanced and price-sensitive users to ever buy the full version. There is no ethical dilemma with people using a feature that Microsoft has specifically programmed into Vista." Ironically, the original release of Vista's upgrade edition was disappointing to many consumers. They'd been told by Microsoft that the Vista upgrade process would no longer accept the insertion of a disc containing an older version of Windows as proof that Vista was upgrading over a qualifying product. Instead, users heard from Microsoft that the Vista upgrade procedure must be launched while a copy of Windows 2000 or XP was actually running. The upgrade trick that Vista developers included, however, renders that requirement moot. A Vista upgrade disc will install and activate properly even on a blank hard drive that has never previously been used. Installing software from an original distribution disc to an empty hard drive, which is called a "clean install," is a best practice recommended by security organizations, such as NIST and US-CERT. Vista, unlike XP and previous Windows versions, doesn't make a clean install easy. The original Windows Secrets article contains step-by-step instructions on upgrading Vista in this way. In a nutshell, the procedure involves booting a PC from the Vista upgrade DVD. Next, a clean install is performed without the user entering the disc's product key or downloading any patches. Once this unactivated, trial version of Vista is running, the setup program is launched again — this time from within Vista. At this point, the "upgrade" option is selected, the product key is entered, and Vista can be activated exactly like the full edition of the product. Upgrading Vista on a clean machine works in SP1 Once Microsoft released the SP1 version of Vista, I tested the upgrade trick again to see whether the company had removed the feature. I used an upgrade disc of Vista Ultimate SP1 that I'd ordered at retail from Amazon.com. I repeated the original steps and found they work just as well on the SP1 version of Vista as they did on the old version. For PC users who are thinking about installing Windows Vista, the upgrade technique has even more value than it did last year. There are two reasons: 1. Quality. Vista SP1 is arguably a better product than the old, gold version of the operating system. SP1 includes 551 bug fixes, according to a white paper available from a Microsoft.com download page . The company claims in a press release that SP1 addresses security, reliability, and performance concerns with the older version of Vista. 2. Price. Whether or not you believe Vista was overpriced before, it's clearly a less-expensive product now than it was a year ago. As reported by Computerworld, the price cuts range from zero to 47%, depending on the country and the version of Vista. Table 1, below, shows that the upgrade edition of Vista is always cheaper than the full edition of the same version (Home Premium, Business, and Ultimate.) The figures are based on documents provided to Windows Secrets by Microsoft's public relations firm, Waggener Edstrom. The following table shows Microsoft's new suggested list prices and the percentage reduction from Vista's original prices. Street prices for Vista SP1 currently average about 10% less than suggested retail. Table 1. New Vista SP1 list prices and percentage reductions from the originals. United States (in U.S. dollars) Full edition Upgrade edition Vista Home Premium $ 239 ( 0%) $ 130 (–19%) Vista Business $ 299 ( 0%) $ 199 ( 0%) Vista Ultimate $ 320 (–20%) $ 220 (–15%) Canada (in Canadian dollars) Full edition Upgrade edition Vista Home Premium C$ 206 (–26%) C$ 113 (–26%) Vista Business C$ 253 (–27%) C$ 233 ( 0%) Vista Ultimate C$ 263 (–27%) C$ 243 ( –1%) United Kingdom (in pounds) Full edition Upgrade edition Vista Home Premium £ 103 (–27%) £ 50 (–47%) Vista Business £ 127 (–27%) £ 117 ( 0%) Vista Ultimate £ 132 (–44%) £ 122 (–21%) Euro Zone (in euros) Full edition Upgrade edition Vista Home Premium € 147 (–34%) € 81 (–46%) Vista Business € 201 (–28%) € 187 ( 0%) Vista Ultimate € 208 (–44%) € 194 (–21%) Vista upgrading over itself is no accident After all the publicity, the fact that the upgrade back door is still present in Vista SP1 is a strong indication that the feature has at least the tacit support of Microsoft officials. Indeed, the upgrade label on Vista retail packages, then and now, states that a "clean install may be required." There's no question that users who own a license for Windows 2000 or XP can legitimately save time and money by buying the upgrade edition of Vista and not having to first install the older operating system on a PC. Although a clean install of Vista's upgrade edition — without any prior purchase of 2000 or XP — may violate the Vista license, the result is clearly an installed copy of Vista that is indistinguishable from a full edition. The upgrade edition's lower cost, Microsoft's overall price cuts for Vista, and the fact that Service Pack 1 need not be downloaded and installed separately make Vista SP1 a somewhat better value for users who didn't buy the OS earlier. Get Vista upgrade, never pay full price Brian Livingston By Brian Livingston Many people are upset by the fact that the economical, "upgrade" version of Vista won't accept a Windows XP or Windows 2000 CD-ROM as proof of ownership. Vista Upgrade is said to install only to a hard disk that already has XP or 2000 already on it. But I've tested a method that allows you to clean-install the Vista upgrade version on any hard drive, with no prior XP or W2K installation — or even a CD — required. Save by avoiding the 'full' version Windows Vista, in my opinion, is a big improvement over Windows XP in many ways. But the new operating system is distinctly overpriced. The list price of the "full" (not "upgrade") version of the most expensive edition, Vista Ultimate, is $399.95 USD, with a street price around $380. That gold-plated retail figure is only possible because Microsoft long ago achieved monopoly pricing power in the PC operating system market. Most computer users would prefer to keep using an older version of Windows, such as XP, rather than paying the inflated prices for the "full" version of Vista. To encourage switching to a new OS, Microsoft has historically offered a lower, "upgrade" price to people who can prove that they've previously purchased an older copy of Windows. The difference between Vista's full and upgrade prices can be substantial. Based on the asking prices shown at Shopping.com on Jan. 31 — the day after the consumer version of Vista became available — the four most popular Vista versions will set you back approximately as follows: Edition Full version Upgrade version Vista Home Basic $192 $100 ($92 less) Vista Home Premium $228 $156 ($72 less) Vista Business $285 $192 ($93 less) Vista Ultimate $380 $225 ($155 less) The upgrade versions of Vista have street prices that are 32% to 48% cheaper than the full versions. If you're truly installing Vista over an old instance of XP or W2K, the upgrade version of Vista will find the older OS on your hard drive and install without question. The problem is that Vista, unlike every version of Windows in the past, doesn't let you insert a physical disc from an older operating system as evidence of your previous purchase. Vista has an undocumented feature, however, that actually allows you to "clean install" Vista to a hard disk that has no prior copy of XP or W2K. Use Vista's 'upgrade' version to clean-install The secret is that the setup program in Vista's upgrade version will accept an installed copy of XP, W2K, or an unactivated copy of Vista itself as evidence of a previous installation. This enables you to "clean install" an upgrade version of Vista to any formatted or unformatted hard drive, which is usually the preferred method when installing any new operating system. You must, in essence, install Vista twice to take advantage of this trick. But Vista installs much faster than XP, so it's quicker than installing XP followed by Vista to get the upgrade price. Before you install Vista on a machine that you don't know is 100% compatible, you should run Microsoft's free Upgrade Advisor. This program — which operates only on 32-bit versions of XP and Vista (plus Vista Enterprise) — reports to you on any hardware or software it finds that may be incompatible with Vista. See Microsoft's Upgrade Advisor page . Also, to see which flavors of XP Home, XP Pro, and 2000 officially support in-place installs and clean installs of the different Vista editions, see Microsoft's upgrade paths page . Here's a simplified overview of the steps that are required to clean-install the upgrade version of Vista: Step 1. Boot the PC from the Vista DVD. Step 2. Select "Install Now," but do not enter the Product Key from the Vista packaging. Leave the input box blank. Also, turn off the option Automatically activate Windows when I'm online. In the next dialog box that appears, confirm that you really do want to install Vista without entering a Product Key. Step 3. Correctly indicate the version of Vista that you're installing: Home Basic, Home Premium, Business, or Ultimate. Step 4. Select the "Custom (Advanced)" install, not the "Upgrade" install. Step 5. Vista copies files at length and reboots itself one or more times. Wait for the install to complete. At this point, you might think that you could "activate" Vista, but you can't. That's because you haven't installed the Vista upgrade yet. To do that, run the DVD's setup.exe program again, but this time from the Vista desktop. The easiest way to start setup again is to eject and then reinsert the DVD. Step 6. Click "Install Now." Select Do not get the latest updates for installation. (You can check for these updates later.) Step 7. This time, do enter the Product Key from the Vista packaging. Once again, turn off the option Automatically activate Windows when I'm online. Step 8. On this second install, make sure to select "Upgrade," not "Custom (Advanced)." You're not doing a clean install now, you're upgrading to Vista. Step 9. Wait while Vista copies files and reboots itself. No user interaction is required. Do not boot from the DVD when asked if you'd like to do so. Instead, wait a few seconds and the setup process will continue on its way. Some DOS-like, character-mode menus will appear, but don't interact with them. After a few seconds, the correct choice will run for you automatically. Step 10. After you click a button labeled Start in the Thank You dialog box, Vista's login screen will eventually appear. Enter the username and password that you selected during the first install. You're done upgrading to Vista. Step 11. Within 30 days, you must "activate" your copy of Vista or it'll lose functionality. To activate Vista, click Show more details in the Welcome Center that automatically displays upon each boot-up, then click Activate Windows now. If you've dismissed the Welcome Center, access the correct dialog box by clicking Start, Control Panel, System & Maintenance, System. If you purchased a legitimate copy of Vista, it should quickly activate over the Internet. (You can instead activate by calling Microsoft on the phone, which avoids your PC exchanging information with Microsoft's server.) I'm not going into detail today on the merits of buying Vista at retail instead of buying a cheaper OEM copy. (The OEM offerings don't entitle you to call Microsoft for support, while the retail packages do.) Also, I'm not touching here on the least-expensive way to buy Vista, which is to take advantage of Microsoft's "educational" rate. I'll describe both of these topics in next week's newsletter. Why does Vista's secret setup exist? It's reasonable for us to ask ourselves whether buying an upgrade version of Vista, and then installing it to an empty hard disk that contains no previous version of Windows, is ethical. I believe it is. Microsoft itself created the upgrade process. The company designed Vista to support upgrading it over a previously installed copy of XP, W2K Pro, or Vista itself. This isn't a black-hat hacker exploit. It's something that's been deliberately programmed into the approved setup routine. Microsoft spent years developing and testing Vista. This upgrade trick must have been known to many, many people within the development team. Either Microsoft planned this upgrade path all along, knowing that computer magazines and newsletters (like this one) would widely publicize a way to "save money buying Vista." Or else some highly placed coders within the Vista development team decided that Vista's "full" price was too high and that no one should ever have to pay it. In either case, Vista's setup.exe is Microsoft's official install routine, and I see no problem with using it exactly as it was designed. We should also think about whether instances of Vista that were installed using the clean-install method will continue to operate. I believe that this method will continue to be present in Vista DVDs at least until Microsoft begins distributing the Service Pack 1 edition of Vista around fall 2007. Changing the routine in the millions of DVDs that are now in circulation would simply be too wrenching. And trying to remotely disable instances of Vista that were clean-installed — even if it were technically possible to distinguish them — would generate too many tech-support calls and too much ill will to make it worthwhile. Installing the upgrade version of Vista, but not installing over an existing instance of XP or W2K, probably violates the Vista EULA (end-user license agreement). If you're a business executive, I wouldn't recommend that you flout any Windows license provisions just to save money. If you're strictly a home user, contributing editor Susan Bradley points out that Microsoft's so-called Vista Family Discount (VFD) is an economical package that avoids any license issues. If you buy a retail copy of Vista Ultimate, MS lets you upgrade up to two additional PCs to Vista Home Premium for $50 each. For example, if you buy the upgrade version of Ultimate for $225, the grand total after you add two Home Premiums is $335. That's about $133 less than buying three upgrade versions of Home Premium. Details are at Microsoft's VFD page . Microsoft did revise a Knowledge Base article, number 930985 , on Jan. 31 that obliquely refers to the upgrade situation. It simply states that an upgrade version of Vista can't perform a clean install when a PC is booted from the Vista DVD. A clean install will only work, the document says, when the Vista setup is run from within an older version of Windows (or if a full version of Vista is being used). This article doesn't at all deal with the fact that the Vista upgrade version will in fact clean-install using the steps described above. It'll be interesting to see whether MS ever explains why these steps were programmed in. Personally, I consider Vista's ability to upgrade over itself to be Digital Rights Management that actually benefits consumers. It's almost cosmic justice.