Answering widespread and long-time pleas for a family pricing option for Windows Vista, Microsoft today announced its Windows Vista Family Discount program, which allows Vista customers to inexpensively upgrade two other PCs in their home to the new OS. The program comes with a number of restrictions, however, and is limited only to Windows Vista Ultimate.

When I was first briefed about this offering in November 2006, Microsoft told me that its family pricing program would have to be somewhat restrictive and might therefore not meet the needs of all users. The problem, apparently, is that the family pricing program can't be seen as a lower-cost offering than the company's business-oriented volume licensing programs.

And sure enough, the Vista Family Discount program is both cost-effective and limiting. Customers who purchase Windows Vista Ultimate, the most expensive Vista version, at retail will be able to upgrade two more PCs in their home to Vista Home Premium for $49.99 each. The program is limited only to the retail versions of Vista Ultimate--both Upgrade and Full versions--and is available only for a limited time: January 30, 2007 to June 30, 2007. However, Microsoft says it will gauge consumer reaction to the program and determine whether to extend it beyond those dates.

In addition to the Vista Family Pricing option, Microsoft also announced pricing for the Windows Anytime Upgrade, which allows Windows Vista Home Basic, Home Premium, and Business customers to upgrade electronically to higher-end Vista versions. Pricing is as follows:

- Vista Home Basic to Home Premium $79
- Vista Home Basic to Ultimate $199
- Vista Home Premium to Ultimate $159
- Vista Business to Ultimate $139

Finally, Microsoft also revealed this week that it will make Windows Vista Home Basic, Home Premium, Business, and Ultimate available for purchase electronically via the Windows Marketplace Web site. This new purchasing option will be made available in addition to the more traditional ways in which Windows is offered, bundled with PCs and in store-bought retail packaging. Microsoft Office 2007 Home and Student, Professional, and Standard editions will also be made available for purchase via Windows Marketplace, Microsoft says.