The remaining four versions are divided as follows:
Consumer market – Home Premium and Ultimate as the updated version
Business market – Professional and Enterprise as the updated version

They further claim there are no real difference between ultimate and enterprise, only the name.

Starter? Come on Microsoft! I sounds like a baby Windows 7! A “Windows 7″ that in fact is Windows 2000 with a new skin! Netbook edition? A hole lot better! Now it sounds like this edition has been optimized for working better on small screens and slow CPU-s.
Home basic? Even if Home premium is…… ok….. Home basic? To me it sounds like a mentally-challenged-optimized-home-premium! If they really want it it could be like Windows Netbook edition plus! Like an upgrade! Home basic? Come on!
Ultimate? Yeah, it’s ultimate. It’s brand-new. What matters is not how new or freshly-redmond-packed is, it matters the power it packs in! They need to make costumers that know nothing about computers figure out what’s the best without asking a buy assistant! To me Proffessional beats Ultimate! Try imaginating a MacBook Ultimate! What do you imagine? Something new, right? But not necesarilly more powerful than the pro. Something like the pro + some bugfixes. We’re triyng to make people understand that ultimate is the best! Not just something new! To me it”s fantastic how PC-s try to copy all the work Apple did in this years. They now have also iSights. They also have multitouch. HP even incorporated a lame hard drive protection system! Lame because it’s an accelorometer, not a sudden motion detector. It detects slower the motion. As Steve said in one WWDC, there may be copies, but nothing is better than the original! Take that, Microsoft!

So…
WRONG: Starter, Home Basic, Home Premium, Professional, Enterprise, Ulitmate
WRONG: Windows 7
RIGHT: Starter, Premium, Elite, Enterprise

There are three clear markets MS could separate out: 1. Mobile and Netbook machines, 2. Home AND Business – this version should be the same damn thing for all users with the same features for everyone, and finally 3. Server. THAT’S IT. Call them Windows Basic, Windows Professional and Windows Server, price them accordingly and get on with it. There is NO excuse or argument for any further versions.

GET IT DONE!

The number is the same, but they are most certainly better than before:

- Vista Starter is S-L-O-W on a netbook, hence them all running XP (or Linux). 7 Starter will change that (for that matter, Home Premium reportedly runs acceptably on netbook hardware as well).

- Vista Home Premium and Business made you give up features to go from one to the other. 7 Home Premium is a subset of the new 7 Professional (there is no Business), so if you move to Pro you get everything in Premium in addition to new features.

“Windows 7 is Vista, only better!”

Yes, Windows 7 truly is Vista 2. It’s a better implementation, by far, but it”s still Vista. Vista wasn’t all bad, mind you, just a lot of it. Even though I don’t think for a moment it will replace Leopard, let alone Snow Leopard, it is still the best that Microsoft has achieved in any OS. They copied from OS X, like they did with the new task bar, but they also added to it their own unique touch. I hope Apple does likewise?

Vista sucked big time; but Windows 7 sucks less, and as such, I will probably add it as a secondary or guest OS when it comes out.

It’s a different model yes, but selling the same thing at different prices for different markets still makes sense. After all, I think most people will agree that with Linux on these cost next-to-nothing notebooks people are going to realise it’s actually pretty good, and they don’t need all the Windows-only crap-ware they thought they did. If that chunk of the market share goes it may not only steal from others, it may be lost forever.

I don’t see why Dell would complain about getting a discount either, even if it’s just on part of their range. It’s still a discount and it’s there to “help Dell make the margins on the latest and greatest emerging market”. Obviously the reality is that it’s there to keep people using Windows on every platform.

To your second point: Microsoft and Adobe among many others give away software every day. When you price software as insanely as these guys do you know you are driving millions of people to pirate your product, not buy it. That’s Adobes business model (drive the kids to pirate, learn it, get a job using it and force the boss to buy it). It’s called “taking one for the team”. If you can afford to give 1 million copies away for netbooks then people will want another million copies at low cost for their desktops and another million at insane cost at work because it’s just easier when it’s all the same.

That’s how I look at it anyway. It’s the Wil Shipley marketing tactic and it’s working pretty well so far.