Today Microsoft announced a promotion where anyone who upgrades from Windows XP/Vista/7 to Windows 8 in the fall can pay a reduced price of $39 (typically Windows upgrades have cost $120 or so) if they do so before January 2013.

I have to think they are doing this for 2 reasons:

1) They need Windows 8 to be a success.

Memories of Vista are still fresh in Redmond. They want hardware and software makers to make things for Windows 8. The new Metro interface is pointless if everyone just develops for old school Windows and people just ignore the Metro start screen. How do you get software developers on board? Boast about how many users there are. And to get a ton of people to upgrade? Make it cheap.

2) Competition from Apple

Apple is charging $19 to upgrade to Mountain Lion later this month. For Microsoft to continue to charge around $120 in comparison would seem to negate the whole “Mac Tax”/Macs are more expensive argument. (Despite the Windows 8 upgrade being much more significant than Mountain Lion)