However, the software vendor will still offer six editions of the upcoming operating system altogether. Mike Ybarra, Microsoft's Windows general manager, said the various versions are necessary in order to fully meet the needs of PC makers and the huge base of Windows users.
"We did a lot of research and talked to a lot of [hardware] partners and customers," Ybarra said. "Our biggest challenge is that we have over 1 billion customers. It's hard to satisfy all of them [with two versions]."
Windows 7 Professional will be the principal version for businesses, with a Home Premium edition as its peer on the consumer side. That hearkens back to Microsoft's licensing strategy for Windows XP, which similarly had two main editions.
But like its predecessor, Windows Vista, Windows 7 will also be available in an Enterprise edition for large corporate customers with volume licensing agreements. That version will include advanced networking and security features that won't be in the Professional edition, Microsoft said.
Ybarra said Microsoft considered cutting the Ultimate edition, aimed mainly at gamers and PC enthusiasts. But PC vendors wanted that version to be kept because they see it as a way to differentiate their systems.
Separately, Microsoft said it will offer upgrades from the seven-year-old XP to Windows 7. But that simply means users will be able to buy discounted upgrade licenses; XP machines would require clean installations of Windows 7, meaning their hard drives would be overwritten.