Microsoft news: Microsoft warns on Windows 7 upgrade tool

Why not use the same approach it used to put Windows on a Mac to help ease the move from XP to Windows 7? They thought. The solution was elegant, helping users both make the move and even run older programs that weren't compatible with the new version of Windows. At first, the signs from Microsoft were encouraging; the company even invited Parallells to a Windows 7 momentum event in Paris to publicly talk about the program, Parallels Desktop Upgrade to Windows 7.

There was only one problem: the way the product works runs afoul of Microsoft's license rules, at least for most users. That's because the $50 software puts the user's old Windows XP system into a virtual machine, running alongside Windows 7, a concurrent use not allowed under most Windows licenses.

CNET raised the issue with both Microsoft and Parallels after learning about the product last month. Parallels said it is up to users to make sure they are in compliance with Redmond's terms. Microsoft, meanwhile, said it was talking with Parallels, but declined to publicly call out the company. Until now. "Microsoft does not endorse moving the user's desktop from a physically loaded OS into a VM as a consumer solution, because the vast majority (more than 90 percent) of consumers do not license Windows under a license that would allow them to transfer Windows into a virtual machine, move Windows to a different machine, or run a secondary virtual machine that is not running XP Mode on the same machine," Microsoft's general manager, Gavriella Schuster, said in a statement to CNET. "Without these license rights, most consumers will not be properly licensing Windows when using the virtualization features of Parallels' product."

"Parallels Desktop Upgrade to Windows 7 provides a simple and safe solution for Windows XP and Vista customers who want to successfully move to Windows 7 but may be overwhelmed by the process," said Parallels CEO Serguei Beloussov. "Whether people are upgrading an existing PC or moving to a new PC, all of their programs, files and user settings are automatically moved. Even programs not yet compatible with Windows 7 still work, so there’s no reason not to make the move."

"Microsoft does not endorse moving the user's desktop from a physically loaded OS into a VM as a consumer solution, because the vast majority (more than 90 percent) of consumers do not license Windows under a license that would allow them to transfer Windows into a virtual machine, move Windows to a different machine, or run a secondary virtual machine that is not running XP Mode on the same machine," Microsoft's general manager, Gavriella Schuster, said in a statement to CNET. "Without these license rights, most consumers will not be properly licensing Windows when using the virtualization features of Parallels' product." Schuster pointed out that enterprise customers with a Software Assurance contract covering Windows could properly use the software. Users who buy a full retail boxed copy of Windows (or possibly of both Windows XP and Windows 7), as opposed to the an upgrade version might also be properly licensed for the Parallels software.

Despite the legal issues, Parallels' upgrade tool would appear to address an important need. Although Windows 7 has proven popular, upgrading can be a hassle, requiring users to back up their data and programs, reinstall software, and then figure out what to do with programs that aren't compatible with the newer Windows.

Parallels, known for using virtualization to solve consumer problems, thought it had a surefire new use for its technology

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