Microsoft concedes that a loophole allows anyone to install an upgrade version of Vista, but could you take advantage? More to the point - should you? Well, not if you want to stay on the right side of Microsoft. And there's probably very little benefit in it for you anyway.

Microsoft's licensing terms and antipiracy measures for Windows started getting more complicated after it launched Windows Genuine Advantage two years ago, much to the chagrin of confused customers. But with Vista, Microsoft seems to have confused itself, creating a loophole for customers with a do-it-yourself attitude to save as much as £90 per copy of Vista.

Microsoft has confirmed circulating reports that anyone can buy and install an upgrade version of Vista, even on a computer without Windows XP or 2000 already on it.

How the trick works:

  • Boot with the upgrade DVD and begin the full install.
  • Do not enter the product key when prompted.
  • Choose to do a clean install of Vista.
  • Then boot into the still-unactivated copy of Vista.
  • Run Windows Vista setup again, from inside Vista.
  • Select upgrade, then enter your upgrade key
  • Install Vista a second time.

In essence, Vista is fooled into upgrading itself, thus allowing customers to avoid the need to have a prior copy of Windows installed. While time-consuming because of the double installation, advocates say this workaround not only allows you to do a fresh install of Vista, which should run more reliably, but can also save you money.

The difference between the full and the upgrade prices of Vista Home Basic was over £80 at the time of writing (£165 versus £83 inc VAT). For Vista Home Premium, it's nearly £60 (£187 versus £129 inc VAT). For Vista Ultimate, it's nearly £90 (£313 versus £205 inc VAT).

Is Microsoft crazy?

A Microsoft spokesperson said the company is "well aware of the workaround", which they added "violates the terms of use agreed to when they purchased the upgrade version of Windows Vista. As such, we believe only a very small percentage of people will take the time to implement this workaround and we encourage all customers to follow our official guidelines for upgrading to Windows Vista, which can be found at, instead."

Microsoft is right: the workaround will prove to be irrelevant. Most larger corporations buy Vista in volume licences, which are usually discounted. For consumers and small businesses, the vast majority will get Vista pre-installed when they buy a PC. Buying an operating system-free PC and then installing an upgrade version of Vista would probably cost more than buying a Vista PC. This is because of the low price Microsoft charges OEMs (original equipment manufacturers) to pre-install Vista, along with other discounts it offers.

Indeed, the types of person most likely to benefit from this workaround are power users and hobbyists who own multiple PCs running Windows as well as Linux and Mac OS X. These users may argue that they are such good customers of Microsoft that they should be allowed to save a little bit of money when Microsoft makes a mistake, as happens when a retailer honours an incorrect price.

But Microsoft remains officially adamant. The spokesperson noted that customers buying and installing an upgrade version of Vista on one PC forfeit the right to use their original copy of Windows XP on another PC – unless they own more than one full retail copy of XP.

"This is part of the end user license agreement the customer consents to by purchasing a retail upgrade version. We believe it strikes a fair balance for our customers, since upgrade versions allow them to purchase Windows Vista at significantly reduced prices," said the spokesperson. Only customers who pay for full retail versions of Vista "maintain the right to install their previous versions of Windows".