Microsoft is just now launching a real online store? Yep. It's still definitely a 1.0 experience—not a bad start, just very basic. You can buy meatspace goods like hardware, software discs and Xbox 360 games, but the kicker is that you can directly download software now, even Windows and Office. It seems wrong that the world's largest software company is just now really jumping into digital distribution, when someone like Valve has been doing it amazingly for the last few years. That said, I still wouldn't go the download route for Windows, for a whole lotta reasons, but mainly this one:
The obvious fear for most users buying ESD products is not having the software on physical media to re-install the product at a later time. Microsoft Store solves this by letting you re-download the product until mainstream support for the product ends. Typically this is 5 years after the product is released. You always have the option of copying the downloaded products to physical media if you want to have it available longer than the mainstream support lifetime.
When I buy a copy of Windows (or anything else), I expect to keep it forever—what if my older PC borks out and my cheap burned disc has degraded? Essentially taking away something I bought is no good, after five years or hell, ten years. On Steam, stuff is there to download forever, like a digital vault, which would make people feel safer about going all-digital. Also, when it comes to your whole OS, it just feels safer to have a hard copy in that lovely swinging plastic box. Updated post for clarity. [Microsoft Store via Trevin Chow via ZDNet]