Microsoft Explores New Windows Monetization Methods, Could Introduce Subscription

Since the first version of Windows, Microsoft has offered the operating system on a initial fee purchase. But under new management, it seems that this strategy could shift into new monetization methods, a subscription-based model being the most probable one.
windows subcription
At the recent Credit Suisse Technology Conference from last week, Chief Operating Officer Kevin Turner was speaking to investors about the fact that Microsoft is interested in exploring new monetization methods for its Windows line of products. The company might adopt a new pricing model for the upcoming operating system, as it looks to shift away from the one-time initial purchase to an ongoing-revenue basis.

Turner said the following, when asked by Phil Winslow whether they ‘are going to start losing money on Windows‘:

We’ve got to monetize it differently. And there are services involved. There are additional opportunities for us to bring additional services to the product and do it in a creative way. And through the course of the summer and spring we’ll be announcing what that business model looks like. At the same time it’s wonderful to see these nine-inch and below devices explode, because that was an area, candidly, I was blocked out and I had no share of what was getting built. So it’s a very fascinating transition for us.

So, as we can see it from Microsoft’s COO itself, we will find out through the course of the summer and spring what that new Windows business model will look like. This could mean that Nadella and his team has already decided which path to take.

There have been previous rumors that have already pointed toward the creation of Windows subscriptions, and Turner’s intervention also points at some kind of subscription system for the world’s most popular operating system. However, at this moment, we can only speculate regarding the price and the frequency of upgrade cycles.

But what’s almost sure is that Windows 10, which is already promoted by Microsoft as ‘one Cloud OS’, will be the first to fall under this new pricing scheme. Microsoft also needs to lure in hundreds of millions of Windows 7 and Windows XP users who didn’t perceive Windows 8 and 8.1 as good enough to make the jump.

Microsoft has already taken another ‘shocker’ decision, when it has decided to make its Microsoft Office products available for free to mobile users on iOS and Android, as well. Free seems to be a good and new strategy for the company, as it has offered Windows for free on phones and small screen tablets, and there’s also a Bing edition for everything else.

For three decades now, Microsoft has sold operating system licenses to both end users and OEMs through one-time fees or as part of yearly subscriptions like Office 365. But consumer technology is evolving rapidly these days, and it’s becoming more affordable. So if Microsoft wants to stay ahead of the game, this new pricing scheme should focus on the consumers, first of all.

READ ALSO: Top 10 Keyboards to Buy for Windows 8.1, Windows 10

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  • TM_D

    What a brilliant idea. “Pay us every month or your computer stops working” Redmond has just decided to productize Ransomeware!

    • But what if it costs $9.99 per year?

      • Chris Bowen

        What if it does? It is still ransomware. It may soon be the year of the linux desktop after all.

        • The average Joe doesn’t know too much about Linux

          • Chris Bowen

            Well they did not know much about windows at one point either. That they have been using unix/linux in most of their tablets and phones for a while now may help.

            • Let’s see, but I don’t see Linux becoming a commercial solution anytime soon.

              • Chris Bowen

                It is already a commercial os solution. Now if you narrow it to desktops sure, but it has been a massively commercial success on servers for quite a while now.

              • Ryan

                I agree. Most enterprises in the real world are tied to the Microsoft ecosystem. Including various Windows workstation and server OS’s, MS Office suite, Active Directory domains, some of the enterprises that use Lync, and some software only compatible with Windows from some software vendors (there are plenty that are modern and not written for Linux or even Mac)

                I’m sure most of these excuses to stick with Microsoft could be countered and switching to Linux. A complete Migration to Linux on workstations and servers, along with LibreOffice, Thunderbird (email client software), a business chat client replacement for Lync, and other Linux software counterparts would take a lot of time and money and work to support too. Not to mention, retraining costs for the average users so used to using the Microsoft products in the real world. Most don’t like change either and it’s big change.

                I’m not against Microsoft products, I like them. Both have their good points. But I like Linux for the reasons of: open source, free (as in beer), relatively more secure by default (add to the fact not many written viruses are targeted for the Linux platform), very customizable to your liking, and can run on a wider variety of computers new and old (some distros that are modern are still available with lower system requirements than the latest Windows)

      • TM_D

        $10/year for 4-5 years (the rough average between MS OS releases)? That’s about $50. Which means they have been RIPPING US OFF for decades by charging 2-3 times that for past OSes. No reason to see them changing their pricing now. So, no, no way in hell Redmond will let their new product go for that.
        And even if they did, it’s STILL Ransomware.

        • Ok ok, I get your point 🙂 But if it was 10$ to upgrade from Windows 7, XP to Windows 10?

          • TM_D

            One time price? No strings? No follow on cost? If Win X is good, possibly. Windows 7 works just fine. Subscription Operating System == Ransomware. What I buy, I OWN.

            • Ryan

              Even with a software license you purchase from Microsoft, you don’t “own” it. Even with what is technically a one-time lease cost of the operating system. You don’t own it as in that you can’t edit the source code, supposed to abide by the other End user license agreements that Microsoft does too.

              A subscription is different than a one-time lease license. A subscription is that you pay monthly or yearly and when subscription expires and isn’t paid to be renewed, your software stops functioning. One-time lease licensed software never works this way as for the Windows 7 license you have. Sure, even when support for Windows 7 ends on January 2020, you can still use it forever, just no infinite support.

              Same logic works for other software vendors and product lines.

              • Guest

                I think TM_D meant that the 4-5 years in between was When Windows XP came out in October 2001 and Vista came out January 2007. That’s a rough 5 years in between both releases and no other version in between. But you’re correct, no other Windows version has been released every 4-5 years (hardly the “rough average” as TM_D mentions)

        • Chris Bowen

          Actually MS releases a new OS every 2.5 years on average

          • Ryan

            I agree with you, but, I think TM_D meant that the 4-5 years in between was When Windows XP came out in October 2001 and Vista came out January 2007. That’s a rough 5 years in between both releases and no other version in between. But you’re correct, no other Windows version has been released every 4-5 years (hardly the “rough average” as TM_D mentions)

      • capitalist_pig

        No way. Office costs $99 a year. No way it is going to be 1/10th as much.

  • ZoubIWah

    if anything that will make me keep win7…. win7, the new winxp.

  • agwidiots

    I will move to apple before I pay a monthly fee just to have an operating system.

    • LockeCole

      Move to Linux and don’t worry about spending money on a shiny logo.

      • agwidiots

        I have Linux there is a reason its free .

  • Tom72

    After fighting Windows 8.1 boot / repair loop that required several re-installs over the course of 6 months, I swithced Open SUSE 13.2 and have been very happy with it ever since.

    • Tom72

      Besides technical issues, you have to take into account total cost of ownership with Windows – you’ll need antivirus, CCleaner, Malwarebytes and whatnot.

  • Vioetr

    And piracy will rise once more….

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  • capitalist_pig

    So new PCs will come with 3 month trial of Windows and then you will have to buy the subscription to keep it going ? Like they do with Norton or Mcafee today ?

    Arghhh …

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