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.
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.