Next week, Microsoft is hosting an event in San Francisco — ostensibly to unveil the new Windows operating system and most likely launch some sort of technical preview. We don't yet know if it will be called Windows 9, Windows Threshold, or simply Windows, but no matter what the official moniker of the new OS, the price for upgrading to it should be free.
You can thank mobile devices in general, and Apple specifically, for the shift in OS pricing. When the latest version of iOS or Android is released, the issue of cost never comes up. It's simply expected that the upgrade will be free.
The culture of free upgrades on mobile devices was driven in large part by Apple, and Apple is also the company that extended that model to its desktop OS. Apple was already providing new versions of Mac OS X at a fraction of what Microsoft was charging customers to upgrade to the latest Windows release, but last year, when Apple launched Mac OS X "Mavericks," it also made the upgrade available for free.
That's a tough act to follow. Mac OS X is certainly not an existential threat to Windows, but it has gained much more mainstream relevance and has been chipping away at Microsoft's share of the desktop OS market. Microsoft can't really just ignore the fact that Apple is offering Mac OS X upgrades for free and then continue charging hundreds of dollars for the latest version of Windows.
A free OS takes the wind out of the sails of most complaints. One of the biggest protests users have about upgrading isn't the operating system itself, it's the idea that they're being "forced" to upgrade just to line Microsoft's pockets. There will still be valid issues with any operating system — you can't please everyone — but the vitriol would be greatly reduced if no money exchanges hands. Customers will give Microsoft a lot more leeway and be much more forgiving if the latest version is free.
Operating system adoption is also subject to inertia. When a new version of an operating system is launched, the more people download and install it and the greater market share it wins, the more likely it is that more people will continue to download and install it. If the OS upgrade is available for free, it's much more likely that demand will be higher, and this becomes a self-feeding circle that drives adoption.
More importantly, though, Microsoft doesn't need to charge for Windows upgrades. Technology changes over time. Hardware crashes and dies. There will be customers who will cling to their 10-year old hardware, but many will still buy new PCs to replace broken hardware, get a faster processor, or take advantage of the latest USB or Wi-Fi standards. Microsoft should provide free upgrades to the latest version of Windows for existing owners of licensed copies of Windows but still continue to charge OEM manufacturers for installing the OS in new PCs (Microsoft does give the Windows OS away for free for devices with screens smaller than nine inches).
There will be natural lines in the sand that force the issue as well. The latest versions of iOS and Android are free for those with existing iOS and Android devices, but they aren't available for all existing iOS or Android devices. iOS 8 is only compatible with the iPhone 4s and newer, the iPod Touch 5th generation and newer, and the iPad 2 and newer. Anyone with an older iOS device must now replace their hardware in order to get the benefits of the latest OS.
Microsoft is a company, and it exists to bring in revenue and provide value to shareholders. It's not operating a non-profit corporation. Microsoft has to be smart, though, and pick its battles. It has a vested interest in ensuring that as many businesses and consumers around the world continue to depend on the Windows OS so that it can sell its other products and services — and it can help that cause by providing Windows upgrades for free.
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Tony Bradley is a principal analyst with Bradley Strategy Group. He is a respected authority on technology, and information security. He writes regularly for Forbes, and PCWorld, and contributes to a wide variety of online and print media outlets. He has authored or co-authored a number of books, including Unified Communications for Dummies, Essential Computer Security, and PCI Compliance.