Based on a recent event, Greg Shultz takes a look at what the free upgrade to Windows 10 might really mean.
In a recent article — "How much would a Windows 10 subscription cost?" — I took a look at the history of Windows pricing and speculated what a Windows 10 subscription might look like. At that time, I was working on the notion that when Windows 10 was released, we would be expected to pay the rental fee in order to get our hands on a copy of the new operating system. However, now we know that we're going to be able to get a copy of Windows 10 for free. More specifically, on a recent Blogging Windows post, titled "The next generation of Windows: Windows 10," Terry Myerson stated:
"We announced that a free upgrade for Windows 10 will be made available to customers running Windows 7, Windows 8.1, and Windows Phone 8.1 who upgrade in the first year after launch.*"
He then went on to say:
"This is more than a one-time upgrade: once a Windows device is upgraded to Windows 10, we will continue to keep it current for the supported lifetime of the device - at no cost."
When I first read this, I wondered what exactly was meant by the phrases "in the first year after launch" and "the supported lifetime of the device." I've pondered that question, and now, based on a recent event, I've come to what I think is a better understanding of what Microsoft is up to when it comes to Windows 10 pricing. Let me explain.
The vague disclaimer
Before we go any further, chances are that you noticed the asterisk at the end of that first quote, indicating additional information or a disclaimer of some sort. However, the asterisk references the following disclaimer:
*Hardware and software requirements apply. No additional charge. Feature availability may vary by device. Some editions excluded. More details at http://www.windows.com.
This doesn't really provide any additional information, and the link goes straight to the Windows home page, which also doesn't provide any additional information on the cost of Windows 10. Ultimately, the disclaimer is pretty vague.
The event that brought me back around to thinking about Windows 10 pricing and a possible subscription plan was when Microsoft filed for a trademark for the term Windows 365. You can see the actual filing document on the United States Patent and Trademark Office website.
Considering that Microsoft is already marketing their Office product subscription under the name Office 365, trademarking the name Windows 365 seems like a pretty good sign that Microsoft is making plans to set up a subscription plan for Windows too.
How this plays out
So, if a Windows subscription model is the ultimate plan, why wait? Why start out by giving away Windows 10 for free?
Well, to begin with, if you were Microsoft, what better way to keep your existing customers in the fold than to give them what they feel they deserve — a real upgrade of Windows 7 — for free.
After all, those Windows 7 users who moved to Windows 8 already paid for something better, but they didn't get it. So, chalk off Windows 8, and give them the Windows 10 upgrade at no cost. As far as the Windows 7 users who bypassed Windows 8 go, chances are that they probably wouldn't have paid to upgrade to Windows 10 anyway, so just give them the Windows 10 upgrade at no cost as well. After all, Microsoft really doesn't want to have to continue to maintain an operating system that has already reached the end of its mainstream support lifecycle. Making Windows 10 a free upgrade with Windows 7, 8, and 8.1 users really is a win-win situation for Microsoft.
What about Windows XP and Windows Vista users? Well, Microsoft hasn't explicitly said anything about how they'll get those users to move to Windows 10 yet. However, my guess is that after Windows 10 has been on the market for a while, Microsoft will come out with some sort of amnesty-like program, where XP and Vista users can get Windows 10 for $39.99 (USD) — just like they did for Windows 8 when it first came out. But this program will only be available for a limited time — most likely within the first year after launch.
Now we jump one year into the future... say August 2016.
At this point in time, the vast majority of Windows users are on Windows 10, updates have been coming out on a regular basis, the operating system is stable, and all of the other things that we heard about at the January 2015 Microsoft event have become a reality: Cortana has changed how we interact with our desktops, laptops, tablets, and phones; Universal apps work great on all these Windows 10 devices; Spartan surpasses everyone's expectations; Continuum Mode makes transitioning between laptops and tablets a dream come true; Microsoft Surface Hub is a terrific enhancement to collaboration in the enterprise; Xbox on Windows 10 really makes the Xbox Live gaming network an awesome feature on both Windows 10 PCs and Xbox One; and Microsoft HoloLens running with Windows 10 actually makes holograms a practicable tool — improving creativity and increasing productivity.
Everyone is happy. Microsoft has redeemed itself.
This will be when Microsoft rolls out the Windows 365 subscription plan. Since everyone is satisfied with their Free Year of Windows 10, and all the bad experiences with Windows 8.x are long lost memories, chances are good that hardly anyone will balk at signing up and paying for a Windows 365 subscription. Of course, the subscription version of Windows will come with all sorts of new features and enhancements that won't be available in Windows 10. Sure, some Windows users may decide to forego the new features in Windows 365 and stick with Windows 10. Microsoft will continue to the support Windows 10 for the lifetime of the device, just like they promised. After all, Windows 10 will be easier to support than a multitude of older versions. Furthermore, once devices running Windows 10 become obsolete, those users will eventually move up to the Windows 365 program.
How much is that?
How much will Microsoft gain by taking a loss with Windows 10? Well, to begin with, the good will that they earn will be priceless. When it comes to money, let's suppose that Microsoft decides to charge $99.00 per year or $9.99 a month for a Windows 365 subscription. If so, in its first year, Windows 365 would more than make up for the free year of Windows 10.
To speculate, let's go back to Office 365 for comparisons. In its first year, Office 365 Home Premium picked up 3.5 million paying customers. Since Windows is an operating system rather than an application, let's suppose that in its first year, Windows 365 picks up 7 million paying customers. If so, at $99.00 per year, that would be $693 million. At $9.99 a month, that would be $839.16 million. That's not a bad tradeoff.
What's your take?
What's your take on Windows 10 for free? What do you make of the Windows 365 trademark? Share your opinion in the discussion thread below.