It is not a new story that Microsoft is giving away free "Windows 10" to everybody. The shift in strategy of the Redmond company has been gaining momentum under the leadership of Satya Nadella.
Giving away the operating system for free may seems like a suicide strategy given how traditionally, the OS is one of the revenue generating products for Microsoft. The reason behind this is simple and it has been written over time and time again...
WINDOWS 10 on one billion devices.
|1 Billion Windows 10 Devices|
Getting Windows 10 onto one billion devices, (matching Apple's number on the iOS) is great but tough. Windows is a computer operating system, not a phone operating system and the era of PC's dominant has long gone.
Of course, the PC market is still huge and massive, about 270 million units per year, and for Microsoft to arrive at their one billion target is still very much a possibility and to do it, and do if fast, Microsoft is giving it away for free.
NEW LINE OF REVENUE
So, why Microsoft wants the one billion target if they are not going to make money from it. That is the problem Nadella answered....and they call it services.
Office 365, for example works better when a lot of people used it and it's a subscription based model. Instead of a one time fee, usually around $100 per copy, Microsoft will now gets $5.99 every month, which means after a year plus, the company will already generates more money than the old model.
This change has caused Microsoft to revamp their business model, and look for different ways to monetize Windows. The Windows Store is another example that Microsoft is working on. Let's not kid ourselves...it's still very much a baby product (look at how so many developers are turn off by it and you would know) but with more people engaging with Windows Store, the better it will become. It is still not relevant with most users as of now but Apple's Store is one example of it, and in its' recently announced holidays quarters, under "Services" which means App Store is worth $31 billion per year business.
Microsoft may not be in that league yet but Nadella definitely is eyeing some of that $31 billion of business.
With "Windows 10" for everyone, the higher chance will it be for Microsoft to achieve the similar success on this front.
I think Nadella may be even more ambitious than what most people have wrote about or talked about so far.....The idea of a Universal Apps, Windows 10 on 1 billion devices...sounds great but Nadella may have an eye on the mobile market. While Windows 10 mobile is a failure so far, Microsoft is engaging with more mobile users on Apple and Google's own homeground by developing more apps for iOS and Android.
|Windows embracing iOS and Android|
The effect of the engagement is strong and Microsoft is getting a lot of good reviews so far.
I think the idea is to have Windows everywhere....and when Windows Store is on par with both Apple's App Store and Google's Playstore, and a more matured Windows 10 OS, it's not that difficult to attract people to move over the Windows platform.
Microsoft's continued presence in the mobile market and the introduction of Surface will be a game changer. It's not going to be great at this point of time, but by making the engagement alive, they will reach there eventually, and the faster it is with one billion devices on Windows 10.
That's probably the reason why Nadella is not talking much about the mobile market at the moment.
CLOUD SERVICE THE MAIN AGENDA
If you look at it, all these changes are made possible because of the big revenue that kick in from cloud services at the moment.
And Microsoft will build on this. With all those apps available in iOS, Android, and also their own Windows store, Microsoft will definitely leverage on these engagements to encourage more subscription for their cloud services.
The 1 billion devices on Windows 10 will make it even easier for the company to grow their cloud business. I believe it will not be long before Microsoft take over Amazon on the cloud front in terms of market share.
Machine Learning, Hololens and IoT
It is perhaps one of those things that all technology companies are looking into but with one billion devices on Windows 10 and making Windows 10 a universal OS across different form of devices, Microsoft will be at an advantage.
The Hololens is one attempt by Microsoft in creating a new form or device. And the company is also working with car makers by leveraging on the existing Machine Learning capabilities that the company has.
ALL THE FREEBIES TO MAKE YOU LOVE WINDOWS
"We want to move from people needing Windows, to choosing Windows, to loving Windows," said Nadella at a recent press event for Windows 10. "That is our bold goal."
That love is lacking, and as Microsoft moves to what Nadella calls "Windows as a service," then the idea of operating systems becomes less relevant.
The future will be a battleground over services and apps that work across multiple devices and different form factors, and Nadella’s background in cloud seems to be influencing Microsoft’s moves here.
WHAT HAPPENS IF THE PLAN GOES WRONG?
Yes, all of those grand schemes look GREAT but Microsoft has the tendency of a big flop at times. Will this be one of it? What if they could not get to one billion devices? They have a target deadline to reach this number by 2018, and now they are already at 200 million devices.
But come July, a big decision will have to be made. Will Microsoft still be giving away "Windows 10" for free?
Speculations have been made on the several options that Microsoft has:
Any of the three options are possible and many are prediction Nadella to take the option 2 and gives another 6 months of free Windows 10 to get as many people as possible on board.
Microsoft's latest holiday's quarter report show signs of a Windows Store growth (has the engagement really been successful?), third party apps are great, cloud revenues continued the uptrend (despite a slowdown from Amazon), and the Surface line ups are doing great...will these be enough for Microsoft to make a comeback?
Let's see what happens on July 26, 2016!