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Apple plays defense and offense with free software, upgrade strategies

Gregg Keizer | Oct. 29, 2013
Keeps iPad in the enterprise (defense), disrupts Microsoft's model (offense), say analysts

"PC software and services like Windows upgrades and Office will continue to look more expensive year after year," Moorhead said in a piece published on Techpinions.com last week.

It will take time for customers to digest that, Moorhead cautioned, but they eventually will. "Over time, I believe buyers will be less likely to pay as much as they do today for PC software, look more closely at the alternatives," he wrote on Techpinions. "This creates a big challenge for Microsoft."

Not everyone agreed. Ross Rubin, of Reticle Research, sees little threat to Microsoft -- either short- or long-term -- from Apple's shift to free software and OS upgrades.

"There's discrete value in the larger releases," Rubin said of major Windows upgrades, such as the one from Windows 7 to Windows 8.1, which currently costs about $115 on Amazon.com. "Microsoft will continue to make the case that, 'We charge for Windows because there's premium value associated with it.'"

That's not to say Microsoft won't give away software: It did just that with Windows 8.1, a free update -- and Microsoft made a point to dub it an "update" rather than an "upgrade" -- for customers running Windows 8.

In fact, Rubin believes that Apple's decision to offer OS X Mavericks free was at least partly a reaction to Microsoft's Windows 8.1.

Not so, countered Milanesi, who said both companies were simply tackling the same problem -- the mindshare of mobile and its now-entrenched practices, strategies and business models -- each in its own way.

"Microsoft can't do what they used to do," Milanesi argued. "[Windows 8.1 being free] was a necessary change for Microsoft because their entire approach to computing is changing."

 

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