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Free Windows? Not a chance

Gregg Keizer | Dec. 9, 2014
No 'loss leader,' says Microsoft COO; Windows 10 slated for release in late summer, early fall 2015.

Microsoft last week doused speculation that it would make Windows free across the board.

"We've not had any conversations [about] Windows 10 being a loss leader for us," Kevin Turner, Microsoft's chief operating officer, said at a technology conference sponsored by Credit Suisse on Thursday. "[But] we've got to monetize it differently. There are additional opportunities for us to bring additional services to the product and do it in a creative way."

Turner was short on specifics, but spelled out in general terms those opportunities, saying that new business models will allow the company "to monetize the lifetime of that customer" by selling them services and what he called "add-ons."

Most analysts have assumed that Microsoft will continue to expand its Windows-for-free practices to keep customers within its ecosystem, then sell them other products, including services and subscriptions, to make up the Windows revenue decline. Microsoft already gives away its Windows Phone OS and Windows 8.1 for devices with screens 9-in. and smaller, even subsidizes Windows 8.1 for OEMs' ultra-low-priced laptops.

In fact, Turner boasted of that strategy's effectiveness Thursday, calling out both inexpensive tablets and cheap notebooks, like Hewlett-Packard's HP Stream line. The latter relies on the subsidized Windows 8.1 for its $199 starting price. "You're seeing $200 laptops, you're seeing $99 Windows tablets, embracing and extending the ecosystem by lighting up some of these new business-model scenarios, allowing us to monetize the lifetime of that customer through services and different add-ons." Turner said.

Turner's dismissal of Windows as a "loss leader," however, won't preclude specific moves, especially on the consumer side that could include free upgrades to Windows 10 from Windows 8.1, or as a longer shot, from Windows 7, as well. But he implied that Microsoft will continue to charge OEMs for Windows licenses in most cases, its effort to crush Chromebooks with a underwritten-by-search OS notwithstanding.

More information on how Microsoft plans to reap revenue from Windows will be forthcoming soon. "The business model stuff will be out in probably the early part of 2015," Turner said.

As for the next Windows, which Microsoft has pegged with the version number of 10, skipping past 9 in an attempt to make customers forget the bad taste of Windows 8, Turner added that it would go public in the late summer or early fall of 2015.

"By next late summer and early fall we'll be able to bring out this particular OS," said Turner, referring to Windows 10. "That's the current plan of record."

Turner's timeline was in the same ballpark, although perhaps a tad later, than earlier public commentary from Microsoft, which had said mid-2015. The difference may have simply been semantics, or related to milestones.

 

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