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Microsoft takes extraordinary step, will give pirates free Windows 10 upgrade

Gregg Keizer | March 19, 2015
Deal is squarely aimed at China, where three-fourths of all installed software is illegal.

The free-to-pirates decision also meshes with the Redmond, Wash. firm's revamped monetization strategy, which deemphasizes licensing revenue in favor of a "freemium" model where, for consumers at least, software and services are handed out free of charge with the expectation that money can be made on premium levels of functionality.

"This whole model is predicated, not on the notion that someone will pay you before they get to use your products, but on the complete opposite, that almost every one of your products ... will have a free tier," said Chris Capossela, Microsoft's head of marketing, in an hour-long presentation Monday at the firm's Convergence conference in Atlanta.

"The model is based on an increased market share for Windows 10," said Silver. "[The free upgrade for non-genuine licenses] means more monetizing of the platform."

While Microsoft has not said when it will officially release Windows 10, the new summer timetable could be a boon if the OS is available to OEMs (original equipment manufacturers) in time to fill the channel with new devices for the U.S. back-to-school season, the second-biggest sales period of the year. Typically, new Windows editions have missed back-to-school.

Also today, Myerson announced new partnerships with several Chinese companies to distribute Windows 10 upgrades, including computer maker Lenovo; China's biggest social network, Tencent; and Qihu 360, a Chinese security firm also known for its 360 Secure Browser.

Lenovo will provide upgrade services at its 2,500 service centers in China, while Tencent and Qihu 360 will each directly offer the Windows 10 upgrade to their users. Both Tencent and Qihu 360 have huge numbers of customers in the People's Republic: 800 million and over 500 million, respectively, Microsoft said.

Those partnerships with major Chinese technology firms, and the aimed-at-China Windows 10 upgrade offer, stood in contrast to recent troubles Microsoft has had in the country. Last year, antitrust regulators there targeted the U.S. company with incompatibility and bundling allegations.

And in the fourth quarter of 2014, revenue from China was surprisingly weak, Microsoft admitted. "Our results in China and Japan fell short of our expectations," said CFO Amy Hood in a January call with Wall Street.

The problem with China, added CEO Satya Nadella, was due to "a set of geopolitical issues that we are working through," an allusion to the antitrust investigation.

 

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