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Microsoft's big decision: Who gets a free upgrade to Windows 10?

Gregg Keizer | Jan. 6, 2015
'Single greatest test' for 2015 is whether it can charge consumers for its OS, says analyst.

While there's nothing to stop Microsoft from charging historical prices for Windows 10 upgrades -- roughly $100 for a consumer edition, $200 for one aimed at businesses -- in light of giving corporations like HP a free ride, the backlash would almost certainly be fast and furious. With Windows free elsewhere, even the aggressive discount prior to the release of Windows 8 three years ago, when Microsoft charged customers $40 per license, would come across as squeezing coin from the villagers while leaving the aristocracy untaxed. The last thing Microsoft needs is another "I-hate-Windows" groundswell, this one triggered by customer class warfare.

Secondly, Turner made clear that everything is up for grabs. His words must be taken seriously, as Microsoft rarely if ever reveals anything it doesn't want to reveal.

In early December, Turner said "We've got to monetize it differently," referring to Windows, and then stressed that the new business models would "allow us to monetize the lifetime of that customer through services and different add-ons (emphasis added)." If that doesn't sound like a freemium strategy, analogous to in-app purchases on a smartphone, we don't know what does.

And finally, there's Windows 10 itself.

When the company's top operating system executive Terry Myerson unveiled Windows 10 in September, he said, "We're not building an incremental product," to stress that 10 is a big break from the past. (Skipping "9" was another clue.) Although his assertion could reflect any number of things, including the merging code base of Windows, much about the new OS will be radically different than the Windows of the past. WIndows 10 will have a much faster update cadence -- which some believe will make it impossible for Microsoft to charge for updates, even major ones that previously would have been labeled "upgrades" -- and retain the moniker for many more years than the usual three.

It's all about the price
That last means Microsoft must get the pricing right at the start or face more backtracking, something it should be loath to do, what with the backpedaling from Windows 8 in the last two years.

Altogether, the evidence points to a rethinking of Windows 10, including its pricing. But what are Microsoft's options?

Dawson laid out three.

Option A: Free upgrade from Windows 8.1 seems like a lock. "This would be mostly about pacifying those users," said Dawson, referring to the complaints lodged about Windows 8 and even Windows 8.1, like the lack of a Start menu, and a reluctance to try "Modern," née "Metro," apps.

Option B: Free upgrade from older versions of Windows may be a stretch, but a free deal for Windows 7 would almost instantly boost the user share of Windows 10, where customers could be monetized through app and service purchases.


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