Windows 10 Pricing
Some weird articles lately have speculated about Windows 10 pricing, with some suggesting it might move towards a subscription basis like Office 365. The problem there is that Office isn't available JUST on subscription. You can get the more traditional single PC installs without expiry in addition to varying subscription models.
Honestly, I don't think Microsoft will move to subscription based licensing for Windows. Too many implications, especially regarding what happens to personal information, etc... when a subscription expires. The other problems are perception, investors and the incompatibility of the approaches.
Like the always online debacle with Xbox One, a purely subscription based OS would likely elicit the same sort of backlash as it basically moves to make the OS an always online (or at least requiring regular check-ins). A move which in some ways they still haven't recovered from on the XB1 side of things.
Investors are the next reason. The same reason Microsoft has never even offered free upgrades between major versions in the past. Even though revenue from Windows is declining year over year, it is still a big part of their revenue model and the board and investors will likely fight any major overhaul to pricing. Pricing changes will come, but they will be slow and a move to purely subscription based is too big a move from the prior model at present.
The last reason is the value benefit for subscriptions which is perpetual updates. Office system requirements are unlikely to change much over time, so part of what subscriptions pay for is free updates. An operating system is a wholly different animal. Hardware requirements change and so too does the value proposition of an operating system. Windows 8 was a fabulous example. A lot of the investment and value in the OS was only apparent and in some cases even usable by touch enabled PC's.
We already get patches for free so no one is going to be able to justify a subscription for that. And, like Chromebooks and iPads there is a huge portion of the market in education, health and for those without the funds or means to pay for an OS on an ongoing basis.
Amusingly, despite all of that, I don't actually think it is a bad idea to use the Office model... if done right. Specifically the support for both traditional installs and subscription based. The other key is to bundle additional value in with the subscription model. And Microsoft is actually well positioned to do so. In fact, Office 365 is one thing right away that could be bundled. Office 365 subscriptions are soon to include unlimited One Drive storage which offers value even to those who don't use Office, but most would if it were included in their OS subscription. Another service they have that runs on PC's is Xbox Music Pass (in supported regions of course) which, where Office and unlimited online storage might appeal more to adults the music subscription helps net the even more important youth demographic.
Obviously, since I'm already a subscriber to both, if an OS subscription cost the same as both combined I would be on board in a heart beat. And, it isn't all that crazy financially when you think about it. For people like me who are already using both subscriptions they wouldn't make any money. But, realistically most people are using one, the other or neither. I would actually be shocked if the subsection of society signed up for both was sizeable at all. If, like Office 365 it could come in subscriptions that would work across multiple devices, and to address the compatibility issue granted access to prior versions of the OS it could make a lot of sense.
And now onto the speculative wish list.
One thing that would seal the deal for me would be access to a VM in the cloud with access to my One Drive data, Windows Store apps and perhaps even installs managed by me and that VM was accessible cross platform. Think about it. Your PC dies on you, so you grab your Android tablet and fire up the VM and pick back up from the last point you synced your data to One Drive. Working within a Windows VM, using the same software without barely missing a beat. Or you're on the road and only have a tablet or an Internet Café or whatever and you want to pick back up on something you're working on.
That sort of solution bundled in with a subscription would add tremendous value for a lot of people. Including professionals. For that I would even be willing to pay more than those other 2 subscriptions combined. And, as to the deactivation questions... simple. You have Windows specific value in the VM which you can simply shut down. They already have processes in place for Xbox Music Pass and Office 365 expiring. With the value of the actual OS dwindling, there is really no need to shut down local instances. Eventually, if not bundled with something else the OS would reach $0 anyway. At worst, you could just do the same thing the OS does today when it thinks it is pirated.
I think the value of O365 and Xbox Music Pass are things that many might get hooked on even if they just pay 1 month worth to get the OS update/install, but they could always offer to only sell it in larger terms like quarterly or annual subscriptions. That also enables them to be a little more aggressive on pricing.
A subscription that gives you nothing more than an OS and updates though, I don't think will ever be largely successful. I think something like less than 1% of consumers actually pay directly for Windows. Almost everyone runs OEM licenses that ship with their PC's and a small portion pirate OS's. So, people aren't likely to start forking over cash for something that they never explicitly paid for in the past. This would just drive the platform into the ground. Mac would take over within 1-2 years I think as the top PC seller.
With a new CEO it is a little harder to predict the future. But while I hope for something like the above subscription idea which would see the OS bundled with the great services MS can offer, I don't think we'll see it just yet and maybe never will. It is a move that really needs to be done before the OS price hits $0 "retail" or at the least is concurrent with it. Once the retail price hits free, even those who buy OS's likely won't pay for a subscription.
Honestly, I don't think Microsoft will move to subscription based licensing for Windows. Too many implications, especially regarding what happens to personal information, etc... when a subscription expires. The other problems are perception, investors and the incompatibility of the approaches.
Like the always online debacle with Xbox One, a purely subscription based OS would likely elicit the same sort of backlash as it basically moves to make the OS an always online (or at least requiring regular check-ins). A move which in some ways they still haven't recovered from on the XB1 side of things.
Investors are the next reason. The same reason Microsoft has never even offered free upgrades between major versions in the past. Even though revenue from Windows is declining year over year, it is still a big part of their revenue model and the board and investors will likely fight any major overhaul to pricing. Pricing changes will come, but they will be slow and a move to purely subscription based is too big a move from the prior model at present.
The last reason is the value benefit for subscriptions which is perpetual updates. Office system requirements are unlikely to change much over time, so part of what subscriptions pay for is free updates. An operating system is a wholly different animal. Hardware requirements change and so too does the value proposition of an operating system. Windows 8 was a fabulous example. A lot of the investment and value in the OS was only apparent and in some cases even usable by touch enabled PC's.
We already get patches for free so no one is going to be able to justify a subscription for that. And, like Chromebooks and iPads there is a huge portion of the market in education, health and for those without the funds or means to pay for an OS on an ongoing basis.
Amusingly, despite all of that, I don't actually think it is a bad idea to use the Office model... if done right. Specifically the support for both traditional installs and subscription based. The other key is to bundle additional value in with the subscription model. And Microsoft is actually well positioned to do so. In fact, Office 365 is one thing right away that could be bundled. Office 365 subscriptions are soon to include unlimited One Drive storage which offers value even to those who don't use Office, but most would if it were included in their OS subscription. Another service they have that runs on PC's is Xbox Music Pass (in supported regions of course) which, where Office and unlimited online storage might appeal more to adults the music subscription helps net the even more important youth demographic.
Obviously, since I'm already a subscriber to both, if an OS subscription cost the same as both combined I would be on board in a heart beat. And, it isn't all that crazy financially when you think about it. For people like me who are already using both subscriptions they wouldn't make any money. But, realistically most people are using one, the other or neither. I would actually be shocked if the subsection of society signed up for both was sizeable at all. If, like Office 365 it could come in subscriptions that would work across multiple devices, and to address the compatibility issue granted access to prior versions of the OS it could make a lot of sense.
And now onto the speculative wish list.
One thing that would seal the deal for me would be access to a VM in the cloud with access to my One Drive data, Windows Store apps and perhaps even installs managed by me and that VM was accessible cross platform. Think about it. Your PC dies on you, so you grab your Android tablet and fire up the VM and pick back up from the last point you synced your data to One Drive. Working within a Windows VM, using the same software without barely missing a beat. Or you're on the road and only have a tablet or an Internet Café or whatever and you want to pick back up on something you're working on.
That sort of solution bundled in with a subscription would add tremendous value for a lot of people. Including professionals. For that I would even be willing to pay more than those other 2 subscriptions combined. And, as to the deactivation questions... simple. You have Windows specific value in the VM which you can simply shut down. They already have processes in place for Xbox Music Pass and Office 365 expiring. With the value of the actual OS dwindling, there is really no need to shut down local instances. Eventually, if not bundled with something else the OS would reach $0 anyway. At worst, you could just do the same thing the OS does today when it thinks it is pirated.
I think the value of O365 and Xbox Music Pass are things that many might get hooked on even if they just pay 1 month worth to get the OS update/install, but they could always offer to only sell it in larger terms like quarterly or annual subscriptions. That also enables them to be a little more aggressive on pricing.
A subscription that gives you nothing more than an OS and updates though, I don't think will ever be largely successful. I think something like less than 1% of consumers actually pay directly for Windows. Almost everyone runs OEM licenses that ship with their PC's and a small portion pirate OS's. So, people aren't likely to start forking over cash for something that they never explicitly paid for in the past. This would just drive the platform into the ground. Mac would take over within 1-2 years I think as the top PC seller.
With a new CEO it is a little harder to predict the future. But while I hope for something like the above subscription idea which would see the OS bundled with the great services MS can offer, I don't think we'll see it just yet and maybe never will. It is a move that really needs to be done before the OS price hits $0 "retail" or at the least is concurrent with it. Once the retail price hits free, even those who buy OS's likely won't pay for a subscription.
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