Lately, Microsoft has been offering Windows at steep discounts or free of charge to increase its presence in low-cost notebooks, tablets, and smartphones. Does this mean the operating system's future is as a loss leader for the company?
As GeekWire reports, that very question was asked at the Credit Suisse Technology Conference last week. Microsoft COO Kevin Turner provided an interesting answer that strongly hints at a new business model for the next version of Windows.
According to the official transcript, Turner was actually asked the same question twice. The first time, he replied, "We haven’t announced the Windows 10 pricing framework yet. The one thing I can tell you that we've not had any conversations on is Windows 10 being a loss leader for us."
When asked again, Turner got into a little more detail:
The thing about it is, though, we’ve got to monetize it differently. And there are services involved. There are additional opportunities for us to bring additional services to the product and do it in a creative way. And through the course of the summer and spring we’ll be announcing what that business model looks like. At the same time it’s wonderful to see these nine-inch and below devices explode, because that was an area, candidly, I was blocked out and I had no share of what was getting built. So it’s a very fascinating transition for us.
And finding new ways to monetize the lifetime of that customer on those devices, again, I would tell you we’re learning, we’re growing, and we’re smarter and wiser every day. And we still have some more learning and growing to do in that space. But, stay tuned. The business model stuff will be out in the early — probably the early part of 2015.
Ars Technica suspects that Microsoft could be eyeing a subscription-style model for Windows. I'd say that probably makes sense. Microsoft has already gotten on the software-as-a-service bandwagon with Office 365, and the company's new CEO, Satya Nadella, is officially credited with spearheading Microsoft's "move to the cloud."