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Can Free Windows 9 Upgrades Help Microsoft Win the Platform War?

By - Source: Tom's Hardware US | B 56 comments

Microsoft is being attacked on all sides lately. Its biggest threat in recent years has been the growth of mobile devices, which also brought the rise in popularity of competing operating systems like iOS and Android. Even if those two are not “desktop operating systems”, they still represent a huge threat to Microsoft, because people spend more time on them and therefore less time on Windows PCs.

If Apple’s iOS and Google’s Android evolve into much more functional and more productive “desktop-like” operating systems, then they will turn into real problems for Microsoft, even on the PC side of the business. By then, billions of people will already be used to those operating systems, so when the more productive tools and apps arrive, it will feel perfectly natural for users to continue using those operating systems for more advanced tasks. That’s why, if that happens, it will be too late for Microsoft to react.

Platform war

Microsoft is ultimately fighting a platform war, even if the platforms aren’t completely interchangeable right now. Platform wars are usually decided at the low-end of the market, because that’s where the volume is and where a platform player can get most of the market share. It’s basically how Microsoft won the war against Mac OS on PCs, too, but this time they're on the receiving end.

The stagnation in PC sales over the past few years and the slow adoption of Windows 8 have also made old problems worse for Microsoft - problems like the “naked PC”. IDC research manager Handoko Andi says that up to 60 percent of the PCs being sold in emerging markets of Asia, are “naked PCs” - PC’s that don’t come with Windows pre-installed (which means Microsoft doesn’t get any revenue on them), but with some open source Linux distribution.

In such markets, where people tend to buy cheaper PC’s, the cost of a Windows license, even a bundled one from the OEM, can be pretty significant compared to the total cost of the PC. So people prefer the versions of the PCs or laptops that come with a free OS. After that, if they actually need Windows, they pirate it.

That’s how, despite the emerging markets accounting for 56 percent of Windows installations, Microsoft only made over a billion dollars from China, Russia and Brazil combined, out of the $77.8 billion that it made last year (with 56 percent of that revenue and 78 percent operating profit coming from Windows and Office). That revenue is insignificant compared to the total installations in these markets.

Free Windows 9 upgrade?

There has recently been a rumor that Microsoft might offer Windows 9 as a free upgrade for Windows XP and Windows 7 users, in a move to get almost everyone on the latest version of Windows.

From a platform war point of view, that makes sense, especially in these emerging markets, where they are either going to use a different (free) operating system, or they are going to pirate it. Microsoft still has to try and win the platform war somehow, but at the same time, is it really “winning” if they end up giving their operating system for free?

If Microsoft thinks it can recover the money through other means, such as getting the people who use Windows to buy some other products from Microsoft, then it could work, but only if Microsoft is committed to this “free Windows 9” strategy in emerging markets, at least.

But there are still some questions that need to be answered and some potential problems with this strategy, too.  One question would be: How long is Microsoft going to update this free version of Windows 9?. If they’re only going to update it for a year, it’s doubtful the strategy will work in convincing people who weren’t paying before for Windows to pay now. Some would pay, but likely not most.

Another question would be, is Microsoft really giving Windows 9 to all Windows XP and Windows 7 users, or only the licensed ones? Because if it's the latter, then that won't change adoption too much in these markets where piracy is very high, either. Microsoft would just be giving a free upgrade to people who were already paying customers.

The potential problem with the free Windows 9 strategy is that they may not be able to give it for free only in emerging markets and then charge those in developed countries. These customers could end up feeling cheated and decide to boycott Windows 9, which also wouldn’t be great for Microsoft’s revenues.

Right now, the free Windows 9 upgrade is still mainly a rumor, perhaps started by Microsoft to see people’s reaction to it, so it may or may not turn into reality. But if it does, while potentially a good solution in Microsoft’s platform fight, especially in emerging markets, it also poses great risks to Microsoft’s business model for Windows. Microsoft needs to tread very carefully with this strategy.

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  • 11 Hide
    ryanmission , August 11, 2014 2:23 PM
    burn mobile OS's with fire
  • 3 Hide
    mouse24 , August 11, 2014 2:27 PM
    As long as they give me the option to choose how I want the OS to look and feel I am willing to upgrade from windows 7.

    I know it would be a lot of work but I would love to see a more linux like approach to different GUI's, why should it matter to windows what your GUI looks like, why do they have to lock it down so tightly.
  • Add your comment Display all 56 comments.
  • 8 Hide
    dstarr3 , August 11, 2014 2:31 PM
    So long as they don't do the subscription model that was written about some months ago, then I couldn't give a wank,
  • 1 Hide
    someguynamedmatt , August 11, 2014 2:38 PM
    Until you give me back the ability to change the color of the damn text on my windows, and to make those windows transparent, I'll be sticking with Windows 7. It's not that I'm so upset about these things, it's just the thought that I'm being told what I can and can't do with the OS that I paid for. That, in my mind, is unacceptable.
  • 1 Hide
    childofthekorn , August 11, 2014 2:53 PM
    uhhh...yes! If the dominant OS allows you to upgrade for free, I'm positive it would help maybe not win forever, but it'll keep them afloat long enough to either sink or get their heads out of their asses.

    They need to learn that bloat is not a good thing.
  • 8 Hide
    Wamphryi , August 11, 2014 3:13 PM
    I'm not convinced that mobile platforms are the danger to the desktop they are made out to be. PC sales are not as they used to be because a PC lasts much longer and even the low end machines are powerful enough for most day to day users.

    A mobile device is only useful for the most basic tasks. I have a Galaxy Phablet and a Galaxy tablet. I use those items but 90% of my computing is on my desktop systems. I see mobile devices as an extension of my computing not a replacement.
  • -1 Hide
    elmo2006 , August 11, 2014 3:20 PM
    in simple terms "nope"!
  • 5 Hide
    CaedenV , August 11, 2014 3:39 PM
    MS does not need to give Windows away for free to be successful on the desktop (though for mobile it was a good call). However, the days of $100-140 windows licenses (to say nothing of the $2-300 retail copies) are long gone now.

    Personally I would like to see the return of a real two tiered OS model. Make a base version of Windows for free. This free version requires a MS account to push people into the store, and would share the same basic interface (though hopefully more mature) as win8 has. No domains, no local accounts, internet will be required (at least for initial setup), but it would work well for 99% of the people out there who want a Windows device.
    Now, if you want local accounts, or the ability to add to a domain, a more win7-like desktop experience, and other bells and whistles, then you pay for it. But paying for it should not cost $140 a pop. I would like to see something more like $20-50 per machine (no more retail copies). Just a flat fee with simple license tied to a motherboard regardless of the number of users. I mean I paid $40 for my copies of Windows 8 and have no regrets... but if I had to pay $140 for each of my 4 machines... good lord I would be just as bitter as everyone else because it simply is not worth that price. Especially if MS is going to take a cut of any in-store purchases and try to push me towards using subscription services like OneDrive, Office, Music, etc.
    Basically let's see the OS for free, and then pay for a 'pro pack'.
  • 3 Hide
    SteelCity1981 , August 11, 2014 3:49 PM
    lol yeah right if there is one word that doesn't fit Microsofts description it's Free.
  • 4 Hide
    Yuka , August 11, 2014 3:51 PM
    They don't need to give it for free in emerging markets (meaning, "poor" for them), but align the price so it is very cheap to have in all of the world.

    For instance, why not make it a USD$10 dollar OS? $20 at most? That way, "rich" countries can subsidize the price for those "emerging" markets and not feel displaced. Then can charge for each "advanced" feature you want (the Siri-like assistant, for example). For instance, I really don't need anything from the Server editions (directory, and advanced user admin), but I do want full 64bits support and everything that would let me run games with no issues.

  • 4 Hide
    a1r , August 11, 2014 4:35 PM
    Article is much ado about nothing. There is no platform war on the desktop and there really never has been since the days of various DOS versions. Microsoft dominates there, it's a known monopoly, Apple and Linux have insignificant market share. In the mobile market Microsoft has an insignificant software presence. They don't *need* to have their OS on any mobile devices because they make a percentage of most Android based devices.
  • 5 Hide
    PandaButtonFTW , August 11, 2014 4:39 PM
    make it look like 7, give cortana knowledge of sexual innuendos ...... and ill be a happy man.
  • 7 Hide
    tomfreak , August 11, 2014 4:59 PM
    If the win7 users are getting a free upgrade but win8 are not getting it. I am NOT going to be HAPPY >:( 
  • 2 Hide
    vaughn2k , August 11, 2014 5:01 PM
    "... If Apple’s iOS and Google’s Android evolve into much more functional and more productive “desktop-like” operating systems, then they will turn into real problems for Microsoft, even on the PC side of the business...." - I totally disagree. I still, am using WIndows 7, and I do not want to touch my screen, because I have a mouse - This is also the reason I do not like Windows 8. I do not use excel and I do not use my tablet to design something, because the function and screen can can accomodate maximum 2 fingers - and this is not productive. Whatever operating system I have on my desktop, as long as it is XP or 7 like OS, it cannot, ever, replace by a mobile device. How is someone really get that idea?
  • 3 Hide
    DRosencraft , August 11, 2014 6:07 PM
    The free model only works if there is an alternate revenue stream. F2P games compensate by way of micro-transactions. Apple subsidizes the upgrade cost off their OS by the fact you have no choice but to use their hardware no matter what. Android makes their money off the use of Google. Microsoft isn't hardware bound, and they aren't going to make enough back off Bing, so they would need some mechanism to make money. Free isn't free. As much as it would be great to get a new OS for nothing, it just doesn't work so easily. Limited paths for free upgrades will likely be geared towards those who otherwise never would have upgraded anyway (7 users as they assume 8 users will upgrade anyway). A price cut makes sense. Recall, 8 was $40 for several months, with some retailers still selling it discounted for weeks later. That model seems much more reasonable.
  • 4 Hide
    hoofhearted , August 11, 2014 6:26 PM
    Why not just charge $50 dollaers and have one Windows OS. No ultimate, Professional, Home, just the OS. Sell everything else as modules. Encrypting filesystem, Backup restore.
  • 1 Hide
    red77star , August 11, 2014 6:41 PM
    It will be a success once they more metro and other mobile shit. We do not want it. They need to bring Aero back to Windows, right now looks damn flat ugly and boring. Microsoft needs to restart Windows 7 project, slap DX12 to it, release new WMP not some xbox music/video bullshit, slap IE11 or whatever to it. Bring all kernel improvements from Windows 8, add virtual desktop support to it etc and they would have a winner.
  • -5 Hide
    Christopher1 , August 11, 2014 7:39 PM
    uhhh...yes! If the dominant OS allows you to upgrade for free, I'm positive it would help maybe not win forever, but it'll keep them afloat long enough to either sink or get their heads out of their asses.

    They need to learn that bloat is not a good thing.

    Windows is NOT bloated. When you take out the massive amounts of drivers (necessary to keep compatibility with various things in the real world) Windows is only about 5GB's. I do not call that 'bloated' at all.
  • 0 Hide
    velocityg4 , August 11, 2014 8:29 PM
    I can see some benefits to Microsoft to offering free upgrades. As it is people upgrading Windows is a small percentage of their sales. Most people upgrade comes when they replace their old PC. By playing their cards right they can make people upgrade more rapidly, driving up PC sales.

    By offering a free upgrade Microsoft can end support for old version of Windows more rapidly as Apple does with OS X. This will decrease support costs for legacy systems. When people complain point to the free upgrade. Right now MS would just support 7, 8 and 8.1. Which is reasonable.

    Don't actively support old hardware in the new version by including drivers, say anything over six or seven years old like Apple. This will also decrease the footprint of Windows. Hardware manufacturers will not provide new drivers. Thus in the cycle of more rapidly ending support people will have to replace their six or seven year old computers they are still clutching on to. Driving sales of Windows licenses and Office Licenses.

    Drop 32 bit support. 64 bit CPU's have been the norm for a long time now. It's time to shoot that horse. This will decrease development and support costs along with decreasing the OS footprint.
  • 0 Hide
    dimar , August 11, 2014 8:37 PM
    Call it Windows. Make it free. Create a centralized software and drivers store, but let users also download and install stuff the way it is now too.
    I just solved all the problems.
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