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Microsoft Looking For New Ways To Monetize Windows

Last week, Microsoft Chief Operating Officer Kevin Turner delivered a presentation (opens in new tab) at the Credit Suisse technology investment conference in Phoenix, Arizona, where he revealed that the company is looking into a new business model for the Windows platform. The company has already slashed the royalty price for devices with screens 9 inches and smaller, but this new model sounds like the company may venture into the subscription space just as it has with Office.

We've heard this song and dance before. Previous sources indicated that the Windows platform will become more integrated with the cloud. Even more, the company supposedly plans to provide a subscription-based model starting with Windows 10. There's also talk that Microsoft will make the basic version of Windows 10 for free, and charge customers for "premium" features. Either way, this would be a first for Microsoft, which has used the same pricing model for decades.

During his presentation, Turner reminded the audience that Microsoft will turn 40 years old in 2015. He said that Microsoft had one of the best business models during its first 39 years but that it's now old-school business. Apparently, it's time for a change in a changing market.

"If you look at our future, it's really about becoming a Cloud OS, a devices operating system, having first party hardware to light up those experiences, and really being the company that can uniquely provide for dual-users this idea of digital work and digital life experiences," he said.

After the presentation, Turner fielded questions from the audience. When asked if Microsoft will start losing money with the Windows platform, Turner confirmed and added that additional information regarding monetizing Windows will be revealed in Spring or Summer 2015. That is also the same launch window for Windows 10.

"The thing about it is, though, we've got to monetize it differently," he said. "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."

Microsoft is expected to reveal additional information about Windows 10 during a special press event in January 2015, followed by BUILD 2015 in April and the Ignite conference in June. Turner acknowledged that the "business stuff" may be revealed in the early part of 2015, as well.

During the Q&A session, Turner shared his excitement about the recent explosion of Windows-based devices that are taking advantage of the royalty-free operating system, including the HP Stream notebooks and tablets. Amazon currently lists the HP Stream 13 for $229.99 and the HP Stream 11 for $274.99. Both sport Windows 8.1 and a full year of Office 365 Personal.

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  • tom10167
    This doesn't sound NEARLY as bad as I thought it would be based on the headline. I suppose if they can pull it off in a way that I'm not paying $50/month to surf youpo-the web the market could accept it.
  • de5_Roy
    easy. stop extorting users and launch a 80-90% complete instead of 0-40%. also stop alienating desktop and laptop users.
  • 2Be_or_Not2Be
    This is a bad precedent for Windows. When I buy Windows, I do not want a subscription-model. I want to pay once & be done. Subscription inevitably always cost more than a perpetual-use, one-time purchase.

    The only thing I hear him saying is that they want to use the new subscription model that software companies are trying to switch to (e.g. Adobe w/Creative Cloud) as a way to generate more revenue on a more-predictable pattern. The "old business model" was better for consumers; the "new business model" is a continuous blood-sucking process. Yay for new business! (/sarcasm)
  • coolitic
    I don't see why people are making so much fuss. They are just brainstorming.

    When it becomes more than that, then you should fuss about it.
  • skit75
    You must be online to use our operating system. Please slide card for use of Device Manager.
  • Murissokah
    If that is the case, the only question I have for Microsoft is how long they plan to support windows 8.
  • red77star
    He said a lot but in nutshell he said nothing. Microsoft has a problem he cannot answer right now and that is Windows in form of Windows 8.x and Windows Phone is a flop. Nobody knows the fate of Windows 10 yet and that is Microsoft bet right now. Microsoft created this problem by releasing abomination called Windows Phone 7/8, Windows 8.x. The market didn't ask for any of this. Solution: Re-release Windows 7. Windows 10 is just Windows 8.2 Microsoft is trying to pull in front of our eyes saying that is something else which means Windows 10 doesn't solve the problems of Windows 8.x.
  • chicofehr
    Didn't Adobe start loosing money after switching to subscription only? I'm still using CS6 as a result. Microsoft beware of going along with a failed idea. Subscriptions are more of a MMO thing, not a OS thing.
  • Onus
    The word "monetize" carries with it connotations of vampiric dishonesty; no thanks.
    It's NOT "all about the money."
  • scolaner
    The word "monetize" carries with it connotations of vampiric dishonesty; no thanks.
    It's NOT "all about the money."

    Oh, tsk. "Monetize" isn't a dirty word. It's just the term for how companies learn to make money on their products. So much in the tech world starts out as some amazing idea--YouTube, Twitter, Amazon, Facebook, and so on--and THEN they figure out how to try and make money. If they can't make money, they'll fold, and then no one will have that Cool Thing.

    MS needs to figure out this Windows problem. No one wants to pay $90 for an OS. It doesn't make sense to lock users into one license for one machine. The company is moving everything to the cloud, and now it has to figure out how to earn money off of that model.