Sunday September 04, 2016

Microsoft's New Business Model For Windows 10: Pay To Play

With the news that Microsoft is offering Windows 10 subscriptions to businesses for $7 per month, discussion regarding the company’s potential plans for charging regular consumers are ramping up again. For now, I’ll just ponder whether MS would have to credit you back every time they release a broken system update.

The exact price that Microsoft charges large OEMs for Windows is a carefully guarded secret, but there's no question that the price tag has dropped precipitously in the past few years. Indeed, on some devices, such as small tablets, the OEM price of Windows is literally zero. People are still buying PCs, but the rate of new sales is declining year over year. Fewer PCs, with lower revenue per unit, means dramatically lower overall revenues for the Windows licenses attached to those PCs. But the cost of developing, distributing, and supporting Windows isn't declining. To maintain its margins, Microsoft is aggressively looking for new ways to convince Windows users to pay for additional products and services.