Monday September 05, 2016

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

If you ask me, I think Microsoft bit itself in the ass by not only making Windows 10 a free upgrade, but by aggressively pushing it on people as well. Think about it, the average consumer now has the mindset of "why should I pay for Windows 11, wasn't my last upgrade free?"

The bottom line is this: The price of Windows, as paid by OEMs, is down. 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.