6 ms·

The obvious question is, how are we going to pay for this? With no periodic releases of new versions, it seems that Windows 10 will either be a subscription ba

by beloch 11y ago

The obvious question is, how are we going to pay for this? With no periodic releases of new versions, it seems that Windows 10 will either be a subscription based service or, in all likelihood, a collection of subscription based services and extra features with a free, but spartan, core. It's an interesting move, but I suspect MS is severely underestimating the backlash that will exist against monthly OS subscription payments.

Eyaluth 11y ago
The article says they make most of their money off new computer sales anyways.
monk_e_boy 11y ago
How could you buy someone a laptop with windows on it? They'd have to pay a subscription forever? Or would it be like a phone, where it'd seem odd not paying every month. Once steam boxes are out and popular, I doubt I'll be using windows again.
- ethana 11y ago
  Stream boxes run on Windows...
  - nightpool 11y ago
    The parent was referring to "Steam boxes", i.e. http://store.steampowered.com/steamos http://store.steampowered.com/steamos
    - jethro_tell 11y ago
      I thought they switched to debian or ubuntu.
      - monk_e_boy 11y ago
        Not sure, but you can get Windows to boot to Steam anyway, so the OS kinda disappears so you'd be fine with windows 8 or something for a few years.
    - ethana 11y ago
      That's StreamOS, there's a different. Most of the Steam boxes come with Windows 8 (http://www.amazon.com/s/ref=nb_sb_noss_2/186-2840984-5406453?url=search-alias%3Daps&field-keywords=steam+box http://www.amazon.com/s/ref=nb_sb_noss_2/186-2840984-5406453...).
      - CrystalGamma 11y ago
        The Alienware Alpha is NOT a Steam Machine. It was supposed to be, but Valve couldn't figure out their shit soon enough, so they sold it as a normal small-form-factor PC before the hardware became obsolete.
      - petepete 11y ago
        Steam Machines won't be launched until at least November[0]. Anything launched before then, whether it has SteamOS or Windows configured to boot to Steam is just a PC. [0] http://store.steampowered.com/sale/steam_machines http://store.steampowered.com/sale/steam_machines
    - deleted 11y ago
      [deleted]
filereaper 11y ago
I'm curious as to how much revenue/profit Microsoft still makes from the desktop line of Windows. Would setting desktop Windows free really hurt revenues at Microsoft that much? I'm not denying that each release of Windows requires engineering effort. I figured most of Microsoft's profits come from software and services running on-top Windows, so SQL Server, Office, etc... Perhaps still charge for Windows Server, but let the Desktop and Mobile versions go free.
- dageshi 11y ago
  I'd have thought that Microsoft still sells a monumental pile of Desktop licenses to business because a) they've got the money b) they don't want to risk being caught without legal licenses. In fact I've felt that up until around the last 5 years Windows was primarily focused on business users and consumers were just a happy bonus because what else were they going to run? So I could see them giving away a version that can't join a domain (no use to business) for consumers, but I'd be very surprised if they did the same for business customers.
  - superuser2 11y ago
    How do you imagine a business would come across a computer that did not already have a desktop license?
    - nos4A2 11y ago
      Virtual Machines and Windows Server.
- themartorana 11y ago
  I think they probably make a ton on OEM installations on new computers. Consumer upgrades didn't pay for the support required for non-upgrades.
- adventured 11y ago
  They still make a lot of money off of Windows desktop. In 2014 they changed how they report segment revenue, but as of 2013 the Windows division (non server) had $19 billion in sales for that fiscal year. Revenue for Windows desktop is down a bit from there (perhaps 8%-10%) according to reports throughout 2014. The operating income on that $19 billion was $9.5 billion. Needless to say it's still a wildly profitable cash cow for Microsoft, albeit a declining business.
swalsh 11y ago
Your monthly subscription payments will come in the form of monthly Azure payments. People will accept that. This isn't 1996 anymore. People don't buy desktops, and laptops will soon be obsolete too. When your phone has a processor powerful enough to do all the work a consumer could ever want, there will be 3 main markets. Mobile, Server, and Gaming. Now they probably could keep charging for the OS for the gaming PC's, but servers and mobile are moving in directions other then Windows. Plus I think a lot of gamers were stealing windows anyways... so doesn't make sense to concentrate on that market. I think Microsoft is really spot on here.
- irq-1 11y ago
  > Your monthly subscription payments will come in the form of monthly Azure payments. Leverage their desktop monopoly to gain market share in the cloud? Sounds familiar. Maybe Azure is just part of Windows, like IE?
  - chinpokomon 11y ago
    Anyone can use Azure. They even have Linux distros available. Deploy what you want. Get charged micro transactions for CPU time. When your machine in the cloud is off, you only have a storage fee. Consumers won't really notice and Azure is priced to compete against other cloud providers.
- zouhair 11y ago
  Piracy will come back with a vengeance. I don't know how they'll tell people who go buy their laptops that they have to pay a monthly subscription if they want to keep using it.
  - diminoten 11y ago
    Anyone coming on HN and suggesting Microsoft is going to charge a monthly subscription for their OS is completely out of touch with reality.
    - 11y ago
techtivist 11y ago
I doubt they will do that for personal devices. I think they will have two tiers: personal and enterprise. Personal would essentially be bundled up with PCs for "free" to the end-users with money coming from the OEMs. They will then "upsell" the likes of Office for a subscription. But I find the subscription concept interesting for enterprise customers who are already used to it. Bundle support services and extra add-ons tailored to enterprises in general or particular industry, could have a huge potential for them.
bunderbunder 11y ago
I don't think Microsoft makes much money off of shrinkwrap copies of Windows. Almost everyone I know just sticks with the version of Windows that came with the computer, and when they switch to a newer version it's because they bought a new computer that comes with it preinstalled. The probable advantage to Microsoft is that they have a less disjointed platform to support. For example apps released for the app store don't run on Windows 7 and earlier, and apps that work on Windows 7 and earlier can't be put on the app store. That sort of thing has been an enormous success killer for some of Microsoft's newer business initiatives, and that in turn means it's a threat to the long-term success of the company. It might also save on development costs. 3-year release cycles mean you're at great risk of sinking tons and tons of resources into gold plating ideas that ultimately bomb on the market. This new approach means they can fail fast, which means they should be able to produce value more efficiently.
- zanny 11y ago
  They were still making $20 - $30 per license sold from major vendors like HP and Dell. They move millions of units per year. That is a lot of revenue to throw away.
  - detaro 11y ago
    If they go to a subscription model, they'd probably not loose much. If not, they still could charge for OEM licenses bundled to hardware.
  - sukilot 11y ago
    They aren't throwing away OEM revenue. Only OS upgrade revenue.
- daemin 11y ago
  That copy of windows does add at least $100 (or your regional equivalent) to the price of the computer, so it's not free but it's bundled with the other parts so hidden away. Out of sight out of mind.
- rhengles 11y ago
notahacker 11y ago
I doubt they sold that many operating system upgrades to consumers anyway, and corporations might be decidedly less hostile to subscription based licensing/support packages if they're getting upgrade paths that preserve backward compatibility for their custom software and less unwanted complication and indirect expense than the major OS update every four years.
wongarsu 11y ago
Microsoft may also be planning to monetize Windows with the app store introduced in Windows 8, similar to the Google Play Store paying for Android.
dclowd9901 11y ago
They undoubtedly make enough money on the sale of licensing to new devices that standalone installs are an afterthought, and the income from new device licensing means that supporting "older" devices (while continuing to keep the OS fresh) is trivial, cost-wise.
jfoster 11y ago
Potentially they could keep the same model they have now. Even though the updates are ongoing, people will not use the same computer forever. With automatic updates, Microsoft gains greater control over the performance profile of Windows, too. (ever tried sticking with the same iPhone for more than a couple of iOS versions?)
wbillingsley 11y ago
Presumably, we're not -- updates will be free, and the policy "pays" from increased focus and less disruption within Microsoft's product strategy. After a period, they only need maintain one version, and none of the updates can hurt adoption. In other words, they've just announced that they're not going to pull another Vista or Windows 8 that damaged their brand, and neither are they going to make the mistake of supporting XP for so many many years again.
dewiz 11y ago
10$ a year sounds fair to me
cwyers 11y ago
There won't be monthly subscriptions. OEMs will keep buying Windows for new machines and enterprises will keep buying software assurance licenses and 99% of Windows revenue will stay exactly the same.
Schwolop 11y ago
Office365/OneDrive are doing well too. Anecdotally, I and many of my peers and family have taken out $120/yr family subscriptions, which is probably pretty close to - if not erring on the higher side of - the annual cost of Windows OS amortised over the frequency with which I/they replaced or added computers. Amusingly, of 10+, I now only have one computing device running Windows at all (and it defaults to booting Ubuntu anyway), and yet Microsoft is still taking my money!
- castell 11y ago
  Office365 is a subscription service and can get quite expensive - if one compares it to a traditional Office 2003 or 2010 (comparable) license that is often used for 5+ years.
gnud 11y ago
It seems they're planning on selling your data, and locking you in to their other services. I recently tried out the Win10 tech preview. It's very very hard to disable internet searching whenever you try and find a file, and it's even worse to try and remove OneDrive. Granted, this is a tech preview, so disabling this will probably be a tiny bit easier in the future, but I think it gives an indication as to the direction Microsoft is moving. Yet another advertising company.
- GoofballJones 11y ago
  Where are you getting that they're planning on selling your data? Source for this? From everything I've heard, they're doing the opposite.
  - gnud 11y ago
    By 'selling your data', I mean using your data to target ads. Not actually selling it, but profiting from having it. So I could probably have phrased that better.

by beloch 11y ago

Eyaluth 11y ago

The article says they make most of their money off new computer sales anyways.

monk_e_boy 11y ago

How could you buy someone a laptop with windows on it? They'd have to pay a subscription forever? Or would it be like a phone, where it'd seem odd not paying every month. Once steam boxes are out and popular, I doubt I'll be using windows again.

ethana 11y ago
Stream boxes run on Windows...
- nightpool 11y ago
  The parent was referring to "Steam boxes", i.e. http://store.steampowered.com/steamos http://store.steampowered.com/steamos
  - jethro_tell 11y ago
    I thought they switched to debian or ubuntu.
    - monk_e_boy 11y ago
      Not sure, but you can get Windows to boot to Steam anyway, so the OS kinda disappears so you'd be fine with windows 8 or something for a few years.
  - ethana 11y ago
    That's StreamOS, there's a different. Most of the Steam boxes come with Windows 8 (http://www.amazon.com/s/ref=nb_sb_noss_2/186-2840984-5406453?url=search-alias%3Daps&field-keywords=steam+box http://www.amazon.com/s/ref=nb_sb_noss_2/186-2840984-5406453...).
    - CrystalGamma 11y ago
      The Alienware Alpha is NOT a Steam Machine. It was supposed to be, but Valve couldn't figure out their shit soon enough, so they sold it as a normal small-form-factor PC before the hardware became obsolete.
    - petepete 11y ago
      Steam Machines won't be launched until at least November[0]. Anything launched before then, whether it has SteamOS or Windows configured to boot to Steam is just a PC. [0] http://store.steampowered.com/sale/steam_machines http://store.steampowered.com/sale/steam_machines
  - deleted 11y ago
    [deleted]

filereaper 11y ago

I'm curious as to how much revenue/profit Microsoft still makes from the desktop line of Windows. Would setting desktop Windows free really hurt revenues at Microsoft that much? I'm not denying that each release of Windows requires engineering effort. I figured most of Microsoft's profits come from software and services running on-top Windows, so SQL Server, Office, etc... Perhaps still charge for Windows Server, but let the Desktop and Mobile versions go free.

dageshi 11y ago
I'd have thought that Microsoft still sells a monumental pile of Desktop licenses to business because a) they've got the money b) they don't want to risk being caught without legal licenses. In fact I've felt that up until around the last 5 years Windows was primarily focused on business users and consumers were just a happy bonus because what else were they going to run? So I could see them giving away a version that can't join a domain (no use to business) for consumers, but I'd be very surprised if they did the same for business customers.
- superuser2 11y ago
  How do you imagine a business would come across a computer that did not already have a desktop license?
  - nos4A2 11y ago
    Virtual Machines and Windows Server.
themartorana 11y ago
I think they probably make a ton on OEM installations on new computers. Consumer upgrades didn't pay for the support required for non-upgrades.
adventured 11y ago
They still make a lot of money off of Windows desktop. In 2014 they changed how they report segment revenue, but as of 2013 the Windows division (non server) had $19 billion in sales for that fiscal year. Revenue for Windows desktop is down a bit from there (perhaps 8%-10%) according to reports throughout 2014. The operating income on that $19 billion was $9.5 billion. Needless to say it's still a wildly profitable cash cow for Microsoft, albeit a declining business.

swalsh 11y ago

Your monthly subscription payments will come in the form of monthly Azure payments. People will accept that. This isn't 1996 anymore. People don't buy desktops, and laptops will soon be obsolete too. When your phone has a processor powerful enough to do all the work a consumer could ever want, there will be 3 main markets. Mobile, Server, and Gaming. Now they probably could keep charging for the OS for the gaming PC's, but servers and mobile are moving in directions other then Windows. Plus I think a lot of gamers were stealing windows anyways... so doesn't make sense to concentrate on that market. I think Microsoft is really spot on here.

irq-1 11y ago
> Your monthly subscription payments will come in the form of monthly Azure payments. Leverage their desktop monopoly to gain market share in the cloud? Sounds familiar. Maybe Azure is just part of Windows, like IE?
- chinpokomon 11y ago
  Anyone can use Azure. They even have Linux distros available. Deploy what you want. Get charged micro transactions for CPU time. When your machine in the cloud is off, you only have a storage fee. Consumers won't really notice and Azure is priced to compete against other cloud providers.
zouhair 11y ago
Piracy will come back with a vengeance. I don't know how they'll tell people who go buy their laptops that they have to pay a monthly subscription if they want to keep using it.
- diminoten 11y ago
  Anyone coming on HN and suggesting Microsoft is going to charge a monthly subscription for their OS is completely out of touch with reality.
  - 11y ago

techtivist 11y ago

I doubt they will do that for personal devices. I think they will have two tiers: personal and enterprise. Personal would essentially be bundled up with PCs for "free" to the end-users with money coming from the OEMs. They will then "upsell" the likes of Office for a subscription. But I find the subscription concept interesting for enterprise customers who are already used to it. Bundle support services and extra add-ons tailored to enterprises in general or particular industry, could have a huge potential for them.

bunderbunder 11y ago

I don't think Microsoft makes much money off of shrinkwrap copies of Windows. Almost everyone I know just sticks with the version of Windows that came with the computer, and when they switch to a newer version it's because they bought a new computer that comes with it preinstalled. The probable advantage to Microsoft is that they have a less disjointed platform to support. For example apps released for the app store don't run on Windows 7 and earlier, and apps that work on Windows 7 and earlier can't be put on the app store. That sort of thing has been an enormous success killer for some of Microsoft's newer business initiatives, and that in turn means it's a threat to the long-term success of the company. It might also save on development costs. 3-year release cycles mean you're at great risk of sinking tons and tons of resources into gold plating ideas that ultimately bomb on the market. This new approach means they can fail fast, which means they should be able to produce value more efficiently.

zanny 11y ago
They were still making $20 - $30 per license sold from major vendors like HP and Dell. They move millions of units per year. That is a lot of revenue to throw away.
- detaro 11y ago
  If they go to a subscription model, they'd probably not loose much. If not, they still could charge for OEM licenses bundled to hardware.
- sukilot 11y ago
  They aren't throwing away OEM revenue. Only OS upgrade revenue.
daemin 11y ago
That copy of windows does add at least $100 (or your regional equivalent) to the price of the computer, so it's not free but it's bundled with the other parts so hidden away. Out of sight out of mind.
rhengles 11y ago

notahacker 11y ago

I doubt they sold that many operating system upgrades to consumers anyway, and corporations might be decidedly less hostile to subscription based licensing/support packages if they're getting upgrade paths that preserve backward compatibility for their custom software and less unwanted complication and indirect expense than the major OS update every four years.

wongarsu 11y ago

Microsoft may also be planning to monetize Windows with the app store introduced in Windows 8, similar to the Google Play Store paying for Android.

dclowd9901 11y ago

They undoubtedly make enough money on the sale of licensing to new devices that standalone installs are an afterthought, and the income from new device licensing means that supporting "older" devices (while continuing to keep the OS fresh) is trivial, cost-wise.

jfoster 11y ago

Potentially they could keep the same model they have now. Even though the updates are ongoing, people will not use the same computer forever. With automatic updates, Microsoft gains greater control over the performance profile of Windows, too. (ever tried sticking with the same iPhone for more than a couple of iOS versions?)

wbillingsley 11y ago

Presumably, we're not -- updates will be free, and the policy "pays" from increased focus and less disruption within Microsoft's product strategy. After a period, they only need maintain one version, and none of the updates can hurt adoption. In other words, they've just announced that they're not going to pull another Vista or Windows 8 that damaged their brand, and neither are they going to make the mistake of supporting XP for so many many years again.

dewiz 11y ago

10$ a year sounds fair to me

cwyers 11y ago

There won't be monthly subscriptions. OEMs will keep buying Windows for new machines and enterprises will keep buying software assurance licenses and 99% of Windows revenue will stay exactly the same.

Schwolop 11y ago

Office365/OneDrive are doing well too. Anecdotally, I and many of my peers and family have taken out $120/yr family subscriptions, which is probably pretty close to - if not erring on the higher side of - the annual cost of Windows OS amortised over the frequency with which I/they replaced or added computers. Amusingly, of 10+, I now only have one computing device running Windows at all (and it defaults to booting Ubuntu anyway), and yet Microsoft is still taking my money!

castell 11y ago
Office365 is a subscription service and can get quite expensive - if one compares it to a traditional Office 2003 or 2010 (comparable) license that is often used for 5+ years.

gnud 11y ago

It seems they're planning on selling your data, and locking you in to their other services. I recently tried out the Win10 tech preview. It's very very hard to disable internet searching whenever you try and find a file, and it's even worse to try and remove OneDrive. Granted, this is a tech preview, so disabling this will probably be a tiny bit easier in the future, but I think it gives an indication as to the direction Microsoft is moving. Yet another advertising company.

GoofballJones 11y ago
Where are you getting that they're planning on selling your data? Source for this? From everything I've heard, they're doing the opposite.
- gnud 11y ago
  By 'selling your data', I mean using your data to target ads. Not actually selling it, but profiting from having it. So I could probably have phrased that better.