Windows 10 and Microsoft’s Earnings

I don’t usually do a lot of analysis of company moves. I just don’t have the time, and often don’t have the insight. But, as a freelance technology writer, I spend a lot of time looking at technology and technology companies. Microsoft is rolling out its new operating system called Windows 10, and it has some interesting marketing and PR behind it.

Free Windows 10 Upgrade

The first interesting thing about Windows 10 is that it is free. Well…. kind of… and sort of.

windows 10 free upgradeIf you already own Windows 7  or Windows 8, Microsoft will allow you to upgrade to Windows 10 for free, for up to one year. That is, you have one year from now to upgrade to Windows 10 and get it for free.

Free? How does this make sense for a publicly traded, profit motivated company?

The first thing to understand is that most customers don’t actually upgrade their operating system when new operating systems come out. For retail customers (that is, people who have their own computers that they use and set up themselves) the process of upgrading an operating system is complicated, and unnecessary. After all, if your computer works now, why bother doing something like upgrading the operating system. This is doubly true if you have to PAY money to do it. Remember, the upgrade proposition is essentially, do this long, boring, complicated thing, to get a few new bells and whistles that you don’t really know why you would need them, and pay $150 to do it.

Not a good deal.

In fact, most retail customers only upgrade their computers when they get new ones. So, Microsoft giving away a year worth of upgrades probably doesn’t cost them as much as you might think.

For corporate customers, the story isn’t much different. If you think upgrading your three or four computers sounds like too much work, imagine having to do it to 1,000 or 10,000 or even 100,000 computers. It takes months of planning, thousands of man hours, plus new training for users, and making sure all of your mission critical applications still work. Is it any wonder that over half of all businesses have a least some Windows XP or Windows Server 2003 computer laying around somewhere?

The money factor is even less there. Most corporate customers have annual licenses that cover all of their Microsoft software. In other words, Microsoft already gets money for Windows every year, and that amount is the same whether they customer is installing Windows 7, Windows 8, or even Windows 10.

No More Windows Versions

Since its inception, Microsoft has operated on the model where it would release a version of Windows, and then sell that version for the next several years while it worked on the next version. The distance between versions always seems to be wrong, either too long or too short. The amount of space between Windows 95 and Windows XP was so laughably long that the company abandoned the naming convention with the year, lest the customer be reminded that they OS was years and years old.

The distance between Windows Vista and Windows 7 was very fast because of another problem Microsoft has. Sometimes, the operating system isn’t well received and customers don’t want it. Then, the company is stuck with a product that people don’t really want but it MUST sell. Even worse, is that even if Microsoft fixes it, the name is poison and no one will ever give it another change. Windows 7, for example, is a lot more like Windows Vista than most people will ever know because they never owned Vista. In fact, within the industry, Windows 7 is often referred to as Vista done right.

Which brings us to no more Windows.

The world of computing changes pretty fast these days. You likely have no idea what version of Chrome or Firefox, or whatever that you are running. They continuously update them. The same thing goes for the phone in your pocket. Only techies know what version of Android they have. Apple is pretty much the only technology company left releasing one version of something at a time.

Microsoft will do the same with Windows. Instead putting years of work into an operating system and hoping to get it right, Microsoft will incrementally release new features and improvements. If a better touch screen technology comes along, the company will just add it in, a little at a time. If customers howl, they can back it out, or make it optional. If they love it, it becomes permanent. And so on.

There are a lot of issues that have yet to be sorted out, including how and when corporate America will include various updates, but for the average consumer, the process will probably fade from their view. And, as far as money goes, while Microsoft will lose out on some upgrade money, this new system ensures that they can react quickly enough to the market to avoid another big, money losing turkey of an operating system, and avoid driving users further into the world of tablets, and away from Windows.

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