Microsoft is facing a crisis, two thirds of all users are running either Windows XP or Windows 7 and only 10 percent are running Windows 8 and 8.1.The three year update plan has worked for Redmond for so many years, but Windows 9 will be the last true update to the platform.
Instead of forcing users to continue paying for updates to the platform, Microsoft will do what iOS, Android and now Mac OS are doing and offer the updates out for free, with some sort of incentives to make free users worth it. Cloud storage, Office subscriptions and other services will be major ways of increasing income.
Killing off the Payment Update
Microsoft is one of the last sellers of packaged updates that cost money, Android and iOS both have offered updates for free since the beginning of the platforms and Mac OS, Windows’ biggest rival, has started offering updates for free from now on.
Even though this is one of Microsoft’s core businesses, offering it out to consumers, enterprise and education, it is one that is dying at a pretty rapid rate and Windows 8 and 8.1 have both not gained enough revenue for Redmond to be happy. The big reason for Windows 8 and 8.1 not taking off is the change in UI and the price tag associated with the OS update, even when Windows 8 was $29.99, users still were not keen on spending that amount of money for what is essentially an upgrade (or downgrade) to the platform.
We think it is more to do with the price than the actual content on Windows 8, if we look at iOS7, another highly criticised OS update from Apple, over 95 percent of users are now running the refreshed design, simply because it is free and offers new features.
Windows 9 and the new business model
Windows 9 will most likely be a turning point for Microsoft, the update will reportedly not bring a huge amount of changes to the UI and we are going to see some of the most wanted features return in some form, like the Start Menu on Desktop mode.
What it will bring is a new business model, but we are not sure how far Microsoft will go. The smart way to go would be to make the OS update free to all users of Windows 8.1 and offer services through a subscription model.
This could include Microsoft’s OneDrive become more integrated and needed. Instead of having loads of HDD storage, new laptops and tablets will have small flash storage for applications and documents and media will be stored on the cloud.
Office is still King
Office 365 is a good way to continue making money from organisations and draw personal users into a subscription model that is fair and cheap. We expect OneDrive storage to start being included in bulk on Office 365, around 100GB of cloud storage free if one user signs up.
OneDrive storage and Office 365 subscriptions could be a huge revenue source for Microsoft in the later years, but it will mean toning down their workforce.
The only reason Microsoft currently sells a lot of their services and software at a price is because they need to pay the bills, but as we move into a more SaaS world, they will need to tone down to deliver consumers the best.
Windows 9: 2015 Launch
All this could turn to nothing, Microsoft may go down a weird route and offer Windows 9 for $69.99, like they have with all their previous updates, but something about Satya Nadella talks in the past few months leads us to believe the future is in the cloud and free updates.
According to various rumors, Windows 9 will be launching next year and Microsoft has already shown titbits of the new OS at BUILD a few months ago.