Sunday, January 12, 2014

The Big Question is "Will it be Free?"

The tech media are abuzz with rumors of Windows 9. Most of the coverage relates to a perceived need on Microsoft's part to undo the infinite suckage of Windows 8. But in my opinion, Microsoft's real challenge is competing with the free operating systems: ChromeOS, Android, increasingly user-friendly versions of Linux and now even MacOS.

As I wrote in a recent piece at the Center for a Stateless Society:

Microsoft finds itself at a critical juncture and is reacting -- not just with the "Scroogled" propaganda, but with consideration of making some versions of the Windows operating system free to device manufacturers to combat Google's other free OS, Android.

The era of paying cash for operating systems (and most applications) is over. The era of free operating systems -- and networked/cloud-based computing -- is here.

Microsoft is going to have to find new ways of making money. Selling operating systems isn't going to be their bread and butter any more. The more quickly they realize this, the better their chances of remaining a big player in the PC market.

If I was designing an OS marketing future for Microsoft, I think I'd go with something along these lines:

  • Make bare-bones Windows 9 free for both OEM use and end user download;
  • Make after-market money by selling applications, support packages and maybe even making the free version OS into "adware" -- run Bing-powered ads on the desktop or whatever;
  • Offer an "enterprise edition" of the OS that comes bundled with some key apps (e.g. Office) and extended support for businesses; and
  • Get serious about competing in the hardware market, especially the business sector. Microsoft has proven it can do hardware with Xbox (and with the Surface tablet -- even if it didn't fly, they got it into production, didn't they?). A line of Microsoft-branded desktops and laptops, loaded with the "enterprise edition" of Windows 9, key apps, a support/warranty package ... these could be moneymakers on their own, and through extensions of the warranty/support stuff as time goes on. Lots of businesses would rather just pay up front to Microsoft for the perceived "stand behind our stuff" factor than go the cheap route and get nickeled and dimed after.
The "free" and "enterprise" editions would reinforce each other. The guy who uses Windows 9 "enterprise" all day at work will be comfortable with it and want it at home. The guy who uses Windows 9 "free/adware" at home will look favorably on the "enterprise" edition when making purchasing decisions for the office he runs.

What isn't going to work is expecting the average user to keep paying two- and three-figure prices for an OS. The only thing that's saved that approach so far is gaming, and  now that market is going to go soft as Steam's boxes and OS establish a beachhead.

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