This Is How Microsoft Can Monetize Windows 10

Gavin Phillips 14-07-2015

“Free” is a word we hear with increasing frequency. In this context, we are referring to the “free” upgrade to Windows 10 Windows 10 Upgrade - Free Doesn't Mean It Won't Cost Anything There's a catch to the free Windows 10 upgrade. Microsoft understands its audience all too well; they are more likely to pay for the freedom of control, rather than for extra features. Read More .


Many millions of users will indeed have a free Windows 10 upgrade. Others, holding onto their now aging Windows XP Your Best Options for a Windows XP Upgrade to Windows 7 It's time to let go of the Windows XP and upgrade to a secure operating system. This may be your last chance to upgrade to a relatively familiar Windows 7. We show you how. Read More and Vista machines, won’t. But just what is this free Windows we are expecting? And how are we going to pay for Windows 10 down the line?

What Is Microsoft Saying?

Microsoft has a number of options to play around with. They have us like a ball in the palm of their enormous hands, waiting to be tossed, or shoved deeper into their pocket.

During a presentation at the Credit Suisse technology investment conference in Phoenix, Arizona, Microsoft Chief Operating Officer Kevin Turner said:

“The thing about it is, though, we’ve got to monetize it differently.”

The clearest indicator so far toward a new monetization model for Microsoft products. He’s right. A multinational technology company cannot survive drastically altering their core business model–selling software to people–without having a couple of aces in the deck. In the same presentation COO Kevin Turner hinted much more would be revealed in the summer. The very same summer we are expecting Windows 10 to drop When Does Windows 10 Come Out, How Can You Get It & What Happens to the Technical Preview? Windows 10 is coming soon. Still confused about how the upgrade will work and wondering about the timeline? We have some answers, although more questions remain. Read More .

You can also read the entire Kevin Turner presentation transcript here.


What Are the Options?

We see a few options, actually. Microsoft has built Windows 10 in a pretty organized manner, allowing them flexibility in their monetization choices. Personally, I think we will see a big app store push, along with some nice app subscription models, as we have seen with Office 365. But let’s look a little further.


Similar to other application stores, the Windows Store features a number of paid and unpaid selections. We won’t dwell too long here, as most of us by now understand the ins and outs of an app store. Apps for Windows, as already established with Windows 8, will feature numerous apps.

If Windows is switching to a subscription model Subscribe to Windows 10? Microsoft Evaluates Alternative Payment Models For Their Products In the summer, it was rumored that Windows 10 might be free. Recently, Microsoft's Kevin Turner made comments about monetising Windows differently and that services would be involved. Microsoft is changing its business model. Read More , then it is easy to see many apps following suit and offering their users a tiered subscription model, which isn’t uncommon in existing markets. Along with this, I’d expect some in-app purchases to come our way as part of these tiered service packages.

Windows 10 Store Beta


The difference this time around comes in software we have traditionally considered pay-to-license i.e. you buy it, you use it as much as you want, and Microsoft leaves you alone. With Office 2016 coming in the fall, we may well see an overall shift to an app subscription model along the lines of Office 365 An Introduction to Office 365: Should You Buy Into the New Office Business Model? Office 365 is a subscription based package that offers access to the latest desktop Office suite, Office Online, cloud storage, and premium mobile apps. Does Office 365 provide enough value to be worth the money? Read More which has been by almost all accounts a pretty successful venture.

However, the monetization will only work with new products. Retroactively monetizing globalized free-to-use products such as Skype (I know it is already monetized, I’m talking about the removing the free service) would cause a severe backlash. Microsoft will focus on what they can offer subscriptions for and the services they can bundle together, but it might take a little time to figure out the best subscription combinations.


Remember it is isn’t entirely necessary to sign up to Office 365 and the plethora of other Microsoft services coming our way. Office Online is free Don't Pay for Microsoft Word! 4 Reasons to Use Office Online Instead Microsoft Office Online offers free web versions of Word, Excel, and PowerPoint. Here's why you should give it a try today. Read More and has outstanding functionality, and the same goes for many of the most popular Microsoft services. While Microsoft will undoubtedly monetize where possible, you can still choose from a range of free Office suites Save on Microsoft Office! Get Cheap or Free Office Products Reluctant to spend a few hundred bucks on a glorified word processor? You can get Microsoft Office for cheap and alternatives for free. You've got many options and we offer a summary. Read More .


Bonus: For those readers living in Seattle, you can be one of the first to try Microsoft Wi-Fi, a new, paid service available at a number of city locations. This service arrives with Windows 10 Insider Preview Build 10166, and can be purchased through the Microsoft Wi-Fi app.

Currently only available in Seattle, it will soon be available throughout the US, Canada, and most of Europe. It appears the service will be device specific, and will run from the moment of purchase, regardless of whether you’re connected to Microsoft Wi-Fi. It sounds like an generalized extension of Skype Wi-Fi, with a wider appeal, but we’ll have to wait to test it!


Don’t forget that Windows 10 is only free to those upgrading from Windows 7, 8, 8.1, and potentially Windows RT. Any users making the jump from Windows XP or Vista, or anywhere else will pay for their Windows 10 license. How much? We don’t know for sure, but Windows 7 Home Premium was around $119.99 at release, and Windows 8 was very similar. Perhaps $119.99 is the Microsoft magic number?

Newegg Windows 10 Leak 1


We have already seen leaked numbers indicating Windows 10 Home retailing for $109.99, and Windows 10 Pro for $149.99. The leak, discovered by ZDNet’s Ed Bott, certainly fits well with the opening day purchase price for the past two Windows iterations, so this could be a solid answer to those purchasing a license. The site in question, Newegg, jumped the gun on Windows 8, lending further “credibility” to the leak.

Newegg Windows 10 Leak 2

Of course, it isn’t too late to update. Here are some cheap license options How to Get a Cheap Windows 7 or 8 License Now to Upgrade to Windows 10 for Free Worried about the future of your old or pirated Windows copy? Now is the time to snatch a cheap Windows 7 or 8 license to secure yourself that free upgrade to Windows 10. We show... Read More , if you so choose.

N.B: since the initial Newegg leak prices on the site have been updated and now include prices for 64-bit operating systems, along with two different release dates: 07/29/15, and 08/31/15. The later dates are marked “full version,” so it’ll be interesting to see what that means.

Reducing Costs

The new Windows Update model has been designed for two reasons: Firstly, to keep a vast proportion of consumers on the same version of Windows, preserving our security. Secondly, directly related to the first, is to gradually reduce the cost of maintaining an extensive update program with seemingly no end in sight.

Windows 10 Update

Windows Update will roll out more frequently Pros & Cons of Forced Updates in Windows 10 Updates will change in Windows 10. Right now you can pick and choose. Windows 10, however, will force updates onto you. It has advantages, like improved security, but it can also go wrong. What's more... Read More , updating our systems with the newest and shiniest from Redmond when ready, and Microsoft hope this will be the downward pressure required to slowly make Windows 10 a profitable enterprise.

Microsoft has already reduced costs in other areas, but not as part of the Windows 10 rollout. This month saw Microsoft cull around 7,800 jobs in a move most likely designed to counteract their calamitous purchase of Nokia’s mobile division. Different cutbacks, but cutbacks nonetheless.

Pay for Updates

Microsoft very, very quietly slipped some vital information out into the world at the end of June. I almost missed it myself. It ties in directly to the continually stipulated “Windows 10 and its updates will be free for the length of the device cycle” bit. A vague statement, at best, but we understand. As with Windows XP, Vista, 7, and now 8, each product has a life cycle.

In a slide contained within the Windows 10 Revenue Recognition PowerPoint presentation, the small print reads “which can range from two to four years.” It goes on to say device life is determined by customer type, and that deferral periods may vary.

Windows 10 Revenue Recognition

It isn’t definitive, of course, but if the update cycle becomes monetized after two to four years, Microsoft will have captured a generation of new Windows users without fully explaining exactly what’ll happen at the end of time.

It raises the very serious and extremely valid question of what happens afterwards?

Ad Support

Part of reducing costs might entail entertaining other income streams for Windows 10. Microsoft didn’t hesitate pushing a somewhat ill-advised adware-style update into your system Has Microsoft Installed Adware on Your PC to Promote Windows 10? Windows 10 is coming and Microsoft is going to great lengths to ensure each and every Windows 7, 8, and 8.1 user is fully aware. Is update KB3035583 essentially adware? Read More , and despite the flack this author received when we first discussed the matter several months previous, a great many individuals became very concerned when the update actually hit Can't See the Windows 10 Upgrade Notification? Here's How to Enable It. Are you also not seeing the Get Windows app on your Windows 7 or 8.1 devices? Let us show you how to enable the upgrade notification or cancel the upgrade in case you changed your... Read More their system, with a number of those scrambling for removal guides How to Get Rid of Windows 10 Upgrade Notification in Windows 7 & 8 Windows 10 is coming and Microsoft wants everyone to upgrade. The Windows 7 & 8 popup reminder ensures that even the last person will be aware of this option. Here's how you can remove it. Read More . Would Microsoft consider using the Windows 10 platform to deliver choice adverts to your desktop?

Get Windows 10

To be honest, I cannot see this one happening. I think a serious contingent of Windows users would jump ship to a free service, be that Linux, their mobiles, or even an older, ad free version of Windows. It could be worth holding onto those Windows 7 installation discs and product codes after all!

Novel Services

We’ve been told Windows 10 will appear on novel devices such as the HoloLens 8 Real-World Uses for Microsoft HoloLens Microsoft's HoloLens is cool, but what will you actually use it for? We run down the most exciting possibilities. Read More , or the Surface Hub. Will Microsoft apply a subscription model to modified versions of Windows 10 designed to run specifically on those devices, or any future devices?


The operating system might come free to these devices, but the apps won’t. The HoloLens is going to bring expert opinion into our homes to help with day-to-day tasks, and end-users will certainly need to fund aspects of this program. As the HoloLens becomes established, we might see some downward market pressure as expert individuals, businesses, and organizations jump aboard the new platform. But this could similarly be stifled by as-yet unknown operating costs. Microsoft will run the HoloLens platform; how profitable it will be in conjunction with Windows 10 is completely up in the air.

Other Ways?

Microsoft may well go completely bonkers and work on a referral system: convince three of your friends to buy a Windows 10 license, and you get use of Office 365 for a year. Or use Skype to make five Windows 10 marketing calls, and grab Skype WiFi for a month.

What else? Microsoft may encourage Windows 10 users to develop a Minecraft addiction and then force users to fight to the blocky death in an assortment of arena battles. Or not.

Given the Microsoft purchase of Minecraft, and the upcoming Fable Legends (whose DLC delivery system is akin to Windows 10), could Microsoft be making serious waves back into the gaming market? Windows 10 exclusive games Here's How Gaming Will Work With Windows 10 With Windows 10, Microsoft is bringing PC gaming and the Xbox One together in a big way. Find out what to expect once Windows 10 arrives. Read More would work well alongside the Xbox angle-but could potentially alienate users with painful memories of the failed Games for Windows system, as well as those used to housing everything under their Steam account. Still, Directx 12 looks jolly nice 10 Compelling Reasons to Upgrade to Windows 10 Windows 10 is coming on July 29. Is it worth upgrading for free? If you are looking forward to Cortana, state of the art gaming, or better support for hybrid devices - yes, definitely! And... Read More and could represent a coup for Microsoft and Windows 10.

Windows 10 Will Make Money Somehow

Whatever happens, Microsoft is not going to simply give their flagship operating system away completely free. The free upgrade solidifies their hold on incoming Microsoft users and the expansive plans for cross-platform apps broadens the appeal to users used to using a plethora of devices, wherever they are.

If we consider the Microsoft expansion into consumer hardware, you begin to fully understand their change in approach; no longer bound by software, Microsoft is taking a distinctly Apple-esq route into the future-and we are all going with them.

How much are you willing to pay for Windows 10 and its features?

Related topics: Microsoft Office 365, Windows 10.

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  1. Anonymous
    July 16, 2015 at 12:44 pm

    "Retroactively monetizing globalized free-to-use products such as Skype .......... would cause a severe backlash."
    When did Mr. Bill and Microsoft worry about backlash? As any self-respecting 800 lbs gorilla, they will do anything they want. Considering that the bulk of Microsoft's users, corporate and private, are solidly locked into the MS environment, when MS "retroactively monetizes globalized free-to-use products", the users will have no recourse but to pay up. The users can huff and puff, bluster and backlash all they want but, in the end, they will only have two choices - pay up or switch to another O/S. As your answer to Avery Vander Horst indicates, switching for an average private user is not an option. Corporate users will decide based on cost analysis whether it is financially feasible to switch. Most of them will look at all the money they sunk into Windows over the years and decide to pay up.

    So Microsoft monetizing free-to-use apps is a pretty much foregone conclusion. It will not happen tomorrow or next month but it WILL happen. As far as M$ is concerned, TANSTAAFL, There Ain't No Such Thing As A Free Lunch.

  2. Anonymous
    July 14, 2015 at 10:43 pm

    It was inevitable that there would be a discounted upgrade, instead, it's free for...

    Not XP users, but the proportion of XP systems that would have been capable is limited.

    Windows 7 - compatibility likely, and it gets Microsoft Store on your machine.

    Windows 8 - compatibility pretty much certain, and 8 / 8.1 to 10 is not a huge change, more an update than an upgrade.

    The actual stats for upgraders may be interesting - how many took up previous discounted upgrade offers, versus how many pile in for the free.

    Myself, on Windows 7 at the moment, never saw the need (or the desire) to buy an upgrade to Windows 8, and if 10 wasn't free, probably wouldn't bother - but looking over the preview, can't say I like the look of it, but it does seem to have a little more snap than Windows7 (with all the Aero glass turned on) - ditching some of the eyecandy ought to make it faster

    • Gavin Phillips
      July 16, 2015 at 11:38 am

      I am the same as you, Matthew. Both my desktop and laptop have been running 7, and I'll probably keep going with it for a while longer, at least as a backup throughout the early transition phase. You're also spot on about the XP/Vista capabilities. Perhaps we might see some heavily discounted OEM Windows 10 machines aimed at that market soon after release.

      Thank you for reading!

  3. Anonymous
    July 14, 2015 at 5:09 pm

    GNU/Linux is Free. Windows is not.

    • Gavin Phillips
      July 16, 2015 at 11:35 am

      The classic argument, and its true. But most people don't have the know-how to install a printer, let alone partition a hard-drive and install a massively unfamiliar operating system. It is tired tone, but I understand it.

      Thank you for reading!

  4. Anonymous
    July 14, 2015 at 4:32 pm

    An old line I like to frequent: "Just because I'm paranoid doesn't mean They Arne't Out To Get Me".

    Certainly I'm waiting to see what/how-much from the new MSFT. So far, smiles.

    I went with the currently called "Groove" which let me do some good gigs of d/l for off line listening. Got it on sale and I'm happy.

    (IF) Redmond rears it's ugly former head, fine. The Mac Mini is on standby. A bridge in boogie bag. Hey, I think Win 10 rocks socks. Got build 166 on the 1020 and 920 Lumia along with 166 on Intel/Asus Atom. A data-silo connection occurs with 10. The Data Pandora Box opens.

    Once Win 10 busts the LAN & other data silo issues, it's natural to stay with Azure since it's cheaper and works great with Win 10.

    Google, IBM, Amazon, Rackspace and mas all understand building a centralized data center is more or less the same reason we all have centralized power and not a 3KW generator in the house. It's cheaper.

    If Redmond can move the desktop to Azure with Win 10, it would be the greatest money coup to a sustainable service while changing the cloud computing landscape. I was shocked when I did a quick ROI study of Azure Vs. AWS and Google.

    Still, I believe it's a new MS. If you want an old school hidden motive? I got one:

    Win 10 let's all business and home data slide into the Azure Cloud where MS becomes the default cloud service provider. Sorta like the AT&T was communications days. The big boy provider. Sure other cloud guys would keep the space competitiveness running the rule.

    We see how that works in any capital intensive industry. :/

    Still the future isn't gloom and doom. We all get more for less with our data finally joined. Once loose, MS can only be the best possible stewards else the data and mindset boogie to Amazon, Rackspace, whatever. data won't be locked in old technologies.

    Better think of a way to makeuseof folks that built desktop PC's and servers.

    drive Azure.

  5. Anonymous
    July 14, 2015 at 4:17 pm

    Just another reason to be glad my personal computers have Linux...