Subscribe to Windows 10? Microsoft Evaluates Alternative Payment Models For Their Products

Gavin Phillips 19-12-2014

September saw our first real experience of the upcoming Windows 10 operating system Windows 9 Leaked Screens Revealing Known Unknowns Windows 9 is dropping its veil. Recently leaked screenshots give an unprecedented insight into what we might expect from the latest iteration of Windows. Read More from industry giant Microsoft. There was fanfare and pomp, raised expectations for the ubiquitous software producers, and the rumor that Windows 10 might be offered as a free upgrade for Windows users. They finally seem to have rediscovered their form through innovation, productivity and integration Will Windows 10 Make Productive People Even More Productive? It's official, the new Windows will be a perfect 10. Why Windows 10? Because Windows 7 8 (ate) 9. And here is what you will find inside the Technical Preview. Read More along with a smattering of style.


However, Microsoft isn’t the behemoth it once was and consumer options are vastly superior to the halcyon days of Mr. Gates et al. Google, Apple, numerous Linux distros The Best Linux Operating Distros The best Linux distros are hard to find. Unless you read our list of the best Linux operating systems for gaming, Raspberry Pi, and more. Read More and even a SteamOS Feel Like Living Dangerously? Then Try Out The New Valve Steam OS Valve has just released their Linux-based gaming operating system for anyone with a spare hard-drive, an NVIDIA graphics card, and nerves of pure steel. Step forward Linux commandos! Read More have altered the landscape.

Windows 10

Consumers have choice. Consumers have wallets. Consumers will go elsewhere if their wallets are being unnecessarily ravaged by a single company.

Windows Needs to Monetise Services

Monetise is a word we have all become accustomed to, but something we haven’t really associated with Microsoft services 5 Free Microsoft Online Services & Apps You Didn't Know Existed When you think of Microsoft, what's the first thing that comes to mind? It might take you a little longer to think of something positive. We're here to help with that. Read More . The payment model at Microsoft has always been ‘pay-to-play’ i.e. give us the money and we’ll send you the software. A safe model, for sure.

Times are set to change. Microsoft Chief Operating Officer, Kevin Turner, is aware that:

“We’ve got to monetise it differently. And there are services involved…through the course of the summer and spring we’ll be announcing what that business model looks like.”

A new, monetised business model focusing on Software as a Service (SaaS) would have to be significantly different to continue meeting current Microsoft expectations. Considering the extremely wide-range of their current user base, the age of some machines 8 Ways You Can Still Use Your Old Windows XP Hardware Microsoft is killing support for Windows XP this April. If you have a computer that runs Windows XP, you should seriously consider upgrading the operating system, or finding new uses for the computer's hardware. Read More and the already confirmed switch to a rapid update model, the number of potential pitfalls are vast. The latter point alone has many business, technical and ICT managers worried about Windows 10, update frequency and security issues contained in updates.

Windows May Need to Consider Different Models

Back in the day (I sound old!) Windows was the gravy-train. The tried and tested model of make software, release software, license software around globe…profit followed a 100% purchase decision by individuals and business owners alike.

Satya Nadella

In order to compete with Android, Windows gives its mobile OEM away. The Bing SKU brings in some money via a number of devices, but Windows simply cannot compete with Google in a meaningful ad-driven environment, plus many of its business licensees would be incensed to encounter advertising within applications once money was handed over.

So the biggest opportunity for Microsoft to regain a foothold in the OS market whilst keeping receipts rolling in is almost exactly what they are doing: building a digital eco-system that hooks into their own services.

Wait, Microsoft Does Services?

I know, right?

Office 365 has so far been a relative hit. For $6.99 per month, or $69.99 per year, a user can install the most up-to-date versions of the entire Office suite, including Publisher and Access. This also grants you a massive 1TB on their OneDrive cloud storage How To Best Use Your 15GB Of Free OneDrive Storage OneDrive gives you a healthy dose of cloud storage for free. Let's take a look at what you can do with that. Read More plus 60 Skype minutes per month.

Even better, add $10 to each of those subscription levels and you can install Office 365 across 5 separate devices, as well as 5 mobile devices.


Microsoft, through this model alone, is not a stranger to subscription based revenue. As operating systems increasingly become fully integrated web access portals, Microsoft, under Satya Nadella, is realising the gravy-train is no more.

But even with this extremely well priced offering, there are both free online Office services 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 (Google Docs) and free Office software services The 5 Best Free Microsoft Access Alternatives for Databases Free database software isn't all bad. This article covers five of the best free and easy to use alternatives to Microsoft Access. Read More (Open/Libre Office) that offer a very similar product for free.

Does Microsoft Have An Upcoming Problem?

It is difficult to know exactly what is awaiting Microsoft and the Windows operating system.

Windows Store Additional Software

On one hand we have a new product entering the market next year that has received considerable plaudits from the extremely critical enterprise software world media.

On the other, it is revamping a tried and tested product for a new era, a new set of digital individuals at a time where so much is in flux – and Microsoft simply aren’t the biggest boys in the playground anymore.

Microsoft Way

If the more lucrative enterprise arm of Microsoft has to follow suit, stormy weather could soon be approaching. That said, with enterprise product sales revenue rising by around 7% to some $9.5bn, and increased sales of hardware products such as the Surface Pro series putting Windows products into users homes, Microsoft have cause for optimism. And when a user has their hands on the hardware, Microsoft can sell the subscription.

What Do We Think?

It is relatively unlikely that Microsoft will suddenly begin distributing their flagship operating system for free – at least not yet, anyway.

But a revitalised Microsoft must realise that offering their operating system at a reduced price would return many transient users back to the fold whilst potentially securing the long-ish term future of the PC/Laptop market. A generation of users are entering their digital lives in a world where Microsoft isn’t always the go-to OS – something they will be taking great strides to remedy.

The most likely scenario is a gradual transition into the new Microsoft model. A basic access model for a relatively low price that can be topped up with individual services, or bundled services, or a number of premium tier unlockable services similar to the Office for iOS Microsoft Launches Office For iPad & Office Mobile On Phones Now Free Office Mobile for Android sneaked into the headlines while the world was watching the arrival of Microsoft’s Office suite to iPad. So, let's give them each the space they deserve. Read More rollout seems logical, but honestly, it is difficult to accurately estimate their approach.

It is an untried, somewhat untested path for Microsoft and we probably won’t understand much more until annual Microsoft Build Conference 2015. And with so much change in the air, even more hinges on the adoption of Windows 10 throughout homes and businesses to reinforce a resurgent Microsoft.

Will you be upgrading to Windows 10? How would you like them to approach their new business model? Or, do you like it just how it is? Let us know your thoughts below…

Image Credits: Satya Nadella via Wikimedia, Office 365 via, Microsoft Way by ToddABishop via Flickr

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  1. jon
    May 11, 2015 at 5:09 pm

    I would never pay a subscription fee for an OS. Services? Maybe... The problem is most services are available free through Google or whoever so I doubt I would be willing to pay for that either.

    • Gavin
      May 11, 2015 at 7:41 pm

      A subscription might be difficult to swallow for some;for others it would offer the perfect setup. Since this article was published we know W10 is to be a free upgrade for many, so there's that. Thanks for reading!

  2. Hugh MacDonald
    February 2, 2015 at 8:22 pm

    I have been using computers since 1983 so I have experienced all the Windows OSes. I think Microsoft could offer Windows 10 at less than 100.00 and this may attract most people who are anxious to put Windows 8.1 well behind them. From what I saw of the Windows 10 recent event I feel that they could have a winner, when polished up.

  3. robh
    December 20, 2014 at 4:26 pm

    I think it highly likely MS will go for a subscription model (or all least offer it as an option) at some future point, perhaps Win10. That makes the issue one of how they do that. There are pitfalls including the pricing model. When I bought a laptop a few months ago the sales drone offered to bundle Office. He didn't make it clear it was a subscription, I had to check. His "special discount price" for year 1, was about the same as I paid for "Office Home 2007" on DVD licensing 3 PCs. I declined. I think MS have a responsibilty to make it abundantly clear to the least technical of users just what they're getting rather than allow sales persons to get them unknowingly signed up to a subscription.

    I've long thought MS should offer an annual Windows release set refresh at a fairly low price so that when your PC needs a rebuild you don't end up having to load the original and, by the time the PC needs it, probably a fairly old copy from backup or DVD then apply service packs and accumulated patches.

    Then there's the issue of differential pricing between corporate and home users. It's the reverse of the normal situation where corporate buying power gets them a reduction relative to the rest of us, MS like to charge them substantially more. That's a problem if those customers are getting the same thing but paying more. The only acceptable option is to charge more for providing more and there are opportunites there like software facilities to keep the corporate fleet of networked PCs on identical release sets with minimal support effort.

    Of course the Linux afficianados have crawled out of the woodwork to say what a wonderful alternative that offers. Well it may be true for a certain class of users but that's a relatively small group, yes I know, globally millions but view that in the context of well over a billion Windows users (Linux gets under 1.5% Windows around 90%). The existing userbase has a level of familiarity with Windows and Windows apps. Apply for an office job requiring experience with MS Office and try telling your prospective employer "I've not used MSOffice but LibreOffice is similar" - you'll lose out to an applicant with MS Office skills.

    Many will use Windows in the workplace and won't welcome the need to think differently when they get home to use some other OS (and apps).

    In any case the OS is fundamentally just there to provide the environment for apps. Nobody runs a bare OS with no apps. Apps are what matters. I'm old enough to remember the arrival of VisiCalc, the first credible spreadsheet (and, arguably, the first "killer app"). The demand from users then was "I want visicalc". They couldn't care less what hardware or operating system it required they just wanted to be able to access the functionality that (very basic by todays standards) spreadsheet offered.

    Non technical users of Linux are a very small minority, often because a tecchy relative has sorted them out with a second user PC they've set up for them or its someone on a low budget and has taken the time to do it themselves to get a nearly free PC (and probaly learnt so much in the process they can now be considered tecchy!). Yes sure there are many Linux apps which are free functional equivalents of Windows apps but the environment richets in varieties of app is Windows. That's one reason why Apple used to make so much noise about "there's an app for that" on iPhone before Android became so popular. They were selling the hardware and OS on the back of the apps. (The second reason is that Apple make a lot of money from the very large share they take from app developers' earnings).

    For non-technical users their own alternative choice to Windows is Mac or tablet.

    If I was the decision maker at MS - if they're reading, I'm quite ready to offer my services (for a fee...) I'd offer Win10 as an upgrade to a subscription service at a price point that would ensure very wide uptake, with a higher charge for a non-subscription version at a higher price. The less technical users will be difficult to tempt into upgrading and they'll need to be clear on the cost-benefit position.
    New users would pay a bit more. In both cases I'd make it clear that this is something of an introductory sale offer with a return to full price in perhaps 6 months time.
    I'd license it per device but where multiple devices are involved the additional copies are discounted if bought at the same time.
    Unlike Adobe's subscription model the decision to exit subscription mode must leave the user with a working version but no more updates. The risk that some of those updates will be security critical should be a strong enough enticement to keep paying.
    The Windows subscription could be bundled with Office at a further saving if bought at the same time.
    The ultimate aim would be that everyone gets Windows & Office on an affordable subscription.
    My intention would be to make it a no-brainer to upgrade and quickly to a combined Win/Office subscription.
    For me with 100Mbit broadband, internet software downloads are not an problem. It's easy to forget that 5Mbit is common and there are millions of users on way below that. The sales model needs to pay attention to their predicament and to provide alternatives such as a DVD software delivery and update distribution mechanism. That would imply hassle and cost for MS but users could be given an annual option to buy the upgrade on DVDs.
    Another issue is license validation. Adobe require occasional online verification. MS have that annoying hardware profile check that might pop up after repairs. There must be better solutions .

  4. ed
    December 19, 2014 at 10:02 pm

    I don't want a perpetual subscription to Windows when no other OS offers this. Android comes on phones, tablets and other devices without a subscription, so does Mac OS X, Chrome OS, iOS, and Linux distros. No one would buy into this model and I'll bet most people would stick to Windows 7/8/8.1 for as long as possible if this became the norm with Windows 10.

    On the other hand, if the full version of Windows 10 was priced at $49.95, I would buy it for any PC builds in the future and not have to deal with wondering which Linux distro is not going to give me hardware accelerated video, or not see the scanner on my MFP, or not pick up my wired/wireless network card, etc...

    • Gavin
      December 20, 2014 at 5:02 pm

      If they offered the OS at $49.95, do you think you would have to buy add on packages, or tiered services?

    • Ed
      December 21, 2014 at 4:31 am

      I would pay $49.95 for full Home Premium, but they would be fine to charge extra for their media center package or upgrades to a Pro or Ultimate edition. If they had an option in the Home Premium during install to subscribe to Office for $6.99 per month for the first year, that would be fine too.

    • Gavin
      January 15, 2015 at 9:11 am

      How long would you expect the OS lifecycle to be based on those numbers?

  5. dragonmouth
    December 19, 2014 at 7:44 pm

    Microsoft releases a preview of an O/S and, like Pavlovian dogs at a sound of a bell, all the Windows users drool.

    • Gavin
      December 20, 2014 at 5:01 pm

      I guess you won't be first in the queue then?

    • dragonmouth
      December 20, 2014 at 7:43 pm

      I won't even be the last one. :-)

  6. Andy K
    December 19, 2014 at 4:17 pm

    I have always been bothered by PC manufacturers believing that they had to install any OS on their units in order to sell them. I firmly believe they should inform customers of alternatives to the proprietary software they are installing and firmly believe in freedom of choice where the OS is concerned. The fact that Windows is for the most part thrust onto the consumer virtually without them knowing of any alternative is nearly criminal in my mind. Having used Linux in one form or another over the last 8+ years, and overcome the hurdles that most average users would ever encounter, I have a hard time digesting why people buy into the scheme as many of the newest versions of Linux can now totally replace Windows for the average PC user. I myself would never pay out of my wallet to use a proprietary system when I can do equally well with something free. On a side note, I would never do business with a PC manufacturer that will not sell me a PC without and operating system installed. I have actually installed the latest build of Windows 10 on a spare PC to give it a go, it looks much like Windows 8 but as it is still incomplete I can't really make a call as to whether or not I actually like it. As far as I am concerned if I totally HAD to have a PC running Windows, I would still stay with Windows 7.

    • dragonmouth
      December 19, 2014 at 8:14 pm

      "I have always been bothered by PC manufacturers believing that they had to install any OS on their units in order to sell them."
      Blame it on corporate users. When they buy thousands of PCs at a time, they want them to be turnkey and, because money talks, hardware manufacturers are eager to oblige. To maximize their profits, PC manufacturers buy the O/S at bulk prices from M$. M$ is glad to sell thousands and millions of copies at a shot, the more copies installed in the wild, the better for them. M$ sales contract, however, stipulates that each PC built and going out the door must have their O/S installed, otherwise the manufacturer pays list price for each copy of the O/S. That leaves the PC manufacturer with very little incentive to provide PCs without any O/S or with Linux.

      Those restrictive sales contracts were part of an anti-trust case filed by the government against Microsoft in the mid-1990s. When the case was resolved, DOJ slapped M$ on the wrists and made them promise not to do it again. By that time M$ achieved a virtual monopoly and a lock-in of all their coprporate clients so they could afford to back off the exclusive contracts.

  7. Pierre
    December 19, 2014 at 3:55 pm

    won't be "upgrading to windows 10" - any-time soon.
    - buying any hardware, in order to support it, - won't happen.
    and NO - a new PC is not on the horizon.
    - not going to happen.

    • Appleguy
      December 19, 2014 at 6:27 pm

      Huh? Windows 10 works perfectly fine on my 13 year old laptop.

    • Gavin
      December 20, 2014 at 5:03 pm

      Just a matter of how long it runs fine for...but glad to see that it is up and running on some older devices. Dual booting it on my laptop today FOR SCIENCE.

  8. T
    December 19, 2014 at 2:25 pm

    If MS offers Windows10 for more than $29.99 they are relinquishing the OS market share for home use to the competition. Enterprise will be slower, but it will happen eventually too. Look at the reluctance of companies to adopt Win7 from XP that is still so prevalent across the industry. Consumers are already disgusted with the roll out of Win8 and MS has done nothing to bring them back. Charging a subscription fee to go through the hassle of an OS upgrade is silly for a single user and insane for an enterprise environment with legacy systems that don't play well with anything later than XP. And one final question: so if you have a subscription for your OS and you fail to renew what happens to your data? Yeah I can't imagine a corporate IT being held hostage to an OS that it no longer wants to support. That certainly has been the case with the Win8 upgrade that never happened.