In the early 2010s, Microsoft faced a crucial juncture with Windows. Windows 7 was a successful and popular operating system, while Windows 8, launched in 2012, sparked significant user backlash due to its radical UI changes, especially the removal of the Start menu. The shift was intended to accommodate touch devices, but Windows Touch never took off, and many users stuck with Windows 7. Microsoft faced challenges with a fragmented user base and public relations issues.
Simultaneously, the PC market was declining as smartphones and tablets gained prominence. Existing users weren't upgrading, and demand for new PCs was stagnant. Competitors added pressure: Apple offered free Mac OS upgrades, and Linux distributions provided a zero-cost alternative. This made charging for Windows upgrades seem outdated.
To address these challenges, Microsoft made a significant strategic decision with Windows 10: offering it as a free upgrade. This move was driven by several factors:
* **Competitive Pressure:** Apple and Linux offered free OS upgrades.
* **Market Decline:** Declining PC sales meant Microsoft couldn't rely on hardware-driven revenue.
* **User Base Unification:** Microsoft aimed to unify its user base on the latest Windows version.
* **Cloud Services Shift:** Sacha Nadella, Microsoft's CEO, shifted the company's focus toward cloud services and subscription models, treating Windows as a continually evolving service.
This strategy was a departure from previous practices, where upgrades cost around $100-$200. Microsoft made the initial free upgrade available for a year after the release. The goal was to maximize Windows 10 adoption, attracting users including those who skipped Windows 8. A larger, unified audience would make Windows more attractive to developers, reduce fragmentation, and ease Microsoft's support burden.
The free upgrade was a strategic bet to reinforce Windows dominance. It allowed Microsoft to target a billion devices running Windows 10, making the platform more attractive to developers and easing the support burden. The new strategy aligned with Nadella's shift towards cloud services, building the business around services like Office 365 and Azure.
Microsoft aimed to make money around the OS via services and software that run on Windows. The free upgrade also paved the way for subscription offerings, such as Windows 10 Enterprise E3/E5, bundled with Office 365 and advanced security tools.
Windows 10 was built to extensively collect telemetry data, providing insights into OS usage, performance, and issues. This data helped Microsoft improve Windows, identify problems, and guide design decisions. The free upgrade ensured a large user base to generate these insights.
However, this telemetry raised privacy concerns among some users, as the OS collected an unprecedented amount of data by default. Microsoft argued the data was anonymized and used to improve the user experience, but skeptics believed the real strategy was to monetize users through their data and attention. Windows 10 introduced built-in advertising and upsell mechanisms, such as suggested apps, promotions for Microsoft Edge, and prompts for Office 365 subscriptions.
From a technical standpoint, vast telemetry meant that Microsoft could iterate on and improve Windows 10 continuously. The company adopted a rapid update cadence delivering major updates twice a year.
The decision to give away Windows 10 also made sense considering the PC industry's economics. PC sales were stagnating, and consumers weren't replacing PCs as often. Microsoft realized it could no longer rely on revenue from new Windows versions driving new hardware sales. In fact, the free upgrade dampened PC shipments.
Microsoft was refocusing its business on the total number of Windows users on the latest product. While Microsoft still made money from OEM licenses on new PCs, growth came from cloud and enterprise services. In the short term, giving away Windows 10 meant foregoing revenue and potentially slowing down new PC purchases. Microsoft calculated that keeping users on Windows was better than risking them switching to a Mac or Chromebook.
Competition from Apple and Linux also played a role. Apple's Mac OS was free to upgrade and positioned as a premium alternative, putting psychological pressure on Microsoft's model. Linux remained a niche product, but a constant thorn for Microsoft among power users. By making Windows 10 free and familiar, Microsoft hoped to recapture those users.
Another factor was piracy and emerging markets. By offering Windows 10 for free, even to those with non-genuine copies, Microsoft aimed to convert pirates into legitimate users. The more people using the platform, the more ways Microsoft could earn money indirectly.
Windows 10 launched in July 2015 with massive fanfare. Millions rushed to upgrade, and the rollout was successful in pure numbers. Microsoft offered the upgrade through a special "get Windows 10" app that popped up on Windows 7 and 8 systems encouraging users to reserve their free copy. Within the first year, over 300 million devices were running Windows 10. From a user standpoint getting a new OS without paying was a pleasant surprise something pretty much unheard of for Microsoft.
The author, Dave, welcomes those who are subscribed to the channel and those who aren't to subscribe in the video.
Simultaneously, the PC market was declining as smartphones and tablets gained prominence. Existing users weren't upgrading, and demand for new PCs was stagnant. Competitors added pressure: Apple offered free Mac OS upgrades, and Linux distributions provided a zero-cost alternative. This made charging for Windows upgrades seem outdated.
To address these challenges, Microsoft made a significant strategic decision with Windows 10: offering it as a free upgrade. This move was driven by several factors:
* **Competitive Pressure:** Apple and Linux offered free OS upgrades.
* **Market Decline:** Declining PC sales meant Microsoft couldn't rely on hardware-driven revenue.
* **User Base Unification:** Microsoft aimed to unify its user base on the latest Windows version.
* **Cloud Services Shift:** Sacha Nadella, Microsoft's CEO, shifted the company's focus toward cloud services and subscription models, treating Windows as a continually evolving service.
This strategy was a departure from previous practices, where upgrades cost around $100-$200. Microsoft made the initial free upgrade available for a year after the release. The goal was to maximize Windows 10 adoption, attracting users including those who skipped Windows 8. A larger, unified audience would make Windows more attractive to developers, reduce fragmentation, and ease Microsoft's support burden.
The free upgrade was a strategic bet to reinforce Windows dominance. It allowed Microsoft to target a billion devices running Windows 10, making the platform more attractive to developers and easing the support burden. The new strategy aligned with Nadella's shift towards cloud services, building the business around services like Office 365 and Azure.
Microsoft aimed to make money around the OS via services and software that run on Windows. The free upgrade also paved the way for subscription offerings, such as Windows 10 Enterprise E3/E5, bundled with Office 365 and advanced security tools.
Windows 10 was built to extensively collect telemetry data, providing insights into OS usage, performance, and issues. This data helped Microsoft improve Windows, identify problems, and guide design decisions. The free upgrade ensured a large user base to generate these insights.
However, this telemetry raised privacy concerns among some users, as the OS collected an unprecedented amount of data by default. Microsoft argued the data was anonymized and used to improve the user experience, but skeptics believed the real strategy was to monetize users through their data and attention. Windows 10 introduced built-in advertising and upsell mechanisms, such as suggested apps, promotions for Microsoft Edge, and prompts for Office 365 subscriptions.
From a technical standpoint, vast telemetry meant that Microsoft could iterate on and improve Windows 10 continuously. The company adopted a rapid update cadence delivering major updates twice a year.
The decision to give away Windows 10 also made sense considering the PC industry's economics. PC sales were stagnating, and consumers weren't replacing PCs as often. Microsoft realized it could no longer rely on revenue from new Windows versions driving new hardware sales. In fact, the free upgrade dampened PC shipments.
Microsoft was refocusing its business on the total number of Windows users on the latest product. While Microsoft still made money from OEM licenses on new PCs, growth came from cloud and enterprise services. In the short term, giving away Windows 10 meant foregoing revenue and potentially slowing down new PC purchases. Microsoft calculated that keeping users on Windows was better than risking them switching to a Mac or Chromebook.
Competition from Apple and Linux also played a role. Apple's Mac OS was free to upgrade and positioned as a premium alternative, putting psychological pressure on Microsoft's model. Linux remained a niche product, but a constant thorn for Microsoft among power users. By making Windows 10 free and familiar, Microsoft hoped to recapture those users.
Another factor was piracy and emerging markets. By offering Windows 10 for free, even to those with non-genuine copies, Microsoft aimed to convert pirates into legitimate users. The more people using the platform, the more ways Microsoft could earn money indirectly.
Windows 10 launched in July 2015 with massive fanfare. Millions rushed to upgrade, and the rollout was successful in pure numbers. Microsoft offered the upgrade through a special "get Windows 10" app that popped up on Windows 7 and 8 systems encouraging users to reserve their free copy. Within the first year, over 300 million devices were running Windows 10. From a user standpoint getting a new OS without paying was a pleasant surprise something pretty much unheard of for Microsoft.
The author, Dave, welcomes those who are subscribed to the channel and those who aren't to subscribe in the video.
Facebook
Twitter