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Clear as mud: Microsoft struggles to define 'free' for Windows 10

Gregg Keizer | June 23, 2015
Windows 10's prime spokesman said Sunday that previewers would get a free copy of the operating system.

Although some have called on Microsoft to more closely conform to Apple's approach — to eliminate confusion, to earn even more goodwill, to drive an even faster adoption of Windows 10 — there are good reasons why it has not.

Tops on that list is money: Unlike Apple, much of Microsoft's revenue comes from businesses. That revenue is not trivial. Jan Dawson, principal analyst at Jackdaw Research, has estimated Microsoft's commercial licensing revenue from Windows at around $900 million per quarter, or $3.6 billion annually. Microsoft cannot simply cede those billions and the ancillary Software Assurance annuity program: Shareholders would not stand for such fiduciary shenanigans.

Microsoft's difficulty defining "free" has, to a large extent, resulted from its corporate split-personality which tries to satisfy both consumer and commercial. It cannot announce "free to all" without a flurry of fine print.

Also in play is the symbiotic relationship Microsoft has with its hardware partners. Unlike Apple, which sells its own devices and essentially hides the cost of its OSes within them, Microsoft — its own Surface line notwithstanding — must rely on OEMs (original equipment manufacturers), and must charge them for Windows to generate revenue.

That relationship requires treading carefully, something Apple need not think about. It wouldn't be a surprise to find out that Microsoft's free upgrade — one year from July 29 — was made a limited-time offer because OEMs objected to anything longer. Historically, OEMs have gotten a bounce in sales after a Windows launch — Windows 8 was the exception, due as much to the macro economics of shipment declines as to its own poor reception — which will almost certainly take a hit from the free upgrade.

That's not to say some of this mess was not self-inflicted.

When OS boss Terry Myerson first announced that Windows 10's upgrade would be free, the company did not explicitly call out the Windows Enterprise ban, relegating it to a footnote on a website page. Later, of course, the company's public message swung from side to side on the pirates-get-the-upgrade and the latest about Insiders. It took Microsoft months to name prices for Windows 10 after the one-year free offer expires, with the company sticking to an old-school schedule for that disclosure even as it discarded the past in many other ways. And the firm has yet to define how long users not running Windows Enterprise will receive free updates and support.

Microsoft has 37 days to spill the rest of the details about Windows 10. Expect a data dump, more questions, more muddled answers.

 

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