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Microsoft Windows 10 subscription strategy "somewhat risky": Telsyte

Brian Karlovsky | Jan. 23, 2015
SaaS strategy offer opportunities and threats for Australian channel.

Telsyte analyst Rodney Gedda has described Microsoft's shift to a subscription strategy for Windows 10 as "risky" following its launch in Redmond, Seattle.

Microsoft has unveiled what it calls a new generation of Windows, which will be offered free for customers running Windows 7, Windows 8.1 and Windows Phone 8.1, who upgrade in the first year.

It will also be delivered as-a-service, "to offer a safer innovative and updated experience for the supported lifetime of the device", according to a company statement.

Mobility has also been marked as a key aspect of the new software, which has been hyped as being seamless across all devices.

Microsoft chief executive, Satya Nadella said the release marked the beginning of the more personal computing era in the mobile-first, cloud-first world.

"Our ambition is for the 1.5 billion people who are using Windows today to fall in love with Window 10 and for billions more to decide to make Windows home."

Gedda said one of the major aspects of the announcement was its move from a software-as-a-product model to software-as-a service.

"It's somewhat risky because Microsoft has a large business in selling product and there's also a large channel business in implementation," he said.

"While I expect that to continue it may have a tougher task convincing people to be a Windows subscriber that ordinarily wouldn't be."

He said the company had moved a lot of its products (Azure, Office365) to a subscription model and that Windows was the last bastion that hadn't fallen under the software-as-a service umbrella,

"But now Microsoft is going to be giving away Windows 10 free for the first year and I expect to see Windows 10 subscription licenses being offered alongside Office and skype and other personal cloud services like one drive," he said.

"It fits well with the model, but the only problem Microsoft might have is plenty of people view it as a perpetually licensed product, which is slightly different to Office."

Gedda said a lot of people expected to pay a premium price for Office, as the premium productivity suite, and that Windows might have more of a stumbling block of getting through the mindset that you have to pay a regular fee for it.

"What makes it even tougher is that large consumer facing competitors like Android, iOS and Mac are generally offered as a free upgrade," he said.

"In the case of apple, it will support it device for a couple of years and then it will sunset, so there's a window of upgrade and how is that going to affect the mindset of the Microsoft user base when they are using iOS and they are getting upgrades free.


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