Windows 365: Not coming to a PC near you

Windows 365: Not coming to a PC near you

Summary: Is Microsoft planning to turn Windows into a subscription service akin to Office 365? Some leakers say yes. My sources say no. Here's why.

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Microsoft is in the midst of pivoting Office from product to service. Will it do the same with Windows in the not-too-distant future?

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In various episodes of our Windows Weekly netcast, Paul Thurrott and I have both speculated that something like a "Windows 365" subscription service could be how Microsoft plans to continue to make money off Windows. Earlier this month, a list of the alleged status of a number of Microsoft's future products, including "Windows 365," has been making the rounds.

After asking around a bit, I believe that Windows 365 is not real, not in development and not on the roadmap.

I've heard from my contacts that Microsoft is not working on anything called "Windows 365." Nor is the company planning on trying to get consumers to "subscribe" to Windows releases the way that Microsoft has convinced more than 3.5 million consumers to subscribe to Office with Office 365 Home and Personal. 

Windows is a platform, not a service. As @cspkcats put it, consumers buy Office, but they don't usually buy Windows, as most just get the latest release preloaded on a new machine. It sounds like the plan -- at least for now -- is for the Microsoft OS team to continue to build and sell different Windows SKUs, not subscriptions.

This does not mean that Microsoft is betting against "One Cloud" becoming one of the lynchpins of Windows. Already, it's easy to see that Microsoft's plan is to encourage users to save as much of their music, photos, files and data in OneDrive and keep storage on devices to a minimum. Perhaps the next natural step will be for Microsoft to encourage Windows users to "sign in" -- like some do now with Office.com or Chrome -- to access their cloud-stored apps, files and data more easily.

How Microsoft charges for Windows is changing -- both for consumers and businesses. What might have seemed logical and viable at one point may no longer make sense given new market dynamics.

For business customers, Microsoft already sells Windows as a subscription. It does this via its renewable enterprise volume-licensing agreements and Software Assurance. Update: As @jamesmlarson noted on Twitter, Windows Intune, Microsoft's device-management and security service, is another way business users can "subscribe" to the enterprise version of Windows today.

On the consumer front, Microsoft already is making Windows free on phones and tablets with screen sizes of under nine inches. The Windows 8.1 with Bing SKU -- which may or may not be completely free to OEMs (Microsoft officials haven't actually said) -- is one of the versions of Windows the company is using to try to stay competitive in this space. Maybe the "Modern" SKU that is rumored to be a mashup of Windows RT and the Windows Phone OS will be another.

Microsoft's evolving business plan calls for reliance on services like Skype, Office 365, Xbox Live, Bing and its advertising, etc., to offset revenue losses from the decreasing price of Windows itself. Maybe we'll even see Microsoft combine a bunch of these consumer subscription services -- say, Skype Premium, Xbox Music Pass, Office 365 -- into some kind of unified subscription bundle somewhere down the line.

Bottom line: Microsoft is definitely all-in with subscriptions. But Windows 365 or anything like it isn't in the cards, my sources say. Fake list is fake.

Topics: Cloud, Microsoft, Virtualization, Windows, Windows 8

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • "even see Microsoft combine a bunch of these consumer subscription service"

    Be a good idea!!

    With so many "free" offerings available, increasing the perceived value of their offerings into a bundle may well be a good move.
    People who might not be interested in a service or 2 might well be prepared to shove an extra dollar or 2 onto the price of a bundle subscription.
    Boothy_p
    • Bundle?

      Nope. Not going to pay for something I will not use nor want.
      wgcross2
    • I agree bundles could be a good idea

      It’s convenient to have multiple services bundled together, which is why a lot of people use Google’s ‘free’ services -- the inferior ones benefit from being tied to the superior ones. Apple did the same with effectively tying iOS apps to their successful iTunes business, which helped make the App Store successful.

      For those who object to the ad-driven model (as I do), low-priced subscription bundles without ads are a good alternative. By offering them, Microsoft could do well with those who care about privacy -- particularly if they can create a semi-independent EU subsidiary with the ability to reject invasive information requests from the US parent firm (which can be demanded by the US authorities). If Microsoft shift towards an ad-driven model without ‘premium’ alternatives paid for by subscription fees instead of ads, I may switch to Apple -- or even back to Linux.

      What I’d appreciate even more would be if Microsoft worked to make their platform more service-provider-neutral. It would be convenient to, for example, be able to change the service provider for storage, music, etc., but still be able to use the Microsoft apps, with full integration. It would be a drastic change to the business model, but by collecting a share of the revenue (whether subscription fees or ad revenue) from service providers, Microsoft could make their platform very attractive to those who don’t wish to be locked into a single service provider (e.g. Google or Apple).

      The big risk, as I see it, is competition authorities. With the rise of tablets and smartphones, Microsoft should arguably be given the same freedom with Windows as Apple and Google are given with iOS/OS X and Android. However, competition authorities are often slow to realise that the world has changed. The web browser ballot screen here in the EU is one such example. It’s required on Windows PCs, but nothing similar is required on Android or iOS, which dominate the phone and tablet markets.

      Another example where competition authorities have been slow is in dealing with Google’s advertising/search dominance. Google should arguably not be given freedom to tie anything to their dominant advertising/search business, but intervention by competition authorities has, to date, been limited and ineffective. The talk here in Europe of treating Google like a monopoly utility is a move in the right direction -- unless Apple, Microsoft or someone else manage to break Google’s dominance and demonstrate that the market is not a natural monopoly like utilities.
      WilErz
  • Think you are hitting it.

    Eventually, for all but the highest level versions of Windows the OS will likely be "free". But for more than a rudimentary set of functions add-ons or a subscription to cloud-based services will be needed. For consumers it will be cheap and easy and a no-brainer. The XBOX services are a good model. For professionals, they will either have "professional" packages (think Office, etc.) or "developer" packages (think Visual Studio, Azure, etc.) The rest, they are probably large enough to be under one of the existing enterprise subscription/licensing schemes (since some may NOT want employees having to have continuous cloud access to operate).

    Apple does it to keep their users in the fold (and sell upgrade hardware). But with the exception of Surface and XBOX Microsoft has no such flock. But they have OEMs, who are likely getting more and more chafed they pay for Windows but not for alternatives like Chrome and Linux. This solves that too.

    And will eventually even let Microsoft move Windows to more of an OSX model. Then they can release a "big bang" version (think like each of Apple's cats and now Mavericks) and then smaller incremental updates. But like Apple, even the big updates are really service packs with a few "hey, look at this" things thrown in. Think how long OSX has existed now. And no one there is talking about an "OSXI" at all. Probably iOS will slot in there in the end.

    It would just be "Windows" after that. And a lot easier on Microsoft.

    Though it would prove how badly RT was handled. If they had done that more like iOS, it would have been a lot easier to handle. And evolved Windows (read, no Metro) into it like Apple is doing. Oh well...
    jwspicer
    • The OS does yuo no good whatsoever without the latest hardware.

      If you want to "giveaway" entry-level Windows, give it away to OEMs in exchange for crapware-free hardware. That creates an incentive for OEMs to stop accepting money for crapware installed on their systems.
      M Wagner
      • OEM's are going to stop

        a revenue stream because they get Windows free. Supply and demand will affect pricing more then free windows. Free Windows to OEM's will jsut increase the OEM's profits.
        Orlbuckeye76
      • Went through this double talk parsing of words with Apple back around 2006

        Ha!! This is so so funny. I really really hope that Mary Jo reads this comment I am about to make and thinks about it really hard and can maybe comment back. I say this because for once we have a writer here who has written an article that is like a hammer hitting the most important nail in IT in the years to come, but I feel she hasnt squarely hit the nail on the head quite yet.

        I completely believe that that Microsoft is simply avoiding the issue with a careful parsing of words and a misdirection of the true issue and the questions it leads too about Microsofts long term plan for migrating their software towards an entirely cloud driven system where they are no longer reliant on sporadic "purchasing cycles" as opposed to the far more reliable income stream a subscription based service would be able to supply them with.

        I went through this whole parsing of word issue years ago when Apple had done the "carefully crafted statement" thing in regard to a hole that had been found in numerous wireless caeds for laptops, Macbook cards included, and Apple instead of saying "we have been alerted to the apparent problem and are looking into it ourselves and if there is a definitive problem we will find it for certain and fix it", instead Apple danced around releasing statements about "what had not been told to them", and what they "were not made aware of". And in the end they released a patch that clearly fixed the very problem at hand that was made public.

        Now we have Microsoft doing pretty much the same kind of "issue avoidance song and dance".

        And the question should always be asked, "why would this large company not just say the facts straight up?? Why give answers to questions that only answer some specific point as opposed to answering truthfully was is really being asked?"

        With Apple, it was easy. As always with Apple they had what they felt was a flawless reputation of delivering devices that were never at risk because they always fixed an issue before it was in the general public knowledge and become a problem. For Apple to say, "yes, someone has told us there is a problem, but they havnt told us all the details so we have to figure it all out after the fact" is something they didnt want their fans to hear or think about.

        And with Microsoft and some kind of OS subscription being Microsofts eventual long term goal becoming defacto knowledge up for endless debate in the upcoming years before something even workable is made public, it could cause IT "riots in the streets" among many who dont like the idea at all.

        Lets just look at Microsofts tawdry deflection of the issue:

        "I've heard from my contacts that Microsoft is not working on anything called "Windows 365." Nor is the company planning on trying to get consumers to "subscribe" to Windows releases the way that Microsoft has convinced more than 3.5 million consumers to subscribe to Office with Office 365 Home and Personal."

        Now, lets give Microsoft EVERY single benefit of a doubt about their truthfulness in that statement.

        Here is ALL that they have said:

        1. There is no product "CALLED WINDOWS 365" being worked on

        2. Microsoft does NOT plan on the public subscribing to "WINDOWS" much the same way as they do for Office 365.

        Now, what that DOES NOT SAY:

        1. That Microsoft will NOT eventually introduce a significantly new kind of subscription OS that IS NOT WINDOWS, but something quite new. And that this NEW OS will not be offered as an alternative to Windows and that it will be subscribed to.

        2. That Microsoft is NOT planning that when initial offerings of the subscription OS and related hardware become available that traditional Windows will certainly still exist, and it will be a long term plan and process of weening the public off the "paid for" Windows OS system they use today and onto the new and not yet named OS of the future.

        What Mary Jo needs to ask Microsoft is "is there any plans of any kind in the works, independent of 'name' or independent of any particular thing or set of things that Microsoft may be able to use to respond in the negative, simply dose Microsoft have plans they are at least considering or more, that an operating system of some kind will be offered in the future by way of some kind of subscription or pay as you go system, that will amount to what we generally think of as a cloud based service or system?"

        Forget names, forget specific terms that Microsoft could use to say, "we just dont think of this as a typical operating system, this new thing we want you to rent from us", when in fact it will end up doing pretty much what we expect an OS to do, only by subscription.

        I think its pure lunacy that Microsoft isnt even thinking about and certainly working on ideas that will eliminate the "buy your OS licence" business model that has begun to not only be antiquated, but financially disastrous as evidenced by peoples unwillingness to purchase a new OS licence within a reasonable period of time. XP taught the ENTIRE software community just how bad this can get. Its the worst.

        There are far far far to many business advantages for Microsoft not to want people to one day find renting your entire computing experience form them. The difficulty for pirated software to be distributed, the control over your data and content, the walled garden, the confidence a monthly or yearly revenue stream brings, its impossible to have a company with Microsofts position in the marketplace and the challenges it faces, and that EVERYONE knows about to not be working towards this kind of solution, when every other piece of evidence indicates that both Microsoft and others are already doing vast amounts of work to make "the cloud" the go to resource of the future.

        Ask them the big and direct question with "no outs" allowed. Either they are shooting for an eventual cloud based "OS kind" of based thing or they are not. Dont let them off the hook with misdirection and cleverly parsed statements.
        Cayble
  • OEM Windows

    I always wondered why they (MS) offered an OEM flavor of the professional versions. It I wonder if it wouldn't have been smarter to only offer the home version in OEM and keep the professional version Volume License only.
    I wonder what effect changing to this model now might have. I'm seeing educational institutions and non profits going with Google and Amazon cloud services over Microsoft already.
    Tablet_Dude
    • Enterprise is the Volume License version

      Professional is usable on that same volume license, but Enterprise is really the expected version.
      grayknight
    • K-12, yes, but not universities. They are going with Microsoft ...

      ... mainly because college students need a great-deal more than personal productivity and consumer grade tools. They need discipline-specific research and production tools. Microsoft is very interested in enterprise customers.
      M Wagner
    • KIS

      I say keep it simple -- I help a small business with their 5 computers and they need the Windows professional versions. I don't want to screw with the volume license agreements and licensing. By the time a Windows version is obsolete, I replace the obsolete operating system and computer with a new computer.

      Unfortunately, the new licensing activation process for Office 2013 is very inefficient and frustrating. Really don't want to deal with that with the operating system as well.
      rich3page
  • I Think Everyone Can See The Writing On The Wall...

    The hey day for Windows is over.

    You have to understand the psychology of the consumer as it pertains to Microsoft.

    Microsoft as a company and Windows as a software product were both "tolerated" by consumers, but never admired or desired.

    Why just the other day, a laptop I have running XP (with its sole purpose being to monitor my security system), blue-screened out of the blue (pun intended).

    That's going to require a tribute of several hours of donation to that favorite MS monster we've all visited at one time or another, The Microsoft Time Wasting Demon.

    That's why Windows is history and MS is not far behind!
    orandy
    • Kind of hard to take you seriously anymore...

      Using an OS from 12 years ago as a benchmark for a modern company is a pretty bad idea...
      ForeverCookie
      • Right

        I could not have said it better myself. Someone using an old OS on probably a very old computer, and they want to complain. What some of these slow people fail to realize is that even with projections out to 2017 and 2018, they're showing PCs down as compared to today but not non-existent. Even when tablets are supposedly take over, PCs won't be that far behind where they are now or the numbers for tablets. School systems, colleges, governments, and big corporations with 300 office buildings are not getting rid of PCs anytime soon. All that means Microsoft and Windows will be in business at least for the near future. And the more they move toward One Windows and One Microsoft the more all their platforms help each other. They're making money hand over fist with Office 365, and there will probably be a big jump in Windows 8.x and Windows Phone 8.x numbers by the time Valentines rolls around and the holiday season is over. Not that doesn't mean Microsoft won't continue to price slash. We live in a world now where everyone expects to get something for almost nothing. They'll have to adjust price to the current market
        Sonic98
      • Well it is 'orandy'.

        We all should know by now that facts and sensibility have very little in common with his comments. I am constantly surprised at the volume of problems he has with running any Windows device, it is obvious that anything with a Windows Logo on it only sees a 'bulls eye' when orandy is around. If it were me and I had all those problems with my antique computers running antique software and still getting antique BSOD errors when no other Windows user has ever seen one in the wild in years, I don't know . . . I guess I would go back to using Macs and my Ubuntu Desktop.
        The Heretic
        • Still black screens though

          Last week on my HP laptop (Win 8.1 update) after an HP Bios update I had several Black Screens of Death with complete Keyboard lockup when trying to activate some applications (Typically apps I purchased from the Microsoft Store). Three hard reboots later the issue appears to have gone away, but this kind of thing is still scary for the average user.
          stillgolfing
    • Welcome to 2014.

      I don't know why you are still running an XP laptop, and complaining about it too. XP is history, as we all know, get with the program.
      xelsm
      • Some people refuse to move on.

        Wonder why he's not using DOS prompt for everything?
        Foreseen
      • Why Still Running XP?

        Well, for one thing, I had to install XP on one of my computers. I have a $1,500 24-track audio recorder that I use occasionally for live music recording. It requires either XP or Vista to transfer data from the recorder into Windows. I can't justify a new recorder, but I can justify maintaining an XP installation with limited local network access for the few times a year I need to transfer the data.
        rich3page
    • I would love you to tape that call and post it.

      I can imagine the conversation when you ask for support on a no longer supported platform.
      The Heretic