Microsoft's giving away all versions of Windows on devices smaller than 9 inches was a shocker -- but could a bigger one be on the way? Will Microsoft eventually give away all versions of Windows for free, including those on traditional computers?
Microsoft decided to give away Windows on devices under nine inches for free for a simple reason: It had to. Its mobile strategy for both phones and tablets simply hasn't been working. Device makers haven't flocked to the devices, and neither have consumers. When you're a front runner, like Apple, you don't need to make these kinds of drastic moves. But when you're behind, you're forced to.
It's hard to know exactly how much money Microsoft is forgoing by giving away Windows on small devices, but it's not likely to be a tremendous amount. The New York Times estimates that Microsoft gets on average $15 per license per Windows Phone and small tablets. But keep in mind that the vast majority of Windows Phone devices are sold by Nokia. Given that Nokia will soon be owned by Microsoft, that means that Microsoft wouldn't be getting that revenue, anyway.
As for Windows tablets, the biggest seller has been Microsoft's own Surface line of tablets, and not a great deal of Windows tablets under nine inches are being sold. So Microsoft isn't giving up much revenue there, either. The company is betting that it will more than make up in lost revenue by the money it gets by people using Microsoft services on the devices, including Bing, Outlook.com, Bing Maps, OneDrive, and others.
Microsoft is probably right. Giving away Windows on small devices is a gamble, but it's a smart one.
But how about Microsoft's onetime crown jewels, Windows on traditional computers? Might the day come when Microsoft gives that away as well? The Motley Fool's Sam Mattera, writing for USA Today, argues that Microsoft will eventually give away all versions of Windows, because it will be overtaken by alternate operating systems, notably Chrome and Android. Microsoft, he believes, will give away Windows so it can make up the revenue with its services. He says:
"The days of charging for an operating are effectively at an end. With Android, and some to extent Chrome OS, Google has forced Microsoft to fundamentally alter its business model. For most of its history, Microsoft's business was built around selling Windows licenses -- those days are over."
I don't see that happening, at least in the future as far as anyone can project. Windows still has an absolutely dominant position on traditional PCs, and will continue to have one. Chome is a very nice, lightweight operating system, but it's not going to replace Windows. Android is fine for portable devices. Not for traditional computers. And even though PCs sales continue to shrink, plenty of them are sold every year --- some 263 million desktops and notebooks a year in 2015, according to Gartner. There's no way that Bing searches and other Microsoft services can make up for that lost revenue. For-pay Windows on traditional PCs is here to stay for the foreseeable future.