The idea that Microsoft would eventually unveil a subscription licensing model for Windows 10 -- the so-called Windows-as-a-Service (WaaS) model -- has been bandied about for a while now. This week Microsoft made that idea real, but only for enterprise customers. At its Worldwide Partner Conference (WPC) in Toronto, the company announced the details of Windows 10 Enterprise E3 and Windows Enterprise E5.
Both of the new Windows 10 variations will be subscription options for Windows 10 Enterprise (which may explain why Windows in the enterprise was not part of the Windows 10 free upgrade program that ends later this month). Both Windows 10 Enterprise E3 and E5 will also bundle other Microsoft services, and include Office 365 and Enterprise Mobility + Security -- a set of tools for managing mobile apps and devices and integrating them with a range of enterprise cloud services.
Windows Enterprise E5 will also include Windows Defender Advanced Threat Protection, a cloud-based, post-breach detection and remediation service that Microsoft unveiled in February (and has offered to testers from the general public since May).
A change from the status quo
The move represents a distinct change from Microsoft's tradition of perpetual licenses for Windows, though those licenses will continue be an option. The Windows-as-a-Service option may be particularly attractive for smaller organizations or those with limited IT resources since it will drastically simplify Microsoft's often byzantine licensing. The subscription option also allows Microsoft Cloud Solutions partners to resell and manage licensing for an organization.
The WaaS option also moves Windows from per-device to per-user licensing. Although many software, cloud service and even IT or mobile/device management vendors have moved to per-user licensing in recent years, doing so with an OS is new. Depending on how PCs are deployed, the change could mean a cost savings or a cost increase for organizations. For example, if a company has a large number of PCs shared by multiple employees -- more users than PCs -- licensing costs could go up.
A strategy unlike other platforms
While the change is striking compared Microsoft's traditional approach, it's even more noteworthy compared to other platforms that have been gaining ground in the enterprise. Apple's macOS and iOS, and Google's Android and Chrome OS, have all made in-roads into companies big and small. On these platforms there is no license fee for the OS itself. It comes pre-installed on hardware and updates are free for both consumer and business customers. In short: There is essentially no license fee beyond the cost of a device. (Management solutions in business settings may require license fees and there are often a range of options available from a variety of vendors -- many of which also support managing Windows 10 devices.) But for Apple and Android hardware, the actual OS costs nothing.
This could prompt companies to explore alternate platforms to Windows 10. Although there are circumstances where this isn't ideal (or isn't ideal across-the-board), it would be worth it for businesses to do a total cost of ownership comparison over a span of several years. That way, enterprises would know if they could save money by moving away from Windows instead of adopting this new model or continuing with the more-traditional perpetual license.
It's also worth considering whether Microsoft will continue to offer a perpetual license option in the future. Although it's unlikely the company would abandon this option anytime soon, Microsoft has been moving many of its offerings in this direction; the end of perpetual licensing is at the very least a long-term possibility.
In doing a comparison, it's important not to focus on just the strict device cost plus license cost, but also to consider other factors like employee choice, easy of platform integrating with legacy systems, overall support costs, additional infrastructure needs for managing other platforms, and the costs of retraining of IT support staff.
All about the bundles
Although it's easy to focus solely on the per-device/per-user costs and the change in licensing, it's also important to note that Microsoft isn't selling a subscription for Windows 10 Enterprise in a vacuum. The company will be bundling it with other significant services like Office 365 and Enterprise Mobility + Security. This is a major value-add. It offers one-stop licensing, and bundles together the primary Microsoft products many organizations rely on. That makes the option potentially more attractive for both Microsoft and businesses.
For Microsoft, the bundle creates a complete package of services to offer. It ensures that organizations sign up for both Office 365 and Enterprise Mobility + Security -- both of them solutions that extend beyond Windows 10 and can be used with other platforms, including iOS and Android. Being user- rather than device-based, this bundle should allow users under the new subscription to install Office 365 on Macs or mobile devices as well as Windows 10 PCs or devices. Similarly, it seems likely that Enterprise Mobility + Security will continue to offer management of non-Windows devices as Enterprise Mobility Suite did. As I wrote earlier this year, this approach ensures Microsoft a place at today's multi-platform table and delivers value beyond just the PC.
For organizations, a one-stop shop that offers all of these capabilities is going to be very attractive, even if they're not all used across the board. An organization may still choose to use third-party enterprise mobility management (EMM) solutions for its non-Windows device management, but would still see advantages from consolidating Windows and Office 365 licensing. ZFor some, it might be worth relying completely on Microsofs solutions, depending on cost and feature comparisons of the bundles and other options. Again, a thorough and across-the-board analysis would be important before making that decision.
A change that deserves serious consideration
Ultimately, Microsoft has chosen to deliver an intriguing option for enterprises. Many may find it to be a postitive change, others might determine the opposite. It remains unclear how this approach will evolve over time or whether it could eventually supplant traditional options.
IT has been in the midst of a transition for several years now and this change may mark one of the most significant shifts. Being in touch with your organization and its needs is critical. Understanding the new options, how they compare with perpetual licensing, and what non-Microsoft alternatives might exist should all be on the table for consideration. Evaluate what makes the most sense, and then decide.