The ROI of free OS updates: Who wins, Apple or Microsoft?

Mavericks, Windows 8.1 hastened adoption, but what do the numbers really say?

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Analysts applauded the moves to free, saying it benefited both the OS vendors and their customers. Accelerating adoption reduces fragmentation, they said, letting developers focus their efforts on the newest edition, and no-cost updates bring personal computers in line with the expectations of consumers, who -- trained by the widespread practice in mobile -- think they're entitled to free OS upgrades.

A clear winner

But the comparisons fail when one examines the numbers: Mavericks came out the clear winner, converting almost twice as much more of its immediate ancestor's share than has Windows 8.1 so far.

On the surface, that seems odd, as both Mavericks and Windows 8.1 are not only free, but automatically offered to people running each OS's predecessor. Microsoft, for instance, nags Windows 8 users with an update notification even if they dismiss the alerts. Those reminders appear once a week for the first month after the initial notification, then twice each month until the customer cries uncle and updates to Windows 8.1.

One likely explanation for Windows 8.1's less impressive adoption is the same used to describe why it takes years for a new flavor of Windows to become dominant: Businesses are conservative.

While consumers generally do not hesitate to upgrade as long as their machine supports the new OS, businesses steer clear because they're wary of the hidden costs, like employee training, OS deployment and application compatibility testing.

Apple's Macs may be gaining ground in enterprises and retaining their traditional strength among creative professionals, but for the most part they're consumer-owned personal computers. Windows machines, on the other hand, are the bedrock of business.

That would explain the slower uptake of Windows 8.1: Businesses that have accepted Windows 8 -- a minority, most believe -- would treat Windows 8.1 with as much caution as any migration.

IE11 is a factor

To that risk aversion, add Windows 8.1's new browser -- Internet Explorer 11 (IE11) -- and the fact the OS update came just a year after Windows 8. Browsers are notorious pain points for corporations, which upgrade that mission-critical software only when forced, and the faster release tempo still has them stumped.

"The faster pace is absolutely the biggest pain point," said Gartner analyst Michael Silver in an interview last year. "The problem with faster release cycles is that [enterprises] don't know if their apps will work with each new version of Windows and IE."

So while the zero-dollar price of Windows 8.1 kicked the OS in the digital seat of its virtual pants, giving it the fastest-ever Windows uptake, there's little evidence to show that commercial will be as agile as consumer when it comes to updates and upgrades, free or not.

Net Applications' numbers also imply something else.

Even if Microsoft followed Apple's lead and made Windows always free, including the rumored Windows 9 of 2015, the move would be unlikely to pay off. First and foremost, Microsoft would be leaving an incredible amount of money on the table. Although it might swallow the relatively small losses from giving consumers free upgrades -- one-off upgrades bring little to the bottom line -- it could hardly afford to chuck the billions earned each quarter from the sale of Windows upgrade rights to enterprises via Software Assurance and other volume licensing agreements.

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