Microsoft may pitch Windows 10 subscriptions at consumers

The move would echo the Microsoft 365 plans now aimed at enterprise users and would further the company's effort to push subscriptions.

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Martyn Williams/IDG

Microsoft may unveil Windows 10-Office 365 subscriptions for consumers that resemble the Microsoft 365 plans now pitched at enterprises.

Hints of a product tagged "Microsoft 365 Consumer" surfaced in a pair of help-wanted advertisements on the Redmond, Wash. company's job board. One ad, which sought a senior product manager, was posted Oct. 18; the other, for a product manager, appeared Dec. 12. Both positions are marketing spots.

"Do you want to work with engineering and outbound marketing to help us identify, build, position, and market a great new Microsoft 365 Consumer Subscription?" one of the listings asked. "The Subscription Product Marketing team is a new team being created to build and scale the Microsoft 365 Consumer Subscription."

ZDNet first reported on Microsoft's job openings and the references of Microsoft 365 Consumer on Wednesday.

Neither job posting provided any detail on the subscription, the contents of which may not even be set at this point. Under the job listings, for instance, "Responsibilities" contained items such as "Partner with the business planning team in developing the business plan and monetization models for the subscription" and "Shape the definition of the target audience and corresponding value prop[osition] for the Microsoft 365 Consumer subscription."

That makes it sound like Microsoft 365 Consumer (M365-C) is in the earliest stages, and that if a product named that does appear, it won't be for some time.

What might be in Microsoft 365 Consumer?

Core to Microsoft 365 (M365) - the subscription the company is now aggressively pushing at enterprises - are corporate versions of Office 365 and Windows 10 Enterprise, backstopped by a management and security toolset called "Enterprise Mobility + Security."

M365-C would resemble the enterprise edition, but clearly not be built around what corporations use. Microsoft must walk a line: Offer a bundle with enough value to appeal to so-called "professional consumers" - the audience it's targeted with its productivity pitch dubbed "Modern Life Services" - yet not give businesses, even the smallest, the idea that it will work for them. The Redmond, Wash. firm wants all businesses to adopt pricier subscriptions, like M365.

By default, a consumer-grade subscription would be based on Office 365 and Windows 10. Other components would be less obvious but might include Skype and Cortana in some fashion. Both were mentioned in Microsoft's job listings. Another possibility: A more advanced security solution or platform than the standard Windows Defender, which is baked into all versions of Windows 10.

What's the biggest problem Microsoft might have with 365 Consumer?

The biggest barrier to a successful M365-C will be Windows 10 - specifically, what OS value consumers will get out of a subscription. (Consumers, or at least the 31-some million who Microsoft claimed in October subscribed to Office 365, presumably realize the value of Office.)

Windows 10 Enterprise - a cornerstone of M365 - is a SKU (stock-keeping unit) that's unavailable to OEMs (original equipment manufacturers), and so must be licensed separately. In plain English, companies must license Windows 10 Enterprise via a subscription or with an agreement that also includes Software Assurance, an annuity-like program which, for an additional fee, provides upgrade rights for the next several years.

Once committed to Windows 10 Enterprise - and after re-imaging new PCs, which probably came with Windows 10 Pro pre-installed - corporations must continue to license the OS. Increasingly, that's via a subscription, such as M365 or the ala carte Windows 10 Enterprise E3. (Software Assurance is nearly the same concept as a subscription, so Windows 10 licensing is largely becoming a semantical game.)

This is one of the reasons businesses are Microsoft's most important customers: They not only foot the bill for the Windows license pre-installed on the PC but with Enterprise, pay a second time for the more-capable OS.

Consumers, even the more-interested-in-productivity professional consumers Microsoft has its sights set on, don't need another Windows license. They have the one that came on their device. Yet Microsoft must find something that consumers will want out of Windows 10 if M365-C is to have any chance.

Without that something, Microsoft might just as well stick to selling Office 365 Personal and Office 365 Home, the two Office sub plans for consumers. Sans something extra, M365-C would be dead on arrival.

What could Microsoft do to Windows 10 to make M365-C attractive?

It's possible that Microsoft will take a very measured approach with M365-C and simply include a license for Windows 10 Pro - the OEM-installable SKU that's more feature-rich than the standard Windows 10 Home - with the subscription. The rationale for subbing to M365-C, then, would rest on Windows 10 Pro's qualities. To boost Pro's perceived value as part of M365-C, Microsoft could, say, discontinue sold-at-retail copies of Windows 10 Pro and the for-purchase licensing keys that transform Home into Pro. The only way to migrate from Home to Pro, without buying a new system, would be through M365-C.

Microsoft could take this further by eliminating all access to Windows 10 Pro outside a M365-C subscription. That would mean eliminating retail access to a Pro license and halting the delivery of Pro licenses to OEMs. Computer makers would factory-install Windows 10 Home (or maybe a yet-unannounced SKU) on all machines. Customers wanting Pro would have to sign up for a M365-C sub.

(This might not be as dramatic a step as it seems at first glance: Windows 10 Pro is a business dead end, Gartner Research has said.)

Because Windows 10 Pro lets users defer feature upgrades up to a year after their introduction - and because the inability to do the same has been a big complaint about Windows 10 Home - the use of Pro in M365-C could be a big selling point.

But a more dramatic change may be in the M365-C cards.

Microsoft could create a new Windows SKU solely for the subscription, one based on, for example, Windows 10 Home. But unlike Home or even Pro, the new Windows 10 could boast some features now restricted to Windows 10 Enterprise.

Among the Windows 10 Enterprise-esque features Microsoft might add to the Windows within M365-C: An ability to dial back the amount of telemetry the PC sends to Microsoft and the 30-month support lifecycle given to each fall's feature upgrade. Users of Windows 10 Home (as well as Windows 10 Pro) have griped that they feel like second-class citizens because they can't stop Microsoft from harvesting data from their devices and must accept feature upgrades every six months. (Windows 10 Home and Windows 10 Pro feature upgrades are supported for a maximum of 18 months.)

Copyright © 2018 IDG Communications, Inc.

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