Analyst Says Windows 8 should be free to existing Windows users

[Athernar]

Um no they didn't, did the app store on Win 8 suddenly start raking in huge revenues that could even get close to offsetting losses from OS license fees without telling me?

Last time I checked, everyone was panning the Win 8 store.

 

So give away Windows 8 to entice users to transition to it, and grow the market - just like you said with WP8. Bam, devices and services model.

 

What was your point again?

[Gotenks98]

How do you emulate something that you were the first to do? MS made 8.1 free to smooth things over with those who hated 8. Apple just copied MS to make OSX free. Had this not happened OSX would have been like $20 just like the last one or slightly lower. Besides Apple can do this because you pay thru the nose when you buy the overpriced hardware. This is 2 completely different business models.

[yardmanflex]

I still won't upgrade even if it is free.

Your lost..

[MorganX]

Considering all the complaining going on, Windows 8 is too radical to be a mere service pack, and shouldn't be treated free like one either.

 

This same argument could justify it being free. Considering how radical it is, probably in need of a service pack, rough around the edges, it should be free.

 

I believe people should be paid for their work, but I also believe Windows is over-priced. In it's current state with the shoddy core apps, 49.99 for Pro, 59.99 for Pro w/Media Center (media center needs a major update for 8.1 though, it crashes on me, whenever the IE low-mic process is running which is needed for protected mode, and under certain other conditions. In 7 it's rock solid).

 

New PCs with Windows 8 may not be selling (at an increase year over year) but Microcenter is jam packed with folks buying cases, mobos, components. it's crazy. MS was so wrong to buy into the desktop is dead and I think they're realizing that with the changes and announced changes.

 

Anyway, free, no. They deserve more than that, but <$75, yes.

 

Windows licensing and Office is such a disproportionate amount of Microsoft's true profits, shareholders would NEVER, EVER, allow that.

[MDboyz]

Why don't you be a great person, and give it to someone that needs it? ...

 

Not sure it would make a difference.  I got 8 for free.. I don't use it.

[MorganX]

I don't think you read my reply completely.

When I mentioned the app revenue and such, I was talking about the WP market, aka smartphones. You brought up the Nokia buy, so I made a point about that market, how its different from the desktop pc market.

That statement did not apply to Win 8 on the pc because there is no such market for MS to lean on.

I'll rephrase it for you:

MS cannot offer Win 8 for free because they do not have any way of off setting the losses that that would entail. That's all, nice and simple.

Anyone that thinks MS should do this then also needs to find a way for MS to cover up the billions in losses they would take.

 

Agreed. It wouldn't be an operating loss (not counting the unprofitable divisions Windows and Office give shelter to), but it would be a loss of profit which is all you have to lose to cease to function as a profitable business.

[trooper11]

So give away Windows 8 to entice users to transition to it, and grow the market - just like you said with WP8. Bam, devices and services model.

 

What was your point again?

You do realize that their WP market is a tad smaller than the desktop right?

One of the little secrets is that MS has much less to lose on the smartphone market then they do on the desktop market. Combine that fact with the fact that there is an established app market with a growing user base and it seems a lot easier to say offer the wp OS free to oems.

On the desktop, the Win 8 app market is growing, but in order for it to cover loses from windows licenses, it would have to be much, much larger first.

Plus, another reason it works for WP is that MS knows that if your using a smartphone, your only getting apps through their marketplace. On Win 8, there is no such guarantee. Win 8 has a traditional desktop that allows you to install programs as you like, from all sorts of sources. The app store there is merely another option in the sea of options. So you combine that with the fact that Win 8 apps are not in good enough supply, or variety compared to desktop programs and your left with a tough situation. Even if you entice more users to upgrade as you suggest, that doesn't mean there will be this huge growth in app purchases through the windows store. Win 8 does not lock anyone to buying apps from one source.

Unless you guys actually want MS to ditch the desktop, I have a hard time seeing it ever being financially possible for MS to give away its desktop os to everyone. On platforms where the windows store is the only place to get apps, sure, I could see that, but not on the desktop where MS does not lock down the system like that. If MS wants to emulate Google and offering a desktop OS for free, then they have to come up with a new revenue stream in its place.

[trooper11]

Agreed. It wouldn't be an operating loss (not counting the unprofitable divisions Windows and Office give shelter to), but it would be a loss of profit which is all you have to lose to cease to function as a profitable business.

Exactly, I really didn't think that was a controversial idea.

If you know how these companies work, then you find out why they do what they do. Its a little frustrating when it seems like no one wants to look beyond the headline.

Debate how much the OS should cost, fine, that's more than reasonable. Personally, Windows being sold at $99 seems fair to me. I've bought Windows in the past at that price and have felt fine. $199 and $299 are too high in my opinion. I think they should drop the retail versions of the os anyway. Just offer an oem version to everyone. They can call it something else if they want, but just sell that version at say $99.

[f0rk_b0mb]

I'm not quite sure how MS can survive as a software company if they give it all away for free.

Apple can do it because they make their money off of hardware.

Google can do it because they make their money off advertising.

MS makes its money off software, so it can't really give it away.

So if MS did this, it would be basically bankrupting itself. Unless of course this analyst and anyone else wanting MS to do this thinks that MS should take the Google route and start relying more on advertising revenue, maybe make Win 8 ad supported.

Besides, people are saying in this thread that they wouldn't even take it if it was free, so what exactly would the point be besides harming MS further?

I will say this though, I know a lot of people that bought Win 8 when it was offered for $20 as part of the introductory offer, so its certainly true that cheaper prices can mean more sales. On the other hand, there are only so many users that buy an OS separately for their pc. Most pc users just get their OS with the pc they buy.

 

Microsoft is making money off developers windows store apps (they get a certain %) and a few ads in the OS. Once the Windows Store gains traction, I'm sure they'll cut the price quite a bit. 

[trooper11]

Microsoft is making money off developers windows store apps (they get a certain %) and a few ads in the OS. Once the Windows Store gains traction, I'm sure they'll cut the price quite a bit.

Hey, I don't disagree there.

The point is the here and now. If they can grow the app market, then maybe they reach a point where it makes financial sense.

Right now and for the foreseeable future, they make far more money off of windows desktop license sales then they do from the windows store.

[Eric Veteran]

Please remind the DOJ that Microsoft can now build a complete machine and put whatever it wants on it.  :) Lawsuits would be slapped on MS so fast it would make your head spin.

They could always do that, they just never have. The antitrust issue came from them telling other OEMs what they could install.

[+LogicalApex MVC]

I'm not quite sure how MS can survive as a software company if they give it all away for free.

Apple can do it because they make their money off of hardware.

Google can do it because they make their money off advertising.

MS makes its money off software, so it can't really give it away.

So if MS did this, it would be basically bankrupting itself. Unless of course this analyst and anyone else wanting MS to do this thinks that MS should take the Google route and start relying more on advertising revenue, maybe make Win 8 ad supported.

Besides, people are saying in this thread that they wouldn't even take it if it was free, so what exactly would the point be besides harming MS further?

I will say this though, I know a lot of people that bought Win 8 when it was offered for $20 as part of the introductory offer, so its certainly true that cheaper prices can mean more sales. On the other hand, there are only so many users that buy an OS separately for their pc. Most pc users just get their OS with the pc they buy.

Not entirely true... With Windows 8 Microsoft now makes money off Windows in at least three categories, license fees, advertising, and app store sales.

 

The biggest problem for Microsoft in growing revenue in every one of those categories, outside of license sales, has been the meager adoption of Windows 8 and its app store. If adoption rises Microsoft could possibly raise advertising revenue. I am not convinced the store revenue needle will move much on the desktop as it already has failed to gain serious traction from Windows Desktop users.

 

It seems a major problem for Microsoft is the Enterprise. They won't be able to monetize there easily without license fees, but the license fees being lower would possibly help them in the consumer market. The easiest solution, which I think MS may be doing, is to revert back to the Windows 98 era of Windows consumer and Windows enterprise being totally separate products. They can do this while maintaining the single code base model that the NT era ushered in; they already do this with Windows Server.

 

This same argument could justify it being free. Considering how radical it is, probably in need of a service pack, rough around the edges, it should be free.

 

I believe people should be paid for their work, but I also believe Windows is over-priced. In it's current state with the shoddy core apps, 49.99 for Pro, 59.99 for Pro w/Media Center (media center needs a major update for 8.1 though, it crashes on me, whenever the IE low-mic process is running which is needed for protected mode, and under certain other conditions. In 7 it's rock solid).

 

New PCs with Windows 8 may not be selling (at an increase year over year) but Microcenter is jam packed with folks buying cases, mobos, components. it's crazy. MS was so wrong to buy into the desktop is dead and I think they're realizing that with the changes and announced changes.

 

Anyway, free, no. They deserve more than that, but <$75, yes.

 

Windows licensing and Office is such a disproportionate amount of Microsoft's true profits, shareholders would NEVER, EVER, allow that.

It is absurd that Windows hasn't gone down in price; at least for consumers. Microsoft has thrown new revenue streams in Windows 8 via advertising and the app store. They were too arrogant pricing wise to be certain they didn't have to drop the license fees to compensate for those additional revenue sources. I think they are learning some of that now.

 

They attempted to use the Desktop to shoehorn themselves into the tablet market without using the biggest weapon they added to their arsenal; price. Very bad choice. The damage to Windows 8 is already done.

 

But as I suggested above, they should split the next version out (consumer - enterprise) and use price more aggressively.

[Tech Geek Alex]

I really am not trying to start something with the following question.....

 

For all those who just posted "I wouldn't use Windows 8 even if it was free......" , can you please explain (like a reasonable adult) why you don't like W8? Or What you found wrong with it? I honestly want to know. I keep hearing "The Start Menu, The Start Menu".... but that cant be it because 99% of the people who visit Neowin have some level of geekness in them and which means they should be able to pick and install one of dozens of cheap or free start menu add on's that will give you the "correct" start menu (that looks like Win 7 or earlier). I also heard the "well I don't want to use snap or the app store or the start screen"......but that cant be it, because if you add a start menu that you can add in less than 60 seconds for free, you can boot to the desktop and never have to use snap or the app store or any of the new touchscreen functions.  For most on the cutting edge types, like I know most of you are, cant be the price of Windows 8 because how long was it $40 (I know its back to full price now), and if you have Windows 8, Windows 8.1 is FREE.

 

So honestly I do want to know what is it about Windows 8. 

 

(Disclosure: I have and run Windows 8 on my computers and enjoy the faster boot times, less resources required to run Windows, have a Start Menu which I installed from Ninite.com installed, boot to the desktop, and use the app store rarely even though I have download a few free games and xbox music app. I also use an Android phone so no I'm not stuck into the Windows Eco-system)

 

[JJ_]

I still won't upgrade even if it is free.

 

This

[trooper11]

But as I suggested above, they should split the next version out (consumer - enterprise) and use price more aggressively.

Well it seems like MS may already be thinking as you are.

With the current goal of unifying under one core and then the rumors of Windows RT and WP merging, it seems like you could get your split, just not as clear cut as you may be saying here.

I see MS trying to make that merged OS that comes from WP and Windows RT into the 'consumer' OS that targets anything that is not a traditional pc, meaning phones and tablets. The 'enterprise' version will simply be the desktop side of Windows 8. I could see the Metro ui still being included in this version, but not in the way it is now, instead making it much more modular, aka it can be avoided if the user chooses. It will also not be the default view of the system, instead it will be there for those that want to enable it. Make it more like Media Center was.

Maybe we go back simply calling it Windows and Windows Pro, but now there are clear differences between the two versions.

[firey]

Why don't you be a great person, and give it to someone that needs it? ...

I got it through works MS Partner program.

[MorganX]

It seems a major problem for Microsoft is the Enterprise.

 

If you have an Enteprise Agreement, Office licensing makes Windows desktop licensing seem like it's virtually free. Servers as well. In the enterprise, it's all about Office. If you don't EA Office, I'm not even sure you can get an EA anymore.

[Athernar]

You do realize that their WP market is a tad smaller than the desktop right?

One of the little secrets is that MS has much less to lose on the smartphone market then they do on the desktop market. Combine that fact with the fact that there is an established app market with a growing user base and it seems a lot easier to say offer the wp OS free to oems.

On the desktop, the Win 8 app market is growing, but in order for it to cover loses from windows licenses, it would have to be much, much larger first.

Plus, another reason it works for WP is that MS knows that if your using a smartphone, your only getting apps through their marketplace. On Win 8, there is no such guarantee. Win 8 has a traditional desktop that allows you to install programs as you like, from all sorts of sources. The app store there is merely another option in the sea of options. So you combine that with the fact that Win 8 apps are not in good enough supply, or variety compared to desktop programs and your left with a tough situation. Even if you entice more users to upgrade as you suggest, that doesn't mean there will be this huge growth in app purchases through the windows store. Win 8 does not lock anyone to buying apps from one source.

Unless you guys actually want MS to ditch the desktop, I have a hard time seeing it ever being financially possible for MS to give away its desktop os to everyone. On platforms where the windows store is the only place to get apps, sure, I could see that, but not on the desktop where MS does not lock down the system like that. If MS wants to emulate Google and offering a desktop OS for free, then they have to come up with a new revenue stream in its place.

 

That's great! Even more potential store customers to offset the loss of licensing, all they need to do is increase 8.x's market share.

 

I wonder how they could do that.

[+LogicalApex MVC]

I really am not trying to start something with the following question.....

 

For all those who just posted "I wouldn't use Windows 8 even if it was free......" , can you please explain (like a reasonable adult) why you don't like W8? Or What you found wrong with it? I honestly want to know. I keep hearing "The Start Menu, The Start Menu".... but that cant be it because 99% of the people who visit Neowin have some level of geekness in them and which means they should be able to pick and install one of dozens of cheap or free start menu add on's that will give you the "correct" start menu (that looks like Win 7 or earlier). I also heard the "well I don't want to use snap or the app store or the start screen"......but that cant be it, because if you add a start menu that you can add in less than 60 seconds for free, you can boot to the desktop and never have to use snap or the app store or any of the new touchscreen functions.  So honestly I do want to know what is it about Windows 8. 

 

(Disclosure: I have and run Windows 8 on my computers and enjoy the faster boot times, less resources required to run Windows, have a Start Menu which I installed from Ninite.com installed, boot to the desktop, and use the app store rarely even though I have download a few free games and xbox music app. I also use an Android phone so no I'm not stuck into the Windows Eco-system)

 

I am one such user. I have access to Windows 8 via a number of avenues and I refuse to use it...

 

1. My Laptop shipped with Windows 8 (removed it for Windows 7)

2. via MSDN I have access to Windows 8 for any of my machines (since I use them for software development I can legally upgrade them all).

 

I don't like Windows 8 for a number of reasons. Since we've been down this road so many times I won't reiterate them (as this can spiral out of control). The basic reason for me, and this varies for all of us, is that Windows 8 doesn't bring enough value to the table for me to consider using it as my day to day OS.

[MorganX]

I still won't upgrade even if it is free.

 

I wouldn't for the retail price but if you had a chance for the $14.99 or the other steep discounts it was a no-brainer. If you use Windows 7, you can bypass all the Modern stuff and get a better Windows 7 minus the Start Menu.

 

The major issues are Modern applets and IE11 (I find it troublesome and many compatibility issues and freezes a lot.) Both of those you can bypass.

[+LogicalApex MVC]

If you have an Enteprise Agreement, Office licensing makes Windows desktop licensing seem like it's virtually free. Servers as well. In the enterprise, it's all about Office. If you don't EA Office, I'm not even sure you can get an EA anymore.

True, but the savings to push Software Assurance onto the Enterprise is the cost of licensing both of these products. Right now they are both under severe price pressure for Microsoft (Windows far more so than Office).

 

Microsoft needs to keep the sticker price for Windows high to make Software Assurance seem like a great deal to the Enterprise. Especially since these agreements generally don't allow the organization to keep using the products when the agreement expires. A free Windows may push many enterprises back to licensing Office directly.

[trooper11]

That's great! Even more potential store customers to offset the loss of licensing, all they need to do is increase 8.x's market share.

 

I wonder how they could do that.

You didn't read my reply at all.

That's fine, I wont bother you with anything more on it.

 

 

I wouldn't for the retail price but if you had a chance for the $14.99 or the other steep discounts it was a no-brainer. If you use Windows 7, you can bypass all the Modern stuff and get a better Windows 7 minus the Start Menu.

 

The major issues are Modern applets and IE11 (I find it troublesome and many compatibility issues and freezes a lot.) Both of those you can bypass.

No, they still wouldn't want it. You can try to make sound as great as you want, but ultimately, some people will always refuse it.

Once MS release a new version of Windows 7, then those people might consider using it.

[Athernar]

You didn't read my reply at all.

That's fine, I wont bother you with anything more on it.

 

Because your reasoning is held up by nothing more by flimsy conditionals and assumptions.

 

WP8 being store-only is irrelevant if people don't spend money on said store, so it really is no different to Windows 8's store in that regard. And please, Metro apps are an entirely different use case to desktop apps, so citing the ability to use the latter is meaningless.

[+LogicalApex MVC]

No, they still wouldn't want it. You can try to make sound as great as you want, but ultimately, some people will always refuse it.

Once MS release a new version of Windows 7, then those people might consider using it.

It may happen with Windows 8.2 or 9 or whatever they call the future version...

 

The problem with Windows 8 isn't so much what they added in and of itself. The major problem is that they didn't add enough for the core market that uses the product. Microsoft was strongly convinced that Windows users would upgrade to anything they release (which makes some sense for them to feel this way*) and that they could get away with using the Desktop as a shoehorn; after all this worked fantastically in the 90s. They just learned the lesson that I proclaimed when Windows 8 first showed up, that the market is now very different than the 90s, and they are now forced to come up with actual competitive strategies.

 

If Microsoft added enough real value for Desktop users we would be upgrading in droves, even with the shortcomings and the Start Screen and all that jazz. A great example is Windows XP. I remember how hated that OS was in the early days. The consumer crowd hated it because it didn't work with loads of apps (since this was the first consumer NT release DOS was officially out the door) and the techie crowd hated it because it wasn't really better than Windows 2K and the UI was "fisher price". Microsoft had a hard time pushing it until SP1 where they fixed a lot of compatibility issues and added a ton of security features that added real value for the techies.

 

I think Microsoft learned their lesson and some not to distant version of Windows will actually be competitive. They just have to hope that they aren't going to get that right version out too late...

 

* It makes sense because the vast majority of Windows users, at least on the consumer side, upgrade by purchasing a new computer. Microsoft made the delusional mistake of assuming that those consumers would just buy into Windows 8 because it was what they OEM installed on their machine at the factory.

[trooper11]

Because your reasoning is held up by nothing more by flimsy conditionals and assumptions.

 

WP8 being store-only is irrelevant if people don't spend money on said store, so it really is no different to Windows 8's store in that regard. And please, Metro apps are an entirely different use case to desktop apps, so citing the ability to use the latter is meaningless.

I'll say it one more time:

MS has no revenue to take the place of windows desktop license fees.

If and when that changes, they could certainly get away with giving away those licenses. Giving them away right now and for the future would not be so smart for them.