Recently, a thought came to my mind. I pondered if Microsoft will be likely to give away upgrade versions of Windows for free for Windows versions following Windows 8. Windows has been relatively much more expensive compared to other operating systems on the market. Even to upgrade from one version to the next, on would have to buy a boxed “upgrade” copy or download the installer from online for nearly a hundred dollars if not more. Competitors, like Linux were free while Mac OSX cost around 30 dollars to upgrade. However, Windows has been so well used and a stable operating system, people would put up with the high upgrade costs. Given that this has been like so for at least 20 years or so, does it make any sense to believe that Microsoft might start giving away upgrade versions of Windows 8’s successors? Though this would be completely unlike Microsoft’s Windows business strategies, it does make sense to give away Windows “9” and future upgrades for free, and here’s why.

Would you pay to upgrade to iOS6?

iOS is the name of the operating that powers Apple’s mobile devices like the iPhone, iPad, and the iPod touch. Apple has been iterating a new version of its iOS operating system every year, and all of Apple’s products that are capable of running the iOS operating system will get the upgrade to the new version for free. This is true with the Android devices, as well. Mobile devices running the Android operating system that is eligible for an upgrade to a newer version of the Android operating system will get it for free. Even Microsoft’s own smartphone operating system, Windows Phone OS, will upgrade to the newer version for free!

When it comes to mobile devices, we look at software much more differently than we do when it comes to desktop PCs. It seems laughable to think that we would have to go to the store to purchase a boxed copy of an upgrade to the operating system that is running on our smartphone or our iPad. In fact, most consumers have no clue what operating system is running on their smartphone or tablets, nor is there a need to. We tend to think of mobile devices very differently than we do with our desktop PCs. For devices like smartphones or tablets, we buy it with the notion of “what we see is what we get”. No one is thinking, when buying a smartphone, about what version of the operating system one can upgrade to in the future.  Instead, we buy these devices with the notion that when it is time for an upgrade, we will buy a new hardware (phone or a tablet) and get whatever OS or enhancements that come with the new OS.

It is important to note that like PCs, software updates do happen on our smartphone and tablets; however, unlike PCs, we, as users, don’t have to worry about them. If an update is available, it will happen automatically in the background or the device will prompt us for an upgrade. No one can imagine having to pay nearly a hundred dollars for a software update on their phones!

Windows 8 is a mobile OS

Windows 8 is unlike any other Windows operating systems released to the market. Windows 8 is designed to work exceptionally well with touch and is designed to run on tablets, like the iPad, as well as desktops with mouse and keyboard. Not only does Windows 8 have a new touch-first user interface, it has much improved battery life and sleep features. It is also designed to run on ARM processors, the same processors that power our smartphones and tablets. Given that Windows 8 devices will run on tablets that compete with the iPad, it makes more sense that Microsoft would adapt the strategy that better suits mobile devices. That is, users should no longer have to think about OS versions and upgrades for their mobile devices, let alone spend a bounty of cash for an OS upgrade. With that said, it makes more sense that Microsoft would automatically upgrade the operating systems to delegable mobile devices for free. That means, if I purchase a Windows 8 tablet, I might get Windows 9 on it for free when it becomes available, something that has been unimaginable for previous versions of Windows.

In fact, on the “Building Windows 8” blog, Seven Sinofsky, the president of the Windows division at Microsoft, talks a bit about how Windows 8 on ARM devices is different than conventional Windows PCs in terms of updates and services.

The [ARM device] will come with the OS preinstalled, and all drivers and supporting software. WOA will not be available as a software-only distribution, so you never have to worry about which DVD to install and if it will work on a particular PC.

WOA PCs will be serviced only through Windows or Microsoft Update, and consumer apps will only come from the Windows Store, so you never have to worry if a program will run because you are not downloading or installing from a DVD outside of the store experience. A WOA PC will feel like a consumer electronics device in terms of how it is used and managed.

Mr. Sinofsky is making it clear that the end users will not have to worry about software updates, drivers, and installing software from DVDs. This means, users won’t have to go to the store or a website to download, say, Windows 9, in the future. Microsoft will take care of this for the user. Now, I will take note of the possibility that Microsoft may still charge the user some money for the ARM device to automatically upgrade to Windows 9, or another future version, but it would be unlike the strategies taken by the competitors who are providing free software upgrades.

A new revenue model

Changes in business strategies have significant impact on a company’s revenues, for better or for worse. Clearly, giving away for free something for which it was once charged will likely reduce money flow. However, it is important to understand that Windows 8 brings about a brand new revenue model that might prove much more efficient. Windows 8 includes an “App Store”, also known as “Windows Store”. The store will be the one-stop lace to find apps for the Windows PC from a diverse spectrum of categories. Developers of Paid apps will share either 20 or 30 percent of revenue with Microsoft, depending on the popularity of the app. With thousands of potential apps on the Windows Store, Microsoft has a great opportunity to make a very good profit.

According to what Microsoft stated on its Building Windows 8 blog, relatively few people actually upgrade their current PC by purchasing a new copy of Windows. Rather, most consumers get a new version of Windows that come preinstalled with a new PC. This aligns with the fact that Microsoft makes the most revenue from Windows that come preinstalled with the PC, according to an article on The Seattle Times. “Microsoft gets far more revenue from manufacturers who make PCs that come preloaded with Windows”.

So if the Windows store is a huge success, which isn’t hard to believe, its revenue should make up for and exceed the revenue earned by upgrade versions of Windows.

Microsoft has already done this

Giving away free Windows upgrades won’t make it the first time Microsoft has done something like this. Currently, Microsoft office is produces the greatest profits for Microsoft, according to Paul Thurrott on the “Windows Weekly” podcast. Office and Windows has been Microsoft’s biggest money maker since its earliest days; yet, Microsoft has started to, for the first time, give Microsoft Office away for free in certain scenarios. Microsoft office is now available for free to use on the web. This version is known as “Microsoft Office Web Apps”. It includes web versions of Word, Excel, PowerPoint, and OneNote. Microsoft also gives away its starter edition of Microsoft Office preinstalled with PCs. This edition includes light version of Word and Excel. No one would have imagined a few years ago that Microsoft would be giving away Office, and, yet, it is happening!

Will Windows Upgrades be Free?

None of us knows for sure, but this something that is is no longer very hard to imagine. Microsoft might very well change its business strategies in order to adapt to the new way we view technology, and, hopefully, it will be for the better.