Last Thursday, Microsoft's Chief Operating Officer Kevin Turner spoke at a Credit Suisse technology investment conference held in Tucson, Arizona, and signaled a change in strategy for monetizing Windows. Turner, while acknowledging that for 39 years Microsoft had "one of the greatest business models of all time", things have changed:
This was our past. If you look at our future, it’s really about becoming a Cloud OS, a devices operating system, having first party hardware to light up those experiences, and really being the company that can uniquely provide for dual-users this idea of digital work and digital life experiences.
Microsoft has been aggressive in pricing in a number of areas recently, staying competitive with its Azure offerings, dropping the price on Xbox One, and most recently really hitting the holiday shopping market hard with promotions like the "12 days of deals", some great deals on Black Friday, and some, well, really cheap Windows Phones. Now it looks like Windows 10 might be in for some of that aggressive marketing too, although Turner doesn't expect Microsoft to begin thinking of Windows 10 as a loss leader.
Turner took time to answer some questions, and spoke about monetizing Windows and "monetizing the lifetime of the customer":
The thing about it is, though, we’ve got to monetize it differently. And there are services involved. There are additional opportunities for us to bring additional services to the product and do it in a creative way. And through the course of the summer and spring we’ll be announcing what that business model looks like. At the same time it’s wonderful to see these nine-inch and below devices explode, because that was an area, candidly, I was blocked out and I had no share of what was getting built. So it’s a very fascinating transition for us.
And finding new ways to monetize the lifetime of that customer on those devices, again, I would tell you we’re learning, we’re growing, and we’re smarter and wiser every day. And we still have some more learning and growing to do in that space. But, stay tuned. The business model stuff will be out in the early - probably the early part of 2015.
Microsoft is widely expected to open up conversation about Windows 10 and the Microsoft's future with a press event to be held in late January, and then more at Build and the Tech-Ed successor now called "Ignite" in Chicago in June. We'll be bringing you the latest from all of those events and more, as Microsoft unveils its plans for Windows 10 and beyond.