Microsoft’s ARM-based platforms – Windows Phone and RT – have not exactly been the company’s most resounding successes. Now the Redmond-based giant is considering making the Operating Systems free for manufacturers; scrapping the license free currently associated.
The plan to make them free is currently under “serious consideration” by OS chief Terry Myerson and may help to counter the rising threat of Google’s Chromebook and Android.
Recent revelations show Microsoft is already preparing for their next round of major updates, named ‘Threshold’ which is set to further tie the various platforms – Windows 8, RT, and WP8 – closer together, or reducing the amount of… speculated after Larson-Green’s comments saying that the company is “not going to have three.”
Currently Microsoft makes the majority of its Windows revenue from licensing the software to OEMs who build systems based on Windows. With significantly declining PC sales, Microsoft has moved into the tablet market – even releasing their own hardware, the Surface.
Microsoft also makes money from Windows Phone licenses; but Nokia – who holds over 80 percent of the market – was recently acquired by Microsoft… removing the largest source of license revenue.
In fact, it’s even rumoured Microsoft is planning to “bribe” the largest Android-manufacturer, Samsung, with $1 Billion to continue making Windows Phones.
Android is a much more tempting proposition for manufacturers, it’s free, and it holds the biggest market share of any OS. Nokia would argue too big, and dominated by Samsung, which is why the Finnish-company decided to stick with Windows Phone.
If Microsoft does scrap the license fees associated with Windows; it will undoubtedly be offset by a major push in the selling of services and built-in Bing search results. It’s also expected customers will be pushed towards subscriptions such as; SkyDrive, Office, and Skype.
This would bring Microsoft into Google’s model of licensing for free, and making money on the company’s services. Once the ecosystem is stronger, Microsoft may decide to take Apple’s model of making money on hardware – such as the Surface. But arguably, software and Cloud services will be the most lucrative over the next decade.
However, Microsoft CEO Steve Ballmer has previously admitted that consumer services “are tough,” and any prospect for generating revenue is fraught with competition.
“Other than phone companies, there really aren’t many technology and large subscription consumer services, and outside of Google and maybe Facebook it is hard to find a business that is significant that is ad-funded,” said Ballmer.
But with Ballmer out of the picture at Microsoft, and a new CEO incoming, who knows?
Do you think Microsoft should go free with Windows licenses to OEMs?
