Microsoft focuses on Windows as a service

For the past couple of years, Microsoft has shifted its focus from product licensing to a software as a service licensing model. Microsoft has already migrated its products to cloud services including Office 365, Power BI, SharePoint, SQL Server and Azure. Azure is becoming the center of its as-a-service model.
 
Now, Microsoft’s next focus is its popular operating system, Windows. Windows 10 is the next version of its operating system and the successor to Windows 8.1. Windows 10 will be released to public on July 29 and with this release, Microsoft is expected to give it away free to a ton of people. Windows 10 will have six editions that will target a variety of customers and devices.
 
In a PowerPoint presentation to its investors, Microsoft presented its strategy on how it will make more revenue using its Windows 10 ecosystem. Microsoft plans to have over 1.5 billion customers using Windows 10.
 
“Microsoft designed Windows 10 to create a new generation of Windows for the 1.5 billion people using Windows today in 190 countries around the world.”
 
Windows 10 will run on all Microsoft devices.
 
“Windows 10 will run on our broadest device family ever, including Windows PCs, Windows tablets, Windows phones, Windows for the Internet of Things, Microsoft Surface Hub, Xbox One and Microsoft HoloLens – all working together to empower our customers to do great things.”
 
Microsoft focuses on Windows as a Service, rather than a product.
 
“With the launch of Windows 10, Microsoft will provide new features and functionality over time. We will continue to keep it current for the supported lifetime of the device. We think of Windows as a Service – continuous updates over time with a new innovation to help our customers be more productive and have more fun.
 
We will have a new revenue recognition model because Windows 10 will include software upgrades provided over time, rather than at a specifically priced software upgrade events, which will result in the deferral of revenue.”
 
Microsoft expects revenue not to be affected under its new Windows as a Service model.
 
The presentation includes the following revenue generation model.
 
Windows 10 OEM 
 
You can clearly see that with the new Windows as a service model, Microsoft will not be losing any revenue.