Windows 10 no 'loss leader' for Microsoft, but making money may rely on services

Details of the Windows 10 business model will be announced early in 2015

Microsoft won't talk about what Windows 10 will cost until next year. But it's looking unlikely that it will be completely free, either for users or for PC makers building larger devices, after Chief Operating Officer Kevin Turner said that Windows 10 won't be a priced to keep users in the Microsoft ecosystem.

"We haven't announced the Windows 10 pricing framework yet. But the one thing I can tell you that we've not had any conversations on is Windows 10 being a loss leader for us," he said at the Credit Suisse technology conference.

The way Microsoft makes money from PCs is changing. Windows hasn't been the biggest earner for Microsoft for some time: Turner said it was in third place behind the Office and enterprise businesses.

He also gave indications that Microsoft would look to extend the kind of deals it's done with makers of smaller devices who get Windows for free but are encouraged to bundle deals like Office 365 subscriptions that bring income for Microsoft. Notebook makers can already get a cheaper licence for Windows 8.1 if they make Bing the default search engine. But Turner seemed to suggest Microsoft would extend that even further.

"We've got to monetize it differently," he explained. "There are services involved. There are additional opportunities for us to bring additional services to the product in a creative way."

Unlike analysts, who have suggested that low-priced PCs may undermine the Windows 10 market, Turner was notably enthusiastic. "It's wonderful to see these 9-inch and below devices explode, because that was an area where candidly, I was blocked out and I had no share of what was being built. The $199 laptop, the HP Stream, is an amazing device."

Turner confirmed that Windows 10 will ship "by late summer and early fall" of 2015. And, he said, Microsoft will reveal what the Windows 10 business model will be "in the early part of 2015."

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Mary Branscombe

Mary Branscombe

IDG News Service
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