With Windows licensing revenue falling steadily (OEM licensing was down 22% this quarter while overall revenue in the segment fell by 4%), Microsoft is going to be under pressure to create new methods of extracting value from that market. The company has already said that Windows 10 will be free for its lifetime, and I’m not suggesting anything different, but going forward, I doubt MS simply gives up on Windows revenue. One potential replacement would be revenue from the Windows Store, but that’s dependent on the Windows Store actually offering software that anyone would want to buy.
Returning to the Windows 10 RTM issue, I’d be surprised if the industry stopped using the term. RTM is an understood point at which a product is shipped for installation on a system. Like “gone gold,” it captures a particular moment and is useful for denoting that yes, the OS has been deemed ready and shipped out. Just as motherboard companies still make reference to the BIOS as opposed to the UEFI, it’s not because the term remains accurate — it’s because the term is known and understood by the target audience.
One potential reason for why Microsoft wants to move away from single-number versioning is that it now updates applications separately from the core OS. You might download a new version of Mail or Photos, thereby changing your experience with the device, but still be on the same version number. In the past, Microsoft rarely did this — you had whichever features were installed on your Service Pack or original installation, and the company only occasionally released updates for application-level functionality.
As the Windows 10 ship draws close to port, we’ve seen confirmation from multiple sources that yes, Windows 10 Build 10240 is the RTM version that was sent out to OEMs for installation. The problem with this classification, however, is that Microsoft now refuses to use it. When Mark Hachman of PCWorld reached out to the company for confirmation, he was met with the following: “This build is the latest Windows 10 build, and we’ll continue to update Windows 10 code as we head toward launch and beyond,” a Microsoft spokeswoman said in a statement. “We are embracing a new way to deliver Windows.”
Far be it for me to contradict Microsoft, but that doesn’t seem to be what’s actually happening. Apple and Google both distribute OS updates over-the-air (well, carriers do). They still launch cohesive branded products around particular codenames. Microsoft is embracing the concept of Windows-as-a-service, but not because other companies that distribute similar products have done so. Instead, this push seems to be more about driving consumers to accept the idea of an ever-evolving, auto-updating software package.
Microsoft has no plans to charge for Windows 10 as a subscription service, but it’s hard to see the company not going down that path at some point. It continues to gain subscribers for its Office 365 system, despite the fact that Office 365 is a terrible value for any single user, costing you as much in one year as the Home version of office typically costs, period (and Office can easily be used on a 5-7 year cycle). The company wouldn’t even need to charge much — $5 per month would likely beat the revenue it got per-user over the long term, especially when combined with OEM sales for new notebook installations.
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