Can subscription pricing bring Windows back to life?

Microsoft has just registered the "Windows 365" trademark, which has attracted attention from the outside world. Since Microsoft's current Office subscription service is named "Office 365", the media speculates that Microsoft may also add a subscription payment method based on the length of time in future Windows products. The pricing policy of Windows that has continued for decades may usher in a major change.

In fact, considering the overall industry background, Microsoft's move is not too surprising. The traditional business model of the software industry, which is to license a single version permanently and make money by upgrading versions, has been criticized for several years. Both individual and industry users hope that software companies can launch a more reasonable and flexible charging system. Among them, the on-demand subscription payment model has been highly sought after, but it has not been widely popularized in the industry.

The reason is that the traditional charging model is more beneficial to software developers, especially those who occupy a monopoly position. Considering the service life of each version of the software, the average cost of using a perpetual license is usually higher than the cost of a subscription service, which provides a higher profit margin for software companies. Subscription services also often require the addition of some value-added applications to the software itself, and the software is updated more frequently, which undoubtedly increases the burden on software developers. Therefore, large monopoly software companies represented by Microsoft have been reluctant to abandon the traditional charging model and switch to the new system.

But the tide has turned, and the giant that once dominated the world and could maintain its monopoly without much effort (Microsoft once disbanded its browser development team after IE controlled the Internet entrance) has finally faced the reality that it is no longer the king. Bing has never been able to compete with Google in the search engine market, and Windows Phone missed the opportunity to develop after the rise of smartphones and was completely defeated by Android and iOS; at the same time, the traditional PC industry has been declining, dragging down the growth of Microsoft's two cash cow businesses - Windows and Office.

Ironically, Microsoft's past glory on the PC platform has become its enemy today: a large number of users stick to the "still very useful" old versions of Windows and Office platforms, refusing to migrate to the "revolutionary" but "incomprehensible" latest versions of the system. What's more troublesome is that after users get used to the free system upgrades of smartphones and tablets, they increasingly find the numbers on the price tags of Microsoft products glaring. "Why do we have to charge for PC system upgrades?" is the voice of most people.

When the era of making money easily through monopoly passed, even a strong company like Microsoft bowed its head to the market. After launching the Office 365 subscription service, Microsoft announced policies that consumers like, such as no system licensing fees for small-sized tablets and mobile phones and free upgrades for Windows 10 within one year after its release. The registration of the Windows 365 trademark is also likely to be a preparation for Windows to switch to a subscription service model in the future. Starting from Windows 8.1, Microsoft's operating system updates follow the Android and iOS model, and no longer require reinstalling the system.

If the previous charging method of purchasing serial numbers for upgrades is still maintained, users will inevitably be very resistant. After switching to subscription services, users only need to pay regularly to enjoy continuous use authorization and keep the system up to date, without having to worry about system upgrades and installations. In addition, users' requirements for multi-platform collaboration on PCs, tablets, and mobile phones are constantly increasing, and subscription services can provide larger online storage space to facilitate file interaction between different devices, or allow team members to quickly share work results and synchronize task progress.

Before Microsoft, another monopolistic software giant, Adobe, had already made a comprehensive transformation, converting its creative suite into a pure subscription service. This transformation was quite successful, bringing Adobe hundreds of thousands of stable paying customers. It has been proven that the subscription service model is quite popular among industry customers, because enterprises can save a lot of manpower and material resources required for system upgrades, and the model of regular small renewals is more financially cost-effective and in line with the financial habits of enterprises than the one-time large-scale purchase of licenses. Considering that the first year free upgrade offer of Microsoft's next-generation Windows system does not include corporate users, Windows 365 is likely to be Microsoft's "big move" for corporate customers. As for individual consumers, Microsoft's strategy will be "one-time purchase, permanent free upgrade." After all, individual consumers' acceptance of subscription services is far less than that of enterprises, and they prefer free rather than paid on time.

The launch of a subscription service is a good thing, and it also proves that Microsoft is learning from the failures of the past few years and trying to catch up with its two major rivals, Apple and Google. However, today's Microsoft can no longer return to its peak position with just one reform. On the one hand, a large number of companies are still skeptical about the new generation of Windows, and persuading them to migrate to Windows 10 will be a huge challenge; on the other hand, the performance and functions of mobile phones and tablets are rapidly improving, and the substitution effect on PCs is becoming more and more obvious. It is still a question mark how much the subscription service can help Microsoft's market share in mobile devices, and the share of mobile operating systems is the key to Microsoft's revival. In the final analysis, Microsoft's changes were still a few years late, so that even if it tried its best today, it would be difficult to move forward. If the former overlord wants to regain its former glory, I am afraid it will have to work harder.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.