Microsoft Teases 'Windows-As-A-Service', But It's Not Talking About Windows 365

Of all the things Microsoft unveiled Wednesday at its Windows 10 event in Redmond, none grabbed more attention than its plan to offer Windows "as-as-service," a term that usually means software offered as a subscription and delivered over the Internet.

"We think of Windows as a service. In the next couple of years, one could reasonably think of Windows as one of the largest Internet services on the planet," Terry Myerson, executive vice president of Microsoft's Operating Systems Group, said at the event.

Rumors have swirled in recent years about Microsoft moving to a subscription model for Windows, which makes sense considering the strong customer uptake for the Office 365 suite of cloud apps and the marketplace's broad acceptance of the cloud subscription model.

But "Windows as a service" probably doesn't mean Microsoft is rolling out "Windows 365," at least not yet. The more likely scenario is that Microsoft will continually push security fixes and feature updates to users' PCs, tablets and smartphones without requiring them to download service packs.

A Microsoft spokesperson told CRN the vendor will provide more details on its Windows as a service plans later this year, but did provide the following statement.

"As a service, Windows will scale down to the smallest mobile devices and up to the cloud. Delivering Windows 10 as a service means that Windows isn’t just a product or a SKU, it’s an experience and a relationship—one that will continue giving value. We are committed to keep our customers updated and current with the latest security updates and new features and functionality," said the Microsoft spokesperson.

[Related: Microsoft To Offer Windows 10 As Free Upgrade For Windows 8.1, Windows 7 Users]

Chris Woodin, director of Microsoft business development at Softchoice, a Chicago-based Microsoft partner, told CRN that pushing OS updates seamlessly to devices will make customers' environments more secure.

"This is functionality that consumers have been using for some time, but we expect it to become more common in enterprises where devices are increasingly disparate and managed with less central control," Woodin said.

Still, some partners feel Microsoft, by invoking "Windows-as-a-service," is getting customers ready for an eventual Windows subscription model.

By offering Windows 10 as a free upgrade for a year to the vast majority of its consumer Windows user base, Microsoft is trying to make that transition easier by getting everyone onto its latest OS, according to partners.

Delcie Bean, CEO of Paragus IT, a Hadley, Mass.-based Microsoft partner, thinks making Windows available as a subscription would be a step in the right direction -- provided Microsoft's pricing is reasonable.

"We are seeing more and more customers wanting their expenses to be controllable operating costs that are variable based on their growth and needs, not fixed costs that require them to make a four- to five-year projection," Bean told CRN.

NEXT: Why Some Microsoft Partners Want Subscription-Based Windows

Thatcher Alexander, president of the application team at Alexander Open Systems, an Overland Park, Kan.-based Microsoft partner, said a subscription Windows-as-a-service would create new business for the channel.

"Microsoft is moving to become a SaaS company, and with most change there is opportunity," Alexander said, adding that his customers are looking for help in moving to the cloud billing model and getting their apps ready to run in the cloud.

The big question at this point is how much Microsoft would charge for a subscription-based Windows. Apple and Google offer their operating systems for free, but Windows is still a significant cash cow for Microsoft.

At the Windows 10 launch event, CEO Satya Nadella said the OS won't entail any changes to Microsoft's Windows business model.

And at a conference last month, COO Kevin Turner said Microsoft has no plan to make Windows 10 a "loss leader." He did say that "we’ve got to monetize it differently," possibly foreshadowing a "freemium" model where a basic version of Windows is free but users pay extra for advanced features.

Joseph Awe, president of TechBldrs, an Exton, Pa.-based Microsoft partner, said he thinks a free Windows-as-a-service would be an effective way for Microsoft to drive customers to its Windows app store and get them interested in other products.

"As Microsoft's competitors drive their OS prices to zero dollars, paying money for Windows makes no sense," Awe said.

PUBLISHED JAN. 22, 2015