1. JohnIvory's Avatar
    I just wanted to clear this up because I've been seeing a lot of people saying this over the past week since Windows 10 debuted. Windows 10 has a lot of issues. It's less usable than Windows 8.1 on tablets; battery life on laptops and tablets is lower; there are UI mismatches the second you attempt to use a legacy app, or sometimes even an old WinRT app; a lot of people have upgrade issues; and there are huge concerns about privacy and how much data Microsoft is vacuuming for telemetry and advertisement.

    None of these issues, NONE, is because Windows 10 is free. Windows 10 isn't finished out of the gate because Microsoft is "losing" money with and so had to scale back on their engineers. Windows 10 doesn't send data to Microsoft because Microsoft is losing money and needs to make it up by monetising their users.

    Let's do a little math. Historically (at least since Vista) a smaller and smaller fraction of people upgrade the operating system on their PCs. They simply use the OS that comes with it and then get a new OS when they buy a new PC. Let's assume that about 2 million people worldwide upgrade their PCs when a new one is released. I believe this is a serious over-estimate, but you're welcome to disagree. Now we'll assume that a good chunk of these people are upgrading to Pro, because Pro users are more likely to follow tech news and want all the bells and whistles like Active Directory, Domain support, Bitlocker, etc. We'll round up and say all of the 2 million bought Pro. This means that 2 million people would have spent $130 each, giving us $260 million.

    In Q3 2015 Microsoft generated $21.73 billion dollars with a profit of $6.6 billion. In Q4 2015 Microsoft generated $22.2 billion dollars in revenue, but lost $3.2 billion due to the Nokia write-down. These numbers are for 3 month-quarters. Microsoft generates 85 times more money in 3 months than they would get from one-time Windows upgrades across 4 years! (average time between Windows releases). Removing poor investment decisions, Microsoft makes in profit 25 times(!) the money they would make from these one-time Windows upgrades.

    People upgrading their PCs have never been a source of money for Microsoft. They make their money from volume licensing to OEMs and Enterprises and from support. With Windows 10, arguably Microsoft's last hail-mary in the mobile world, they needed as many people as possible on the OS to cut support costs and to move forward with their 1-OS vision. And judging from the numbers (67 million this week) they're succeeding. Apple does the same thing. The more people use your new OS, the more likely developers are to support your new APIs and you suddenly have more money to spend on new features instead of maintaining legacy due to stubborn consumers.

    Windows 10 is free because Microsoft wants all of us on it as soon as possible. Windows 10 is unfinished/buggy because Microsoft wants all of us on it as soon as possible. The sooner they released Windows 10 the sooner that was going to happen. Microsoft is not losing any appreciable amount of money by making it free, at least not the kind they can make up for by customising ads to your use habits. They are simply jumping on the connected device bandwagon.

    Could they abuse their power and spy on you? Possibly. Could the US government ask extra-judiciously for data on you and have Microsoft give it to them? Yes. (Oddly enough if you're a foreign national and your data is kept offshore Microsoft is actually pretty bullish on protecting your rights). Could they (the U.S. government) do the same for Google? Yes. Do they do this for your cell-phone carrier? Definitely. Do you gain a lot of convenience by having your data sent to Microsoft for a customised experience? Sure. Do you think it's worth it? Can't answer that for you. But if you don't there're a lot of articles online detailing how to bump-up your privacy in Windows 10.

    Whatever your issues are with Windows 10 I can't be clearer on this: It's not because it's free. You weren't going to give Microsoft that money anyways.
    08-08-2015 03:34 PM
  2. a5cent's Avatar
    I completely agree with your basic point. None of the current issues have anything to do with it being free. IMHO Vista had far more issues and that wasn't free.

    I just want to point out that it's by no means an overestimate to assume that 2 million people worldwide upgrade their OS when a new version of the OS is released. That's a very small number. Windows 10 was installed over 25 million times in less than 10 days. Sure, that number wouldn't have been anywhere as high had it cost something, but over the course of it's lifetime, every version of Windows has garnered quite a few upgrade sales, particularly if we include corporate volume licensing and not just consumers.

    I have no idea how large that number is. I'm not aware that MS even publishes their retail/volume licensing sales numbers, but it's most definitely above 2 million.
    Al4video likes this.
    08-08-2015 03:59 PM
  3. JohnIvory's Avatar
    But that's exactly the point. Volume licenses are not free for Windows 10. The only free thing is upgrades from Windows 7/8 for consumers in Pro and Home, essentially the single licenses tied to each PC. That's why I didn't count volume licensing, or OEMs, or enterprise. That's where Microsoft makes their money, not consumer upgrades.
    a5cent likes this.
    08-08-2015 05:32 PM
  4. realwarder's Avatar
    Microsoft wants everyone on 10 which is why it is free. They want developers to be able to write UWP apps and that can only happen if everyone is on Windows 10. There was no motivation for a developer starting a new project to write a WinRT app with 8 because so few Windows users could run it!

    By pushing everyone to 10 and removing all reasons for users not to use 10 suddenly there is a reason why developers can now write modern apps and that is key to the universal app platform.
    a5cent likes this.
    08-08-2015 05:52 PM
  5. JohnIvory's Avatar
    Microsoft wants everyone on 10 which is why it is free. They want developers to be able to write UWP apps and that can only happen if everyone is on Windows 10. There was no motivation for a developer starting a new project to write a WinRT app with 8 because so few Windows users could run it!

    By pushing everyone to 10 and removing all reasons for users not to use 10 suddenly there is a reason why developers can now write modern apps and that is key to the universal app platform.
    Exactly. It's just that whenever some new issue with Windows 10 pops up people start saying "This is what you get with a free OS". It was especially bad with the privacy settings and ad-supported Solitaire, with people thinking that Microsoft was doing this to make up for all the money they've lost giving Windows 10 away.
    08-08-2015 06:09 PM
  6. realwarder's Avatar
    Exactly. It's just that whenever some new issue with Windows 10 pops up people start saying "This is what you get with a free OS". It was especially bad with the privacy settings and ad-supported Solitaire, with people thinking that Microsoft was doing this to make up for all the money they've lost giving Windows 10 away.
    I'm totally with you. Nothing was because of free. Perhaps some because they pulled forward the release a few months which was impressive, but not because of free.
    a5cent likes this.
    08-08-2015 06:22 PM
  7. a5cent's Avatar
    But that's exactly the point. Volume licenses are not free for Windows 10. The only free thing is upgrades from Windows 7/8 for consumers in Pro and Home, essentially the single licenses tied to each PC. That's why I didn't count volume licensing, or OEMs, or enterprise. That's where Microsoft makes their money, not consumer upgrades.
    Yeah, I was really tired when I wrote that. Volume licenses have nothing to do with this.


    Still, even just retail sales will count for multiples of 2 million though. I'm not disputing your point at all. I just wanted to say that sacrificing retail profits is still a very substantial "giveaway". As has been said, it's just a necessary sacrifice if MS is to have any chance of populating the store.
    JohnIvory likes this.
    08-09-2015 12:23 AM
  8. Skamath's Avatar
    I'm totally with you. Nothing was because of free. Perhaps some because they pulled forward the release a few months which was impressive, but not because of free.
    That is exactly one of the concerns I was trying to get across minus the impressive part. So what would you say to this.
    08-10-2015 02:42 AM
  9. Skamath's Avatar
    Yeah, I was really tired when I wrote that. Volume licenses have nothing to do with this.


    Still, even just retail sales will count for multiples of 2 million though. I'm not disputing your point at all. I just wanted to say that sacrificing retail profits is still a very substantial "giveaway". As has been said, it's just a necessary sacrifice if MS is to have any chance of populating the store.
    Investment doesn't necessarily mean that you have to get fresh capital from somewhere. It just means redirect some money that you already have aka profits and use that as the capital for the investment to get the returns in the future. One time low returns means nothing but people don't see it like that. Market will always see where the profits are heading and based on that the share value.

    The "people mindset" that the op is talking about however is not that evident in this forums. Mostly all the posts after the "big" launch have been just about problems that people have encountered be it because MS was not ready of the public wasn't.
    08-10-2015 02:49 AM
  10. Skamath's Avatar
    About the Volume license making them money I have my concerns.
    I work in a major retail chain in Aus. In the back office I see all the systems running Win7 not 8 or 8.1. The branch mobile phones are all El cheapo nokia's running on win 8 never updated. EVER!! Nobody uses them anyway. The stores get sent an Ipad and not a windows tablet, so they can be mobile instead of sitting on the backsides getting fatter by the day. When on the phone with the techsperts about some IT issues, some of them have heard about win 10 but don't know much about it. No bigshots upstairs wants to spend money as they want to be profitable but heaps cheaper than the rivals. So in the ignorant economic situation, a major chain in Aus "doesn't know" about the new OS then how many across the globe will consider it even if then know about it?
    08-10-2015 02:56 AM
  11. egold70's Avatar
    Yeah, I was really tired when I wrote that. Volume licenses have nothing to do with this.


    Still, even just retail sales will count for multiples of 2 million though. I'm not disputing your point at all. I just wanted to say that sacrificing retail profits is still a very substantial "giveaway". As has been said, it's just a necessary sacrifice if MS is to have any chance of populating the store.
    Well, the "giveaway" was already there when Win 8 came, most of the people were allowed to upgrade cheap
    Every new PC was eligible for 8 pro for symbolic price of 14.99$, I did that and upgraded from 7 home to 8 pro several PC`s
    Even those with older machines were offered 8 pro for just 39.99$ or 29.99 euro. IMO very few if any paid the full upgrade price for Win 8.
    My point is that OP`s figures are probably overestimated at least for 7-8 upgrade path and this even strengthens his statement.
    They gave as Win 10 earlier and in beta stage as a software because they want everyone on it ASAP!
    The 67 million installs in a week though were nothing more than disinformation, probably to force even more upgrades, the real figures are significantly lower, some like myself even reverted back to 8.1 especially on tablets, the touch OS is simply not ready
    08-10-2015 04:47 AM
  12. a5cent's Avatar
    Well, the "giveaway" was already there when Win 8 came, most of the people were allowed to upgrade cheap
    I don't understand your argument or whether you're arguing at all.

    There is no relevant connection between the revenue MS sacrificed to popularize W8, and the far larger sacrifice MS is making now to popularize W10.

    My point is only that it's false to think that sacrifice won't be felt by MS. It's a very significant sum of money MS has decided to not pick up and leave lying on the road.

    I'm not aware of MS publishing retail sales numbers, so we can't know how large that sacrifice really is, but I do know that two million is an extremely small number considering there are 1.25 billion Windows installations world wide. Even if only 1% (I'd guess more) of them tend to eventually upgrade their OS, that's still revenue from 12.5 million upgrades MS decided not to pursue, not 2.

    I completely agree with the OP that this isn't in any way jeopardising MS, but that doesn't mean that it doesn't hurt at all either. That's all I'm saying.
    08-10-2015 05:17 AM
  13. pericle's Avatar
    But OP you are forgetting that Microsoft will be losing revenue from people who after receiving the free Windows 10 upgrade decide to keep their current PC for a few more years. Windows 10 and even Windows 8 are much faster and perform better than Windows 7. Anyone upgrading from Windows 7 will definitely not be feeling the need to change their PC for a few years. While we won't be able to quantify the exact number of lost sales I am sure it will be at least a few million people.

    That said, I am actually disappointed in the way Microsoft has rushed out Windows 10. I have a HP laptop with Windows 7 and my local HP representative advised me not to upgrade. Said they have had many complaints from customers after installing Windows 10. This will really not help with people's perception about Windows 10.
    08-10-2015 12:00 PM
  14. xrko's Avatar
    Win 10 has changed my attitude toward $MS. This is a good OS and I am activated free. I wiped and did a clean install on Win7 ult before doing my upgrade using the ISO. I was then activated. I then did a clean install with the ISO. I have ZERO problems. It is quick and snappy and I love it. I don't mind paying for my next license. On down the line, $MS will reap the benefits.
    08-10-2015 02:43 PM

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