Microsoft clawed its way back from oblivion by betting big on the cloud rather than focusing on its then-cash cow, Windows. Not only has the company become a big provider of cloud services to enterprises, but it’s also converted as many of its products as possible to the cloud.
Just consider what Microsoft did with Office. Years ago, consumers or enterprises bought a client version of Office for a one-time payment, and then used it as long as they wanted without having to pay again. These days, businesses and consumers more typically buy a monthly or annual subscription, which constantly updates via the cloud.
For Microsoft, that means a lot of additional recurring revenue.
With that in mind, the company is considering doing the same thing for Windows, but with an even stronger focus on the cloud. If Microsoft has its way, not only will people pay an annual subscription for Windows, but they’ll also load Windows directly from the cloud rather than on their own PCs.
At least, that’s the vision the company laid out in an internal “state of the business” presentation a year ago. (The presentation only recently came to light as part of a hearing in which the US Federal Trade Commission is trying to block Microsoft’s $68.7 billion acquisition of Activision Blizzard.)
In a consumer-focused section of the presentation titled “Long Term Needle-Moving Opportunities,” Microsoft said this about the importance of making Windows cloud-based:
“Move Windows 11 Increasingly to the Cloud: Build on Windows 365 to enable a full Windows operating system streamed from the cloud to any device. Use the power of the cloud and client to enable improved AI-powered services and full roaming of people’s digital experience.”
A closer look at Windows 365
That’s a mouthful and a lot to unpack. To better understand it, you need to know that Windows 365 is a cloud-based version of Windows for businesses and enterprises that streams Windows as well as its apps, data, content, and settings from the cloud to any device.
So, whether you’re on your PC at home, one at work, or a different one while traveling, you’ll get precisely the same version of Windows with all its apps, data, and settings intact. Leave off work at the office, and when you get home, you’ll be able to get back to it via Windows 365, doing exactly what you were doing at the office.
IT oversees Windows 365 in organisations; it’s not up to individuals to provide their own tech support. So IT troubleshoots any network, Wi-Fi, loading, or other issues. You’re not dealing with the vagaries of Windows and the cloud on your own.
The benefits to businesses can be considerable, according to Microsoft. Working remotely can be more secure, because IT controls the security settings of everyone’s PC, rather than individuals doing it. IT can save time onboarding new employees, because hardware setup time is considerably reduced — just stream Windows to a device. It’s easier for companies to use temporary workers, because they can be quickly provisioned with cloud-based Windows.
Bringing Windows 365 to the masses
Microsoft’s presentation makes clear it’s looking to bring that same Windows 365 model to general consumers, not just to techies who can provide their own technical support. One report says a consumer version of Windows 365 might include a cloud-based family subscription so parents could do things such as help with their children’s homework live. That same report says a pricing model of $10 a month is being discussed, although it hasn’t been set in stone.
The $10-a-month subscription is key to the consumer Windows 365 model and why Microsoft might push it so hard. Right now, consumers don’t directly pay for Windows, ever. They buy a computer with Windows pre-installed, so its cost is built into the PC’s purchase price. After that, they pay nothing. They always have the latest version, because Windows automatically updates itself.
Microsoft recently reported that more than 1 billion people worldwide use Windows. Most of them are individual users. If only 1% of those 1 billion people buy a Windows 365 subscription, that gives Microsoft an extra $100 million in revenue a month — an additional $1.2 billion a year. Each extra single percent growth in the use of Windows 365 equals another $1.2 billion. That’s as close as the company will ever get to free money.
Bugs, glitches, and too much complexity
There are major hurdles standing in the way of that becoming a reality, though, and they all have to do with the nature of the cloud and of Windows. Unlike Chrome, Windows wasn’t built from scratch for the cloud, which means it’ll never run as smoothly as a ChromeOS device.
Cloud solutions architect Vladislav Bilay put it this way to Lifewire: "Chrome, as a web-centric operating system, was designed with a focus on cloud-based applications and services. It emphasises simplicity, speed, and security for users who primarily work and collaborate online. On the other hand, Windows has a long-standing history as a versatile and robust desktop operating system, catering to a wide range of applications, offline functionality, and legacy software compatibility.”
In other words, a cloud-based version of Windows will be glitchy and annoying — even glitchier and more annoying than it already is. Beyond that looms an even bigger problem: How will ordinary, non-tech-savvy consumers get Windows to load and run properly from the cloud if something goes wrong? And as every Windows owner knows, something always goes wrong with the operating system.
I’ve been using PCs and Windows for decades and know my way around them pretty well. And yet, even I often come across annoying problems and bugs that can’t seem to be fixed, something that would doom any cloud-based version of Windows.
For example, I bought a laptop a year ago, and for inexplicable reasons, after a while it decided it would connect to some Wi-Fi networks but not others. I’ve spent hours on the phone to the manufacturer’s tech support line (when I can get through, that is) and even more hours trying to troubleshoot it myself. So far, there’s no solution in sight.
Then on my main PC there are the usual slowdowns for no reason, intermittent network glitches, a full panoply of PC weirdness — any of which could render a cloud-based version of Windows unusable. Businesses, at least, have IT staff and help desks to solve those problems. If they can’t be solved, IT simply takes away the problematic PC and gives an employee a new, usable one. Users without their own IT desk don’t have that luxury.
These issues aren’t going away any time soon. And if they don’t, I can’t imagine anyone paying Microsoft more than $100 a year to buy a product that’s inferior to the one they now get essentially for free. But that’s the direction Microsoft is hoping to take.