Recently I wrote about why Windows 10 has been offered for free to the millions and millions of Windows 7 and 8 users: profit. Get ’em hooked on your shiny new OS, and then reel them in when it comes time to start upgrading your businesses, all who employ people who have become familiar with the new OS (whether they wanted to or not). But wait, Chris, isn’t Windows 10 free for businesses too? Maybe the small ones, but when you have more than a couple dozen computers, your Windows and Office applications are typically acquired through one of Microsoft’s myriad licensing programs. Up until now, one of the licensing options many businesses opted for was essentially a one time purchase of Windows for each computer, providing a license that did not need to be renewed (unless you wanted support directly from Microsoft), and in certain cases, was transferable from computer to computer as you upgraded. This model is changing with Windows 10 Enterprise, and presumably at some point in the future, for all flavors of Windows going forward. Starting this Fall, companies who want to upgrade their fleets of computers to 10 will pay $84/seat/year.
What this means for you:
With previous versions of Windows, Microsoft had committed to providing updates and patches essentially for the life of the product. You bought Windows once, presumably when you bought your computer, and never another dime to Microsoft after that. Though they haven’t outright said so, the subscription model for Windows implies that unless your subscription is maintained, updates and even certain functionality will cease when your subscription lapses. Any of you who have had your Office365 subscription lapse may have already experienced this: the software isn’t removed from your computer, but certain key functions are disabled, such as printing and saving, until your subscription is reactivated. This was a rude awakening for some who were used to the buy-it-once models of Office 2007 and 2010. Microsoft has gone on record stating that the Windows 10 licenses acquired through their free upgrade offer this past year will remain free for the “life of the machine” on which it is installed, but as you may have suspected, this free license is tied to that specific machine, and is not transferrable to a different computer. For the moment, the non-Enterprise versions of Windows 10 appear to be free of subscription hooks, but don’t count on it lasting much longer.
Adobe dared what other software companies have only dabbled in doing: converting their entire, hugely popular software library into a rental-only commodity. Why do software companies aspire to this model? As you might suspect, users of expensive software packages like Adobe’s Creative Suite or Microsoft’s Office products are able to enjoy multiple years of use from the software before reluctantly upgrading, a consumer trend that bodes ill for any software manufacturer bottom line. The solution: make your highly desirable products only available for rent, or in software parlance: “subscription-based”, guaranteeing you a regular income that will make shareholders dance with glee. While this move has angered a large number of Adobe users, the software company was able to pull the plug on ownership because of the virtual stranglehold it has on this particular category of software, especially its flagship products Photoshop, Illustrator and Lightroom, for which there is virtually no competition its users are willing to consider.
What this means for you:
Adobe’s success (or failure) will determine how other companies proceed. Microsoft already has an extensive subscription-based offering of its productivity suite, which can be rented for what most in the business world consider to be a fair price, especially seeing as how critical Office is in daily business, but “rentals” are only a fraction of its overall sales, which still come through more traditional licensing channels. Annual licensing and maintenance has long been an accepted and expected revenue generator on the enterprise side, a means to bolster profits from an ownership model that came from lengthy software development cycles that are growing shorter and shorter every year. Adobe’s justification behind the subscription model maintains that subscribers will be able to enjoy continuous improvement to and expansion of their products. The question remains, however, whether business is ready for applications and platforms that continually change. While new features and improvements are always welcome, the constant change also present bugs, security holes and training challenges that are definitely not covered by the subscription. Where before companies could control the rate at which their critical business software was changed, now they may have to join a race in which the finish line is constantly moved away from the partipants.
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