If you have a Windows installation
on your computer, you’ve seen the advertisements. Windows 10, the new, free
installment of the Windows operating system. It seems like a good deal; a free
software upgrade to a newer version of Windows.
We don’t live in a world where
companies provide free upgrades out of the goodness of their heart. It’s not
good business sense. So the question arises; why does Microsoft want to give us
Windows 10?
Well, there’s a saying; if you’re
not paying for it, you’re the product. That’s the axiom that’s driving the ‘free’
upgrade to Windows 10. The new operating system features new data collection
capabilities that are enabled by default. Microsoft is making a play towards Facebook’s
business model of collecting and selling data as a commodity.
It’s not a bad way to do business.
The collection side is a little underhanded, but the economics are solid.
According to a Financial
News Report, an active user’s data is worth around $4.50 to Facebook. That’s
not including the wealth of personal user data that an always-on operating
system can gather. Apply that number to the 110 million people who have
upgraded to Windows 10, and Microsoft has made roughly $500 million on the new
upgrade. That’s not accounting for the fact that the new users are a captive
market; there’s no way to downgrade without buying a new copy of Windows.
However, there’s a discrepancy between
the projected value of a consumer and the retail value of Windows 10. The
software sells for $120 on Microsoft’s online store. A single consumer is worth
less than $5. So where does the extra money come from?
Another way that Microsoft makes
money off of Windows 10 is the reduced cost of maintenance. Maintaining
software is expensive, and is a stage that can last years. By offering the free
upgrade, Microsoft can guarantee that the majority of their users will switch
over to the new operating system immediately. They can reduce legacy support
for old operating systems and, in doing so, save money.
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