Why is Microsoft's latest system win10 free?

Microsoft's latest operating system, Win10, is free. Doesn't Microsoft rely on this to make money? Why is it free? I believe many people are as confused as Xiaobian, so let's take a look at it!

Last week, Microsoft released the Windows 10 Consumer Preview in the US. This is a new system that unifies the desktop, mobile phone, tablet, Xbox and other platforms. As long as it is a genuine Win7, Win8, WP8.1 user, it can be upgraded free of charge within one year after the release of Windows10.

Operating system free is the big trend

Apple's desktop operating system Mac OS, mobile operating system iOS, Google's mobile operating system Android, are free to consumers.

And Microsoft's Windows system, driven by inertia, has been pursuing a charging strategy. After all, the operating system's revenue accounts for a large proportion of Microsoft's total revenue. In the past year, Microsoft’s consumer licensing business has generated direct revenues in excess of $10 billion.

Microsoft's 2015 first-quarter earnings report showed that its consumer-oriented licensing business revenue reached $4.093 billion, accounting for 17.6% of total revenue, and gross profit reached $3.818 billion, of which Part of it comes from Windows licensing.

Microsoft has fallen behind in the era of mobile internet, and its mobile operating system, Windows Phone, is at a disadvantage in competition with Google's Android system and Apple's iOS operating system, with a single-digit market share. As a super system to get through the whole platform, free is a good strategy.

Relying on hardware and service charges

Nowadays, the free trend of IT infrastructure is already evident. Apple and Google are taking the free path of the mobile operating system to circle users, and the profit model shifts to hardware and service charges.

An important reason for Microsoft's transition strategy is to rely on the free operating system to retain users and allow as many devices as possible to run Windows systems, thus establishing a platform to achieve service charges.

For example, Microsoft can make up for lost revenue by selling valuable services such as Office software on the Internet or the cloud.

Microsoft's first-quarter results for 2015 exceeded Wall Street analysts' expectations, driving its share price to rise more than 3%. According to the financial report, Surface's quarterly revenue was 908 million US dollars, up 127% from last year's 400 million US dollars; Xbox console sales reached 2.4 million, an increase of 102%; business cloud service revenue increased 128%. It can be seen that Microsoft's revenue growth point needs to be supported by hardware and services.

Free has been started since last year

Windows 10 is the first operating system released by Microsoft CEO Nadella last year. During his tenure, Microsoft has implemented a number of adjustments, and the free strategy has emerged since last year.

For example, the mobile version of the Office, including the iPhone and iPad, is free, and the Office 365 Education Edition is free for students from the United States and China.

In April last year, Microsoft announced at the Build Developers Conference that it would provide a free license for OEM/ODM (Original Equipment Manufacturer/Designer) partners of smartphones and tablets below 9 inches of screen. This will affect Microsoft's profits to a certain extent, but it is good news for users.

It is the guarantee of Microsoft's sustainable development to retain users for free.