01 February 2015

Microsoft will price match software with Google.

Microsoft used to control the software universe with 90%+ of the market, but today it is Google's Android and Apple's iOS that are embedded on nearly every device sold. The founders of the "PC on every desk" movement (how quaint) played the Microsoft Office as a Microsoft-OS only product while putting the name "Windows" on everything with unabashed certainty that the tidal wave of sales would soon flow. Unfortunately, the tide had receded as consumers moved to a new cloud universe where Office and Windows are products that only grandpa and corporate geeks would use.

Fortunately, those corporate geeks discovered that switching away from Microsoft products would be entirely too much work, so they remain the financial backbone of the company. Kids may have stopped buying Windows products and the Xbox battle with Sony may be a break-even (at best) situation, but the leaders in Redmond would simply raise the price of the code that runs businesses to more than make up the difference.

It could be argued that the original release of the (formerly called) "Metro" interface was the most disastrous piece of software Microsoft has ever created. Not because consumers did not want it - that market was already dead. It was poison because it alienated business customers. A forced touchscreen world in a cubicle and server room was a future that only Ballmer could believe in and ultimately gave him the boot. To this day, even Microsoft's most profitable and important product (Microsoft Office) still does not properly support Metro.

Seeing the potential destruction, Redmond released subsequent versions that made Windows 8 look and work more and more like Windows 7. In fact, the product is quite good but the stink surrounding it so bad that, not only are corporations not adopting it, Microsoft had to skip a version number of Windows to be as far from Ballmer's flatulence as possible.

Everything about Windows 10 will be what consumers have demanded since the moment 8 was forced upon the world and it may well be be the greatest version of Windows yet. But is it enough to return to the land of Clippy?

Satya Nadella, the Grand Poohah of the Windows army, has a map to get us back and it is a plan that should sound familiar. When they were losing the next-gen battle to the Apple Macintosh they released a piece of software for dirt cheap that copied the interface. When Netscape Navigator was eating Microsoft's lunch, they gave away Internet Explorer for free. Sony owned the next-gen console world so Microsoft built the highest spec game machine and sold it at a loss. Customers cannot resist something for nothing which is partially the reason for Google's success.

Microsoft will be giving away Windows for free. Anyone who owns Windows 7 or better (a distinction made due to hardware requirements) will get a free upgrade to Windows 10. As home users dig into Google Docs instead of Word and Excel, Microsoft also decided to give away Android, iOS and web-based versions of Microsoft Office. They will match prices with the competition. Welcome to the Land of Free.

Google can give away their products because they make huge bucks on advertising. Apple can give away products (though, they rarely do) because they make huge bucks on hardware. How can Microsoft afford to give away software? Because the business world is picking up the bill. The margin is so high on Windows Server, Exchange Server, SQL Server, Microsoft Office and everything else they sell to the corporate world, that Microsoft can give their greatest products to everyone at home and still swim in money.

The boys (and girl) in Redmond finally have a plan to stay relevant with consumers. Word and Excel on the iPad are lovely. Windows 10 looks beautiful. The price is perfect. It is truly a great day to be a fan of Microsoft. And we have corporations everywhere to thank for it.