Microsoft to retry the pirate model

  The idea of offering free Windows for smartphones and tablets may look like a surprise, but in fact it is nothing new with Microsoft. In fact Microsoft has always been the biggest supplier of free software in the world. Not officially, but in fact exactly - number 1.

   The super successful business model of Microsoft that has made Bill Gates the richest man in the world, is quite simple – Microsoft is establishing a software standard by allowing masses to use Windows with illegal pirated copies. And after the standard is fact, they are pressing the users that can not avoid paying to pay very high monopolistic prices. And as there is no competition, they pay.
   When more than 90% of PCs are using Windows, to survive in business and be compatible in the world, you can not avoid Windows. But officially Windows is not free. So if you are a corporation, mid or small business, you simply have to pay. SOHO segment, especially in its part “home office” is “infected” with illegal software. But this is impossible for real business making people that can not risk being caught without a licensed copy and their computers confiscated, along with real business data on them. So you are just paying.
   For many years Microsoft refused to open its code and allow creating a universal operating system standard so many OS to appear and do one and the same (like was in DOS era). Instead they kept the monopoly over the OS-standard and this way extracted much money from customers, although allowing many other customers to use the software for free.
   Microsoft could implement much more complex and secure protection on its software. There is no perfect protection, but there is good enough protection. Much other software developers are using such systems and making meaningless any attempt to use a pirated copy. But not Microsoft. Even today their paid software is easily copied and used as illegal. You can even download updates with illegal installation. So is that by accident?
   Obviously no. It is part of the successful strategy to take control of the market.
   It is not sure such idea will work with tablets and phones. The reason is that already there is a competitive market there. There are competing OS platforms with any of them accumulating enormous quantity of applications. Entering this market with a new free platform guarantees nothing. You can’t make money from free technologies and there is no perspective something to change. I.e. you will not find the needed customers that are obliged to pay.
   The business model of Apple is to sell expensive hardware and create a religion. The business model of Android is being addition to the whole portfolio of Google Web services. The OS is almost free, but Google makes money from selling applications, created by 3rd parties.
   The only resource Microsoft has is the strong position in PC market. If all tablet software is compatible with the main used applications in PCs that could transfer business from PC to tablet business. But that was the idea of acquiring Nokia. And nothing happened up to now. Android and Apple are remaining the main players on the constantly expanding market.
   The most obvious result that is to happen now is some smaller laptops to become cheaper. OEMs will try to offer hybrids and touch screen netbooks with up to 9 inch displays with pre-installed Windows. This may resurrect the hit by tablets market of netbooks. But what Microsoft will win of this is not clear. A market share of paying 0 customers.
   So trying now officially and legally to present the previous “pirate driven” business model is not the greatest idea of Microsoft. But who knows…

Dobri B.
April 7th 2014

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