Microsoft Corporation May Pursue a Bold Strategy With Windows 9

Rumor has it that Microsoft might give away free upgrade licenses to the next version of Windows. What's the big idea -- and will it even work?

Aug 5, 2014 at 7:00PM

Microsoft (NASDAQ:MSFT) kind of botched the endgame for Windows XP. The venerable platform didn't go out in a bang of forced upgrades to Windows 8.1, as Redmond had planned, but continues to live beyond its scheduled termination date.

Even now, four months after Microsoft pulled the support plug on Windows XP, the 13-year-old platform stands for 25% of all Web requests on the desktop. That's behind only Windows 7 and far ahead of any other operating system -- including Microsoft's preferred Windows 8 series:

There's no question that Microsoft could have handled the passing of Windows XP's torch better. Vista was a terrible successor, roundly rejected by consumers and IT shops alike. Windows 7 made up for many of Vista's failings and stepped up to become the most popular Windows version today. But Windows 8 dropped the baton again, setting Microsoft up for another tense generation shift when Windows 9 hits store shelves.

Bear in mind that Microsoft is accelerating its Windows support schedules. XP lost mainstream support after eight years and extended security support in 13 years.

The original release version of Windows 7 dropped out of mainstream support in just 4 years. The Service Pack 1 version goes into extended support 6 years after the first sale, and drops that limited corporate backing after a total of 11 years. Windows 8 will follow Windows 7's quicker expiration schedule.

Fool Flickr Msft Logo Sign

Here comes the next generation. Are you ready?

Windows 9 is coming, and maybe sooner than you'd expect. According to ZDNet, Microsoft is putting absolutely minimal further polish on the Windows 8 series, focusing every effort on a larger Windows 9 release -- perhaps as soon as the spring of 2015.

Given Microsoft's one-two cadence of alternately popular and flubbed Windows releases, this will be the release to replace Windows 7 in the mainstream -- and to finally help users forget all about Windows XP.

If that wasn't enough pressure, keep in mind that traditional Windows users have serious alternatives these days. For consumers, Apple (NASDAQ:AAPL) holds a small but significant corner of the desktop market. Another disappointing Windows version for computers could start a mass exodus to various tablet and smartphone options. In the corporate world, Mac OS X rears its threatening head once again while Linux platforms such as Ubuntu and Mint fill in their productivity toolkits.

In other words, Windows 9 will have some mighty big shoes to fill. Microsoft just can't afford to fumble this hand-off.

What's the master plan?

For one, Microsoft allegedly plans to make Windows 9 look and feel like a tablet if it finds itself installed on a touchscreen system, and otherwise as a traditional desktop with a full Start menu and everything. That's a great start, and will help the XP and Windows 7 crowd feel more at home on their next-generation desktops.

But catering to the throwback market isn't enough to ensure Windows 9's success. Fortunately, Microsoft might have another ace up its sleeve: Free upgrades for existing Windows customers.

Yes, sure, Microsoft will also introduce new features and improve the system's stability. That goes without saying, but none of these improvements are likely to motivate an all-hands-on-deck migration.

Fool Flickr Msft Install Media

But if you tell people that they can have the latest and greatest Windows version today for the unbeatable price of zero, you can bet that they will show up at the checkout counter by the millions. Proof of older Windows purchases in hand, they'll be ready to enjoy several more years of security updates with a side of appetizing new features. And the Windows legacy lives on.

According to ZDnet's anonymous sources, this offer might cover users from the Windows 8 and maybe even Windows 7 camps. XP is allegedly left out in the cold again,

I would add that Microsoft would be likely to offer a limited Windows 9 installation as a free upgrade. That way, the new next-generation users will have a revenue-generating carrot to stretch for. If you want full multimedia functions or enterprise networking tools, you'd better pay up for a higher-end Windows 9 edition. That's the way Microsoft has shipped its Windows installations ever since Vista, after all.

The Home Basic version of Windows 7, for example, also comes with all the information necessary to install Windows 7 Ultimate. Just pay for a better Windows license, run the Anytime Upgrade tool with the new license number, and you're good to go.

Will it work?

Microsoft has an easy way to boost its Windows 9 conversion figures. If CEO Satya Nadella manages it correctly, this wave of upgrades would stabilize Windows as a viable notebook and desktop platform, while also clearing the path to further upgrades that send some money to Redmond.

Fool Flickr Windows Xp

I'm betting that Nadella will play the free upgrade card. He has shown a willingness to try new tricks, while predecessor Steve Ballmer was more likely to stick with established methods even as they grew obsolete. For example, Nadella already made Windows Phone licenses free for smartphones and small tablets. That's not a move I could imagine Ballmer making, even if Microsoft's life depended on it.

So Windows 9 seems poised to erase at least some of the bad blood that Windows 8 created. Will it be good enough to keep Windows 7 and Windows XP stragglers in the Microsoft fold? That depends on the new platform's spit-shine polish and Nadella's willingness to revisit the desktop-centric model that Ballmer wanted to kill.

Beset by powerful rivals on every side, Microsoft wants to fortify its software throne. Giving Windows 9 a chance to succeed just might be the best bulwark Microsoft can build right now.

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
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Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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