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Windows 10 - last Windows OS release?

In what at first glance seems to be a fairly odd move Microsoft have announced that Windows 10 will be their last ever edition of Windows.

Since Windows 95, the first fully-functioning Windows Operating System (OS), was released Microsoft have been creating a new edition of Windows every 3 or 4 years.  However in a conference earlier this month it was announced that the forthcoming Windows 10 would be the final version of Windows to be released. 

Going forward Microsoft will continue to provide updates to the operating system in instalments (likely similar to the updates and service packs currently available) ensuring that you never need to buy a new copy of Windows again.

Will they lose money doing this?

Although this may seem like a money-losing scheme the actual economics aren't quite as simple.

For a start Microsoft will still make a lot of money by selling Windows licenses to system builders, which wrap up the cost to the consumer in the sale price of each new PC.  This revenue stream won't go away, and accounts for the vast majority of their desktop operating system licence sales.  Microsoft will also make savings in not having to market (so much) a new OS release every few years, trying to convince users to buy something to replace the OS they're already using, and probably don't see a point in replacing.

Finally it means that (eventually) the vast majority of users will be on a single version of the OS.  Currently there's still a large user base of Windows XP and Windows Vista users, in addition to the more modern Windows 7 and Windows 8 editions.  Microsoft currently support 3 separate desktop OS editions, all of which needs regular security patches and updates, soon to be 4 when Windows 10 is released (and until support for Windows Vista discontinues).

The future?

So is this actually going to make a huge amount of difference for the average user?  In short, no.  Most people only buy an OS as part of a new PC and so never notice they're parting with money for it.  Microsoft also reserve the right to change their mind and market new versions of Windows going forward if this became of (financial) interest to them again.

The only real issue would be if Microsoft try to sell Windows as a service, expecting a regular yearly fee for using the product, as they do with Office 365.  At the moment it seems unlikely they'd attempt this, but who knows what the future holds.  For now at least you can all feel good about a few "free" updates.