11/8/2019 8 ways in which Microsoft makes money from Windows 10 | Digital Citizen

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8 ways in which Microsoft makes money from

Windows 10
MISC by Codrut Neagu
[https://www.digitalcitizen.life/users/codrut-neagu] published on
06/20/2019

You might ask yourself: how does Microsoft make money from Windows 10?
Although some means are obvious, such as selling licenses, others are not, and
the company's revenue generation sources from Windows 10 may be quite
surprising. With Windows 10, Microsoft delivered not only a new operating
system, but also a different business model. Here are the ways in which
Microsoft makes money from Windows 10:

1. Selling licenses of Windows 10 (Retail,

Enterprise, and OEM)
First of all, Windows 10 is available for sale
[https://www.digitalcitizen.life/where-buy-windows-10-which-
version-should-you-buy]. Although the company allowed users of Windows
7 and Windows 8.1 to upgrade their computers to Windows 10 for free, it never
stopped selling licenses for their new operating system. Windows 10 is
available for you to buy as retail software directly from Microsoft, as well as
from shops and Microsoft partners. Considering that all Windows 10 editions
are priced above 100 USD, the company is definitely making some good
money from the retail licenses.

Windows 10 retail licenses prices

However, the big money is made from selling Windows 10 licenses to

Enterprises, which are sold in bulk, for corporate networks with thousands of
computers. Those contracts are negotiated directly by Microsoft with their
largest customers, and details are not made public. If you would like to know
more, visit: Microsoft Enterprise Agreement
[https://www.microsoft.com/en-us/licensing/licensing-
programs/enterprise?activetab=enterprise-tab:primaryr2].

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Windows 10 editions for business customers

Besides selling Windows 10 in retail stores, Microsoft also sells OEM licenses
for Windows 10. Most new computers, laptops and similar devices that you buy
from stores, come with Windows 10 preinstalled. Although you might think
that you are getting it for free, the truth is that you don't. Manufacturers pay
Microsoft in bulk, for the Windows 10 licenses that they installed on the
computers and devices that they are selling. Those licenses are called OEM
(Original Equipment Manufacturer), and they are tied to the products on which
they are installed. In other words, each time you buy a new device with
Windows 10 preinstalled, you buy a new Windows 10 license, although you
already had one on your old computer. Microsoft makes money with each new
computer that is sold with Windows 10 on it.

Windows 10 laptops are sold with an OEM license

According to Microsoft's 2019 Third Quarter Results

[https://view.officeapps.live.com/op/view.aspx?src=https://c.s-
microsoft.com/en-us/CMSFiles/SlidesFY19Q3.pptx], the company had a
15% Windows OEM Pro revenue growth, and a 1% Windows OEM revenue
growth.

2. Office 365 and Microsoft 365 subscriptions

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Many new computers and laptops come with Microsoft Office apps pre-
installed. When you open them, you are asked to buy a subscription to Office
365 [https://www.digitalcitizen.life/what-is-office-365].
However, newer versions of Windows 10, starting with May 2019 Update
[https://www.digitalcitizen.life/whats-new-windows-10], also
include shortcuts to the Office web apps. These are free, lightweight versions of
the Microsoft Office apps. Does it sound too good to be true? Why would
Microsoft give you access for free to some of its most popular software? The
idea is that you get to do basic stuff using the web apps, but, for the most
complex tasks, you need the full Office suite. And that's when Microsoft tells
you that "hey, you should subscribe to Office 365, which is only that amount of
money per month!" Do not forget that it all started from a few links well placed
in the Start Menu from your Windows 10 PC. In the third quarter of 2019
[https://view.officeapps.live.com/op/view.aspx?src=https://c.s-
microsoft.com/en-us/CMSFiles/SlidesFY19Q3.pptx], Microsoft had 34.2
million consumer subscribers to Office 365.

Start Menu links to Office web apps

Another similar method of generating revenue is through selling Microsoft 365

[https://www.digitalcitizen.life/what-is-microsoft-365]
subscriptions to businesses of all sizes. These subscriptions bundle together
Windows 10 with Office 365.

3. Apps, games, movies and other items from the

Microsoft Store

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11/8/2019 8 ways in which Microsoft makes money from Windows 10 | Digital Citizen

One of the essential parts of Windows 10 is the Microsoft Store. The store is a
portal from which you can download and install various software, both from
Microsoft and from third parties. Some of the apps
[https://www.digitalcitizen.life/top-10-free-apps-windows-10-
store] and games [https://www.digitalcitizen.life/how-do-i-
download-pc-games-microsoft-store] from the Microsoft Store are free,
but there are also a lot of them that cost money. When you buy a new app,
game or a movie from the Microsoft Store
[https://www.digitalcitizen.life/8-things-you-can-do-windows-10-
store], the company gets its share. Third-party developers are obliged to pay a
share of their Store revenues to Microsoft.

The Microsoft Store from Windows 10

4. Bloatware apps that are preinstalled in Windows

10
With Windows 10, Microsoft seems to have forever forgotten the idea of
offering an operating system that is free from bloatware. It seems that, not only
did they ditch the old Microsoft Signature
[https://www.digitalcitizen.life/simple-questions-what-
microsoft-signature] program, but the company shifted to the opposite
direction. In Windows 10, Microsoft bundles plenty of bloatware apps that
nobody wants. Even when you clean install the operating system, you still get
some bloatware apps and games such as Candy Crush Saga in your Start Menu.
Microsoft gets money from the developers who want their apps or games to be
bundled in Windows 10. Each of those apps and games, that you didn't ask for,
mean some dollars for the Redmond company. Not great for users, but great for
Microsoft.

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Bloatware apps bundled by Windows 10

Fortunately, you can get rid of those pesky bloatware apps that Microsoft
bundles in Windows 10. To know more, read this guide: Stop Windows 10 from
promoting apps on the Start Menu
[https://www.digitalcitizen.life/how-remove-and-disable-
promoted-apps-windows-10-two-steps].

5. Advertisements in Windows 10
The entire Windows 10 operating system is riddled with advertisements.
Obviously, their main purpose is to generate revenue for Microsoft. We don't
know how much but, if they didn't make money, the company wouldn't have
used them. Windows 10 shows ads in the Start Menu and on the taskbar, on the
Lock Screen, in File Explorer, and the Action Center.

Advertisements on the lock screen from Windows 10

The good thing is that you can disable all these ads and never see them again if
you follow this guide: Windows 10 ads: How to turn them off from everywhere
[https://www.digitalcitizen.life/complete-guide-turning-all-ads-
windows-10].
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6. The search feature in Windows 10

If you are using the search from Windows 10
[https://www.digitalcitizen.life/use-search-windows-10-like-a-
pro], you are also likely to use Bing, because all the web searches made in
Windows 10 are powered by Bing. If you didn't know, Bing is Microsoft's own
internet search engine, and an alternative to Google. It is the perfect
environment for the company to show you advertisements based on the
searches that you make.

Searching for web results in Windows 10

According to Microsoft's 2019 Third Quarter Results

[https://www.microsoft.com/en-us/Investor/earnings/FY-2019-
Q3/press-release-webcast?
ranMID=24542&ranEAID=nOD/rLJHOac&ranSiteID=nOD_rLJHOac-
7_pQ0yJwXnWpv1FmvQ06xQ&epi=nOD_rLJHOac-
7_pQ0yJwXnWpv1FmvQ06xQ&irgwc=1&OCID=AID681541_aff_7593_1243925&tduid=
(ir__mj6tkzwurokfrlspkk0sohz30n2xjw2pu1jysl6r00)(7593)(1243925)
(nOD_rLJHOac-7_pQ0yJwXnWpv1FmvQ06xQ)
()&irclickid=_mj6tkzwurokfrlspkk0sohz30n2xjw2pu1jysl6r00], the
company had a 12% search advertising revenue growth. A small part of that
revenue is generated by the search feature from Windows 10.

7. OneDrive subscriptions
OneDrive is Microsoft's storage service for hosting files in the cloud. In
Windows 10, it is bundled as a system app, that is always running in the
background. The good news for Windows 10 users is that OneDrive is free to
use. The bad news is that it's free only as long as you do not use all your free
space. Arguably, that free space is not that much, and you might soon find
yourself needing more. That's when Microsoft starts making money: because
you are already hooked up on the benefits of using your own cloud storage
services, Microsoft asks you to buy a subscription for more space in OneDrive,
or to buy Office 365, which includes OneDrive.

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OneDrive subscription options

8. Skype subscriptions
Windows 10 also bundles Skype, which is run and owned by Microsoft. It's a
great app both for chatting and for audio and video calls. Many business users
use it regularly. An advantage of Skype is that it also lets you call landline
phone numbers and mobile phone numbers, internationally. Guess what? If you
want to do that, Microsoft sells you minutes or subscriptions.

Skype subscription options

Skype is also part of Office 365. When you buy an Office 365 plan, you also
get minutes on Skype.

What is your opinion on how Microsoft makes

money from Windows 10?

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11/8/2019 8 ways in which Microsoft makes money from Windows 10 | Digital Citizen

There are more than a few ways in which Microsoft generates revenue from
Windows 10. Over the last few years, the company has found new ways of
monetizing its users, so that they make more money than ever before. Some
may sit well with their users, while others do not. For example, many users do
not enjoy how their Start Menu is filled with advertisements and bloatware.
Before closing this article, tell us your opinion about Windows 10 and how
Microsoft uses this operating system to make money.

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