The Windows operating system is offered as a standalone buy-once version and as a subscription-based version right now.
The standalone version of Windows 10 is available as a full retail version, as a system builder version, as an upgrade, and as something that is already on a machine that you buy.
The subscription-based version is called Microsoft 365, and it too is available in different service plans. Microsoft 365 Business is the only plan currently that is available to anyone even though it is designed for businesses predominantly.
Microsoft moves from creating retail and upgrade versions of Windows and Office to subscription-based systems. The company launched Office 365 first, a subscription-based service for Office. Plans start at $69.99 per year and include access to Office applications online and locally, as well as online storage.
Microsoft launched Microsoft 365 more recently. The new service combines Office 365 with Windows 10, and works very similar to Office 365. You sign up for a plan, pay a monthly or yearly fee, and get access to the versions of Office 365 and Windows 10 that are included.
For Microsoft 365 Business, it means Office 365 Business Premium and Windows 10 Professional. All other Microsoft 365 plans are Enterprise-only services.
Office 365 subscriptions at the end of 2016 were close to 25 million according to this Computerworld report. While the growth of new subscribers slowed down, revenue is not as Microsoft reported a year on year increase of 43% in Office 365 revenue.
Office 365 is the second fastest growing product (after Azure) in the 2017 fiscal year. It is too early to tell how well Microsoft 365 will do as it was launched just recently in 2017.
One question that comes to mind is whether users will switch from a pay-once system to a subscription-based operating system. While Microsoft seems to focus on the Enterprise heavily right now with Microsoft 365, it seems very likely that the company will extend the service to include Home plans as well in the future.
Advantages and disadvantages of operating system subscriptions
What are the advantages of subscribing, and what are the disadvantages of doing so? Microsoft 365 includes both Office 365 and Windows 10 which means that you get access to both with a single subscription.
Since it is a subscription-based service, you will always have the chance to upgrade to the latest version of Office or Windows without having to make another one-time payment to do so.
Many of the features that are part of a subscription are mostly interesting to businesses right now. These include device management services to manage users and device settings, deployment using AutoPilot, or automatic deployment of Office apps on PCs.
To be fair, there is no Microsoft 365 Home plan currently. If Microsoft launches it in the future, it will probably do away with the business-focused services that Microsoft added to other plans.
One of the main downsides of subscribing instead of buying once is that you pay more. The cheapest Microsoft 365 plan is offered for $20 per month currently. It includes an Office 365 and Windows 10 subscription and will cost you $240 per year.
Microsoft sells Windows 10 Pro on its website for a one-time price of $199.99, and Office Home & Student 2016 for PC for $149.99. That's roughly $350 in expenses in the first year, and not taking into account that you can buy Windows 10 and Office for less.
In the second year, you pay another $240 for the subscription so that you are at $480 in total; that is $130 more already than for the standalone products.
If you use the device five years, you end up paying $1200 in that time for the subscription, and $350 for the standalone products.
Even if you assume that Microsoft 365 Home would be offered for a cheaper price, you'd still save money buying once instead of subscribing. If the subscription price drops to $10 for a Home version for instance, you'd still pay $600 over five years.
Another disadvantage of subscribing is that you will lose access or functionality when you stop payments.
Now You: Would you subscribe to a Windows plan? Can you think of other advantages or disadvantages?