When Microsoft announced last year that the Windows operating system (OS) would no longer be offered as an installed program but rather just as a cloud-based, as-a-service subscription, it didn't do anything revolutionary. In fact, companies such as Adobe had already been applying a similar model for it products and services. The advertised intention behind the as-a-service model was that it would enable the vendor (in this case, Microsoft and Adobe) to make constant and immediate updates to products, delivered via the cloud.
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Still, Microsoft's Windows-as-a-Service model was met with some derision as critics bemoaned the need to update to Microsoft Windows 10 from previous versions, as well as the lack of control users would have over which new updates to install. So, if you are perfectly happy with the one-time license you bought for Windows 7, too bad, since you'll eventually have to move to Windows 10 and accept most of the changes Microsoft makes to the OS as it evolves.
Unfortunately for Microsoft critics, the company has continued a steady rollout of as-a-service pricing for many of its commercial products. In the past month alone, Microsoft introduced a new servicing model for Windows Server 2016 as well as a servicing model for Microsoft Surface hardware.
In the case of Windows Server 2016, traditionally, users would purchase the product and receive five years of mainstream support as well as five years of extended support. This option is still available but Microsoft is actively pushing what it's calling the "Nano Server" installation, which will follow an as-a-service model (similar to Windows 10). Under the Nano Server plan, users will receive active and constant servicing of the Windows Server product into perpetuity. Microsoft plans to make two to three updates per year, none of which are mandatory. However, users won't be able to skip two releases before a mandatory update is required.
For the Microsoft Surface-as-a-Service plan, Microsoft will work with its partner resellers to package Windows 10 and Microsoft Office 365 subscriptions with leased Microsoft Surface devices. This is similar to a move made by HP earlier this month. The plan is designed to give customers access to newer hardware and more immediate software updates as well as the ability to offload the cost of ownership and maintenance of devices. The terms of each agreement will be dependent upon the number of units, the type of units, and the partner reseller with which the customer works. At this point, all we really know is that the Microsoft Surface has become a service as well as a product.
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"Some of our customers don't want to carry the ownership of these devices on their books," said Hayete Gallot, GM of Commercial Devices for the Windows & Devices Group at Microsoft. "Companies don't want to manage an IT [information technology] fleet. We can manage that for you and support it for you. You need an update on the device [and] we're managing that for you. You don't need an IT team."
Gallot said Microsoft heard from its business customers that they enjoyed the software licensing model and that they would be interested in extending the practice to hardware. Microsoft ran a pilot program and found that its customers were happy to get access to the latest devices as they were released (as well as the latest software updates).
"Customers are very interested in a refresh model," said Gallot. "Getting the latest and greatest faster...Making people happy on a daily basis is what we're hoping for."
Gallot even said Microsoft is looking into a leasing program for the Microsoft Surface Hub, and proactive device and application performance monitoring (APM) through Microsoft Power BI to determine how well Microsoft Surface devices are performing before problems start to occur.
Is the End of On-Premises Software Near?
As Microsoft continues to push an as-a-service agenda, one has to wonder if we'll soon see the end of installed software. Microsoft has been hesitant to force the cloud model on businesses, particularly those who have on-premises, dedicated IT requirements that require constant management and support. For those users, Windows 10 Enterprise will be repackaged as the Secure Productive Enterprise E3 suite, which Microsoft announced earlier this month.
Essentially, Secure Productive Enterprise E3 is a package of Microsoft licenses—Microsoft Office 365, Windows 10 Enterprise, and Enterprise Mobility and Security—bundled into one single license. This move is designed to simplify the management of multiple Microsoft products by limiting the different payment, update, and refresh cycles to one single package.
"With Windows 10, we are aiming to reduce the need for the time-consuming and costly wipe-and-reload approach to OS deployment," said Nic Fillingham, Senior Product Manager for Windows Small and Midsize Businesses. "We created a streamlined, reliable, in-place upgrade process that can be initiated using current management infrastructure. Through new dynamic provisioning capabilities, businesses are able to configure off-the-shelf devices, without reimaging. From a management standpoint, whatever the solution, Windows 10 helps meet customers' management needs."
When directly asked if we're looking at the end of the on-premises software licensing model, Fillingham said no. But it's clear that Microsoft is doing its best to phase out its on-premises solutions. Just look at the end-of-support dates for its most popular installed programs for proof.
For now, we'll have to continue to read the tea leaves to determine if and when Microsoft will finally eliminate on-premises deployments. But we can look back at a statement made by Satya Nadella, CEO of Microsoft, back in 2014, about his secret to success to determine whether static, installed apps or cloud-based, always-connected, always-evolving apps are the future of Microsoft.
"You renew yourself every day. Sometimes you're successful, sometimes you're not but it's the average that counts," Nadella said.