Suddenly, We’re Drowning in Microsoft Subscriptions (Premium)

I often write about the transition that Microsoft is undergoing and how the world's biggest software maker aims to become a major force in cloud services for its next act. But this strategy's impact on Microsoft's consumer customers is rarely discussed.

The benefits of subscription services are well-understood: For a low monthly or annual cost, you obtain access to some service or goods that would be prohibitively expensive, if not impossible, to buy outright. When the deal is good enough, it's described as a no-brainer. Depending on your needs or wants, Apple's iPhone Upgrade Program, Amazon Prime, and Netflix all fall into this category. (I pay for all three.)

But the problems with subscription services are likewise well-understood. And they have nothing to do with ownership, contrary to the FUD spread by people facing down, say, subscription music services. What it's really about is the creeping escalation of the recurring subscription fees to which we've all agreed.

On the commercial---e.g. "business"---side, from which Microsoft derives over two-thirds of its revenues, subscription services are nothing new. Microsoft's business customers have long paid for the software giant's wares by the month, so the model is well-understood. It's also beneficial to both parties: Microsoft gets a smoother revenue curve without the spikes that accompany major releases and the valleys that mark slower times. And businesses gain access to the services---software, of course, but also support---that they need in a manner that is easier to budget and pay for.

So while the licensing model hasn't really changed, Microsoft's move to the cloud has been disruptive to businesses because it is forcing them to consider and then implement, where possible, a migration away from familiar on-premises solutions to cloud-based services. And while it's on a slow creep, Microsoft's adoption of a services-like servicing model may finally help the firm break through its biggest issue with its commercial customers. It has finally figured out a way to get them to move faster to new versions of its remaining on-prem offerings like Windows 10 and Office on the desktop. These products are not services. But they are now serviced like they are.

I don't care about that world all that much. What I do care about, however, is how this Microsoft transition will impact individuals. Consumers.

And this transition will be doubly disruptive for the hundreds of millions of people who collectively account for one-third of Microsoft's revenues. That is, not only do we have to deal with the negative impacts of "rapid release"---constant, often-major software updates with often disastrous quality problems---but we also have to adapt to a world in which we are suddenly paying for software and services monthly and annually. Over and over again.

As I noted above, the commercial world---businesses, but also education and government---is infamous for the slow way in which it i...