Microsoft chief scientist Nathan Myhrvold opined in an internal email in 1992 that the software giant’s business model of the day amounted to no more than “retail sales supplemented by upgrades.” Microsoft, he said, should pursue new business models. “Upgrades [today] represent the closest thing we have to an annual fee or subscription,” he wrote. “This is a powerful way to draw revenue from the installed base, and to keep them loyal to our product.”
As was so often the case, Microsoft eventually acted on the futurist’s advice: The software giant adopted a subscription sales model when it began selling its offerings to the enterprise, and it has since shifted most of its product lines to subscription sales models. In fact, one might gauge the success of the “new” Microsoft by this core change to its business model.