What Led to this Mess (Premium)

When Windows 10 first launched, I celebrated the return of PC-centric user experiences and the de-emphasis of the previous regime's "touch-first" nonsense. But Windows 10 also marked an escalation of Microsoft's desperate bid to find a new way to monetize the billions-strong Windows user base in an era when Windows license sales were collapsing.

Windows licensing was a business model for the ages: It led to Microsoft's domination of the personal computing market and fed its expansion into new businesses too. But the dark side of Windows licensing is that it created a separation between Microsoft and the ultimate end-user. Microsoft sold few Windows licenses directly to people. The vast majority were---and still are---sold to PC makers. Which we should logically see as the middle-men that they are.

One might argue that the success of the PC meant that PC makers were sitting pretty for decades. But that's not the case: The PC market was always a low-margin business, even when volumes were high and growing. And the most egregious expense, always, was that Windows license.

To overcome this cost, and the fact that they were unable to customize Windows to their liking, PC makers looked for other ways to further monetize each PC purchase. There were obvious component upgrades, peripheral sales, and software bundles at purchase time, for example.

But the winning strategy, short-sighted though it was, was crapware.

Crapware has long been the bane of the PC buyer. But it's interesting to note that the worst crapware, today, comes from Microsoft, and not from PC makers. And that's because it's now bundled with Windows 10. It's something that even PC makers selling prosumer- or business-class PCs cannot remove.

Yes, PC makers still bundle some crapware with their PCs. And, yes, PC makers still try to justify this intrusion by claiming that these bundles are made to address some perceived shortcoming in Windows, to address some user need. That's nonsense. It's always been nonsense.

So what changed? Why is Microsoft, the platform maker, overloading Windows 10 today with crap?

Simple. That Windows licensing model is collapsing. And while nostalgia for the good old days is understandable, Microsoft is a business. And the Windows business needs to justify its existence. As I noted in Terry (Premium), Terry Myerson was tasked with the impossible by Satya Nadella: He had to create a software updating infrastructure for Windows 10 that would allow this mess of legacy code to be updated as if it were a modern online service. It was the only way that Windows could fit within the new Microsoft, that sudden darling of Wall Street.

But I undersold what was required of Terry. (And you may recall that I had felt rushed to get that article out in a timely fashion, and that I knew I'd be leaving out key parts of the story.) In addition to the Windows as a Service piece, he was also required to be more aggressive about monetizing the Windows ...