There was once a time when the release of a new version of Windows would result in a huge upswing in PC sales. Now, ahead of the release of Windows 11, Microsoft could well plunge a dagger through the heart of the PC industry.
This week Microsoft announced Windows 365, a new service that will allow businesses to access virtual Windows 10 or 11 PCs through any web browser. It doesn’t matter if you’re using a desperately old ten-year-old laptop, an iPad or even an Android smartphone, you’ll still get the same performance from your Windows ‘PC’ because it’s being streamed from Microsoft’s servers. As long as you’ve got a device capable of running a web browser, your PC has (in theory, at least) all the performance it needs.
If you’ve got shares in Dell, HP or any other PC maker, it’s time to be very worried indeed.
The Windows magic
It’s all a long way from the PC boom time of Windows 95. The successor to Windows 3.1 really signaled the start of the home PC era.
Microsoft released Windows 95 with a massive marketing campaign that sent sales of new PCs rocketing. With Microsoft cranking up the system requirements for Windows 95, even those early adopters who already had a PC in the house were practically forced to buy a new PC to run Microsoft’s ground-breaking new operating system.
It was a gold rush for PC manufacturers that was given further impetus by the mainstream adoption of the internet in the latter half of the decade. Suddenly, everyone didn’t just want a PC, they needed a PC.
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Such was Windows’ ability to shift new PCs that, towards the end of the decade and into the new millennium, there were suspicions that Microsoft was shoving out new versions of the operating system – such as the dismal Windows Me – purely to pep up the company’s sales charts. PC manufacturers didn’t mind one bit.
When Windows XP was released in 2001, it sold 17 million licenses (mainly on new PCs) in the first two months, more than four times the sales of Windows 98. “Today, just two and a half months after the launch of Windows XP, more than 17 million people are enjoying the new experiences, stability and security that Windows XP offers,” Microsoft chairman Bill Gates said at CES in January 2002. “This is our best-selling release of Windows ever, and one that is creating great opportunities for PC manufacturers and our other partners in the industry.”
It was a back scratching on an epic scale.
Windows in the cloud
Now, instead of back scratching, Microsoft could be plunging a knife into the back of the PC makers.
Windows 365 eliminates the need to buy a new PC. You can get Windows 11 and new PC performance using your existing hardware for a modest monthly fee. Microsoft has yet to reveal full pricing, but one price plan leaked earlier this week put the fees at around $30 per month, although cheaper plans will be available. For a business looking to avoid the up-front cost of new hardware, that could be very tempting.
Instead of buying a new PC, all the business will need to do is give employees a screen and a lightweight piece of computing hardware to run the browser. It could be something as rudimentary as the USB compute sticks or even a Raspberry Pi that costs much less than $100. If staff are working from home, they can use their own laptop or tablet to log in to the ‘work PC’ and the company doesn’t really need to worry about staff using their own equipment for work purposes and all the security risks that brings. Everything is sealed in the cloud.
Right now, Windows 365 is only a business offering, but it seems like it’s only a matter of time before Microsoft offers this to consumers too. Perhaps it’s giving its PC partners one last Windows release before it announces Windows 365 for consumers next year, although the release of a new version of Windows isn’t the massive driver of PC sales that it once was.
Microsoft already has all the pieces in place to make Windows 365 a hit for consumers, not least on the gaming side. Yesterday, I spent a few hours playing Xbox games on my Mac using the beta of Microsoft’s Xbox Cloud Gaming service. This lets you play the latest console titles on practically any piece of hardware with a screen, without having to splash out on a console or an even more expensive gaming PC.
Imagine all this bundled in one package, with the Microsoft Office apps and a couple of terabytes of OneDrive storage for all your files, for a modest monthly fee. No need to check your PC specs every time you buy a new game or piece or software; no need to worry about backing up your data, as it’s all backed up multiple times in Microsoft’s cloud; no need to fuss with Windows Update or antivirus software because it’s all done for you.
This shift isn’t going to happen overnight. There will still be a sizeable constituency who want and need local computing power too, who won’t want to rely on the cloud and a stable broadband connection for their computing.
But Windows 365 is the biggest threat the PC market has ever faced, and it’s coming from the company that gave it life in the first place.