While in 2015 Microsoft was preparing to release the Windows 10 operating system, one of the developers made a very exciting statement. The developer stated that Windows 10 is the latest version of the company's Windows operating system. But six years later, Microsoft has good reason to change direction as the operating system continues to be an important product to it and its identity and consistently generates profits.
Here are six possible reasons why the company is releasing a major update for its operating system, which is expected to be called Windows 11, instead of just releasing two major updates in May and October of each year for Windows 10.
Microsoft stated that the release of new versions of the operating system increased the company's revenue growth rate. This occurred in part as a result of consumers purchasing computers with the pre-installed system. Historically, the OS has had a consistently higher profit margin, so keeping the OS version can make the company more profitable.
Attracting more investors
Computer makers benefited from the Covid-19, including Microsoft, as people rushed to buy computers for work or study. Market research firm Gartner has estimated that PC shipments in 2020 will grow faster than they have in a decade. This drove growth rates for operating system licensing revenue associated with consumer PCs.
As a result, Microsoft can release operating system updates to entice consumers to constantly buy new computers, which would be good for the company's stock price on the exchanges.
The threat to Google's Chrome OS is arguably greater than ever. Consumers are starting to buy Chromebook laptops instead of Windows or Mac computers. According to market research firm Gartner, computer makers sold 11.7 million Chromebooks in 2020. That still pales in comparison to shipments of 79.4 million desktop or laptop computers. But at the same time, Chromebooks grew by 200 percent. While personal computers grew by 11 percent.
This would pose a challenge for Microsoft to entice consumers to buy computers running its operating system.
Boost Surface PC Sales
The Surface line of computers is a very important product, and Surface computers revenue grew by more than 30 percent in the second and third quarters of 2020 thanks to the company's strong focus on its development. The redesigned operating system may prompt consumers to take a second look at purchasing the convertible tablet.
The redesigned operating system can help understand the company's public perception as Windows 10 is the most popular operating system in the world, found across more than 1.3 billion devices. So if the company can convince users that the operating system is improving, they may feel that innovation is still a top priority for the company.
This may make them more willing to pay for other company products and subscribe to the company's productivity app bundles.
Attract application developers
If the operating system is renewed, application developers may want to bring their applications to it to take advantage of the renewed public interest. In this regard, says Chris Caposella, chief marketing officer at Microsoft: Windows has succeeded in large part because developers chose to build their applications for the operating system.
Thus the company can benefit by attracting more developers of popular apps to its app store. This means that if consumers spend more time in the store, they will spend more money on apps.