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Satya Nadella, CEO of Microsoft, talks with Herbert Diess, CEO of Volkswagen AG, on February 27, 2019 in Berlin (photo not shown).
Sean Gallup | Getty Images
Microsoft is planning to have organizations pay for more products – all because of old products.
The company's customers are pretty much in the middle of the upgrade cycle of Windows 7, an operating system that appeared ten years ago, to Windows 10, said manager Kirk Koenigsbauer at a financial event on Tuesday. .
As customers upgrade or purchase new Windows 10-based computers, this provides a tremendous opportunity for Microsoft to make existing customers purchase new product packages, in part through a bundle called Microsoft 365. This could generate more revenue per user, could lead to higher profits in the coming quarters.
"This is an important year for desktop modernization," said Koenigsbauer at the JPMorgan Global Conference on Technology, Media and Communications in Boston. "This allows us to do better sales work at higher service levels, etc."
Microsoft is increasingly making its Azure public cloud the centerpiece of the company in pursuit of Amazon, but Windows is still important from a financial point of view. Last year, Microsoft generated $ 19.5 billion in Windows revenues account for nearly 18% of its revenue and its former CEO, Steve Ballmer, recently estimated that Windows still reported $ 13 billion to $ 14 billion in profits each year.
Koenigsbauer is responsible for a set of products called Microsoft 365, which includes Windows 10, the suite of productivity applications based on an Office 365 subscription and mobility and security tools for business. Microsoft introduced the Microsoft 365 bundle about two years ago, he said.
The upgrades will depend in part on the end of life of Windows 7. Microsoft has announced that it will no longer provide support and security updates for Windows 7 in January 2020. Some customers will upgrade their computers existing to Windows 10, which came out in 2015. although many will buy new Windows 10 PCs.
Beyond Windows, support for the Office 2010 productivity app collection expires in October 2020.
Organizations need to update their latest products to get better security and a lower total cost of ownership, Koenigsbauer said.
The Microsoft Office 365 base package, called E5, costs $ 35 per user per month. It comes with tools such as Cloud App Security, which help IT administrators to monitor and control the use of cloud services for all people within organizations.
In general, Microsoft wants people to start paying regularly with their subscriptions, said Josh Trupin, vice president of research at Directions on Microsoft, during an interview.
"The plan is clearly that they will want to push Microsoft 365," said Trupin. Microsoft does not list the cost of Microsoft 365 Enterprise on its website.
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