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Will Microsoft Subsidize Tablet and Ultrabook Costs with Subscriptions to SkyDrive and More? *Update*

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17As consumers are becoming less and less enchanted with their wireless carriers we are now hearing that Microsoft is trying to take a leaf from their book of tricks. With a wireless provider the way to get people in the door is to offer great phones (like the iPhone, Google Nexus, Galaxy III Etc) for amazing prices, but then to require a two year commitment for service. This is exactly what Microsoft might be doing with the next round or XboX hardware.

We have told you more times than we can count that Microsoft is working exceptionally hard to push their cloud services. We are seeing proof of this with Windows 8 and now are seeing them reorganize even the naming convention for their Azure platform. The combination of the two brings me back to a conversation that I had while waiting for the nVidia press event at CES. I was speaking with two other people in the line and we had touched on the cloud and its potential for profit and also disaster. One of the comments was poking fun at Microsoft’s Azure platform and how it was not doing as well as it could be (there was even a comment about the “trucks” that Microsoft was bringing out). Thinking about this conversation and the new push for Microsoft cloud based services we might have found why Microsoft actually needs to push more Windows users into their cloud services.

It is a sad fact of Microsoft’s reality; they cannot market anything that is not Windows (and even then they fail at properly marketing that). Azure needs more customers (free or paid) to support the investment. By moving their existing cloud services onto the Azure platform (which many are already there) they can use existing systems and maintain costs. So what we are going to see is not just a business model for Microsoft’s XboX hardware, but we would not be shocked at all to see Microsoft move to subsidize tablets, ultrabooks, and more with service contracts to SkyDrive, their Music and Video services and even more.

This is all speculation on our part right now as even the $99 Xbox + Subscription has not been confirmed by anyone at Microsoft just yet. We have sent off our own questions to them as well and are eagerly waiting to see what they might say in response. Until then we will continue to try and figure out what Microsoft is up to as they are certainly making some drastic changes behind the scenes and their new push for the cloud and control with Windows 8 seems very out of character for a platform that lists flexibility as one of its main selling points.

We now have confirmation of the $99 deal from Microsoft. It looks like this could be the beginning of a new business model after all...
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Last modified on Tuesday, 08 May 2012 20:28
Sean Kalinich

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