Windows Cloud subscription

Microsoft’s $68.7 billion acquisition of Activision Blizzard may be slipping away. Microsoft is in federal court, squaring off against the Federal Trade Commission (FTC), which has asked a judge to block the deal. Microsoft has had to produce numerous documents in the case, including one that reveals potential plans for Windows, and it’s all about the cloud (and subscription revenue).

One of the FTC’s exhibits in the case contains a slide from an internal Microsoft presentation titled “Modern Life Strategies and Priorities,” which was spotted by The Verge. The deck appears to explore growth opportunities for the decades-old technology heavyweight. The short-term goals aren’t surprising. It’s all about more Windows 11 PC sales and getting people to sign up for Microsoft 365. For the long term, the slide says Microsoft is focused on making custom silicon for Surface, exploring partnerships and acquisitions (hence the FTC lawsuit), and moving Windows 11 to the cloud.

The cloud bullet point makes mention of the relatively new Windows 365, which allows subscribers to access a cloud-based virtual PC on almost any device. Microsoft says it wants to “build on Windows 365” to create a full Windows operating system in the cloud. This would allow people to access their preferred computing environment anywhere, but it would rely on Microsoft’s servers and a potent internet connection.

Naturally, an always-available cloud PC would cost money, and that’s what Microsoft is after. We’ve already seen Office morph into Microsoft 365, a service for which people pay $7-10 monthly to access Word, Excel, and the rest of the iconic productivity suite. Don’t expect such modest pricing for the proposed OS in the cloud, though. Microsoft’s Windows 365 pricing starts at $30 monthly for a basic machine with two CPU cores and 4GB of RAM. More usable machines are priced up to $66 per month.

It will be a tough uphill climb for Microsoft to get the average customer to rely on the cloud for all their computing needs. We know from cloud gaming that it’s possible to stream content with not too much lag, but it’s still only as reliable as your internet connection. Anyone who’s tried to stream Netflix at peak times knows even the fastest connections can falter. Will people even pay for a virtual Windows desktop when they’re used to just getting Windows bundled with PCs? As far as most Windows users are concerned, the operating system was free.