Ahead of the release of Windows 11 (opens in new tab) next month, Microsoft's operating system is no longer the company's biggest money maker as its cloud computing (opens in new tab) business has overtaken Windows in recent years.
As reported (opens in new tab) by Business Insider, CEO Satya Nadella has spent his seven years at the company focused on expanding Microsoft Azure (opens in new tab). In fact, in January of last year Nadella joked that he may begin referring to the company's operating system as "Azure Edge" since Windows has become an extension of its cloud computing service.
The launch of Windows 11 follows last year's pandemic-fueled PC boom (opens in new tab) and comes at a time when chip shortages have made it difficult for consumers to procure new devices. Thankfully, Microsoft has an answer to this in the form of its new Windows 365 (opens in new tab) PC-as-a-service offering that allows users to stream a Windows desktop to any of their devices wherever they are.
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As the company's cloud revenues have grown, Windows is now part of its “More Personal Computing” revenue segment which also includes Xbox, Surface hardware and Bing search advertising.
An on-ramp for Azure
In the past Microsoft required users to pay to upgrade to the latest version of its operating system but this all changed with the release of Windows 10 (opens in new tab) back in 2015. Just like Apple, the company allowed users to upgrade for free and this will also be the case with the release of Windows 11 next month.
While users no longer have to pay for Windows upgrades, Microsoft's operating system still provides a great deal of value for the company as developers are more likely to write software for it due to its large user base. One of the reasons Azure has been able to begin catching up with AWS (opens in new tab) in the cloud computing space is due to its large install base with Windows as well as with Microsoft 365 (opens in new tab).
With Windows 11, Microsoft plans to cater to developers even more with better window management through its Snap Layouts (opens in new tab) that allow power users to quickly open several applications to pre-set positions on their screens. At the same time though, the company is also changing its Windows app store to give developers a bigger cut of the revenue from their apps.
The release of Windows 11 will give existing users a reason to continue using Microsoft's operating system but it will also help Azure grow especially as more people turn to OneDrive (opens in new tab) to store their files in the cloud.
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Via Business Insider (opens in new tab)