Microsoft, Looking for the Money

Microsoft reveals how it will make money giving away software:

Microsoft’s traditional revenue has primarily come from licensing software like Windows and Office to OEMs and businesses. Microsoft grew into the giant it is today thanks to this hugely successful strategy and a dominance of the PC market. With mobile altering the landscape, Microsoft is turning to new strategies for the future of its entire business. Speaking at Microsoft’s Convergence conference today, Chris Caposella, who is in charge of marketing at the software giant, revealed Microsoft’s freemium plans in full.

It involves four parts: acquire, engage, enlist, and monetize. Acquire is Microsoft’s way of getting people to use a product for free, like Office for iPad. Engage is Microsoft’s plan to get them hooked on the product and leverage other parts of its ecosystem to keep someone using the service. Enlist is simply finding fans to keep the circle going, and then monetizing is figuring out who will pay for subscription versions of the service they’re hooked on. It sounds simple, but it’s something Microsoft hasn’t traditionally succeeded at. Google has thrived at offering free services in return for your data or ads, but Microsoft’s approach assumes people are willing to spend money on apps and services they’re addicted to.

Good luck with that strategy.

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