The roaring success of Windows 365

Microsoft announced Windows 365, its "Windows as a Service" offering that lets one (if one is a business) create and use virtual Windows desktops. And just as quickly, Microsoft announced that it was suspending new accounts, because too many had signed up for the service.

A few thoughts:

First (and obvious) is that Microsoft underestimated the demand for Windows 365. Microsoft hosts the service on its Azure framework, and if the demand for Windows 365 outstrips the available servers, then it is popular indeed.

Second, (and perhaps less obvious) is that Microsoft is (probably) kicking themselves for pricing the service as they did. With strong demand, Microsoft apparently "left money on the table" and could have charged higher rates.

Third, (and also not so obvious) is that Microsoft's business customers (that is, most businesses) really want to move from their current arrangement for PC hardware to a different one. They either want to move to Windows 365 or they want to try it -- which indicates that they are not happy with their current PC platform. (That current platform might be physical, real-world PCs on employee desks, or it might be virtual PCs accessed by Remote Desktop or Citrix or some other mechanism.)

The desire for customers to try a different solution is, in my mind, a warning for Microsoft. It means that customers are not happy with the current state of Windows and its support -- new versions, upgrades, security patches, and administration. It could mean that customers will entertain other solutions, including Linux and Apple.

A few other thoughts:

With demand from the business community much stronger than expected, Microsoft will probably focus on business customers. In other words, I expect Microsoft to offer no comparable service for individuals or families -- at least not for the next two years. I expect the cost for a consumer product is higher than the cost for a commercial product, and the revenue for a consumer product is lower than the revenue for a business product.

Microsoft may leverage demand for the Windows 365 service to spur Windows 11 sales. They have announced Windows 365 with access from various devices, and the opportunity is to provide additional services for Windows 11 clients. (Better security, better integration between access computer and virtual desktop, and possibly lower costs.)

Finally, there is the outside chance that Microsoft will provide a special edition of Windows 11, one that is stripped down and usable only to access Windows 365. (Much like ChromeOS is suitable only to run Chrome.) Microsoft may even design and sell hardware to support a Windows 11 "C" mode ("C" for "Connectivity"?).

The strong demand for Windows 365 shows that lots of people are interested in it. Microsoft won't ignore that. Be prepared for more announcements for this new service.