Wednesday, October 23, 2013

The implication of free OS X Mavericks and iWork


Today’s Apple event marked another subtle and potentially disruptive poke at Microsoft and it’s core business – Windows and Office. For the first time, Apple gave their next gen OS away as a free upgrade to existing Mac owners. Free. In the past, incremental operating system upgrade cost a minimum fee, around $29. With Mavericks, not only did they change the naming of their flagship OS, moving away from the cats family to popular locations in California, they are also giving it out free.

When Windows 8 was released, Microsoft also provide an upgrade pricing of $40 to existing Windows 7 users but for a limited time. This move was how Redmond reacted to OS X Lion and Mountain Lion's incremental upgrade. But it was limited and now MS is selling Windows 8 Pro Upgrade for $88 and a Windows 8 Pro full version for $189 - and there is also Ultimate, Home, Home Premium and a whole lot of confusing versions. 

Why would Apple release Mavericks as free? 

I believe they learned from their experience in iOS. Every iOS operating system upgrade for the iPhone, iPad and iPod was free. And the rate of conversion from their customers to new OS was remarkable. This rate of adoption made it easy for Apple and its ecosystem of developers to support their customers effectively. In addition, giving away free iOS did not cause them to lose any business but instead it helped moved the millions of devices and customers to a technology platform and direction that is mapped by Apple. I know Microsoft had wished all of their consumer and enterprise customers adopted Windows 8 as fast as they could have liked. Does anyone still remember the struggle MS went through to move people out of Windows XP? Their customers refused to do so and MS is forced to extend their support for Windows XP customers until recently, they finally end of life this product due to the maturity of Windows 7. There is an advantage to have all your installed base on the same level of OS instead of being stuck in a fragmented and disparate environment.

OS X Mavericks has 200+ new features, some of them pretty exciting to me: Finder tabs, filename tags, new Safari that only renders graphics when it is visible to users, thus saving huge amount of battery, iCloud keychain for password management and a host of others. There are also a huge number of apps included from the new iBooks to Maps for Mac, to the usual Notes, Reminders, Calendar, Mails, Contacts, iMessage, Facetime, Phonebooth, etc. The iLife suite, which consist of a photo management software iPhoto, home movie making software iMovie and music composition software Garage Band, is also free.

There are a lot of R&D money pumped into this and it attest to the power of free for Apple to give it away. In one single stroke of ingenuity (well, they have done it in iOS, so it is not exactly original), Apple has elevated itself way past Microsoft in desktop operating system and is now at the playing field of Google.

Giving away iWork, their productivity suite of word processing, spreadsheet and presentation to new Mac and iPhone users is the final nail to MS Office coffin and is now competing with Google Docs. It sucked to be in MS shoes now. No wonder Ballmer left so quickly! 

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