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It wasn't too long ago that if you were building or upgrading a PC,

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you had to fork over some handsome cash for a copy of Windows.

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If you didn't, you either couldn't get a legal copy at all,

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or your operating system would simply stop working after 30 days.

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But today, Microsoft lets people use it completely for free.

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Even though they officially ended their program to let people with legal copies of

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Windows 7 or 8 upgrade to Windows 10 for free, many users have reported the free upgrade still works.

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And on top of that, even if you just download Windows 10 from Microsoft's website,

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and you don't pay for a key, the OS will still work just fine.

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I mean, sure, you get that annoying activate Windows watermark,

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you can't change the system color scheme, and it's a little trickier to pick your wallpaper,

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but other than that, you get the same features as you would had you paid all that money.

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And there's still even a loophole that allows you to upgrade

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pirated versions of Windows 8 to Windows 10.

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So why is Microsoft suddenly giving out one of the most popular products like candy?

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Well, it definitely isn't out of the goodness of their hearts.

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You see, historically speaking, people were often rather slow to upgrade to new editions of Windows.

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There were exceptions, such as the long lines we saw when Windows 95 was first released,

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and the hype around Windows XP. But for much of the 2000s, people simply put off expensive upgrades.

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No wonder then that Microsoft decided it was much more important to get people

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onto Windows 10 rather than squeezing every dollar they could out of them up front,

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especially as Microsoft views Windows 10 as its last version of Windows,

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and plans to update it regularly instead of releasing an entirely new edition every year or two.

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Okay, but then how is Microsoft making money off of Windows then?

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Well, although it is giving out tons of free software,

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far more people are using computers today than they did when Windows 95 was taking over the world.

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So Microsoft is kind of monetizing in a similar way to game developers who use a free-to-play model.

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Think about it, Microsoft heavily pushes apps from the virtual Microsoft Store,

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accessible from the Windows desktop, where similar to the Google Play Store and the Apple App Store,

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Microsoft gets a cut of every app purchase made.

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Additionally, Microsoft is trying to get people into their whole ecosystem,

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rather than just having them use the OS. For example, let's say you're using Windows 10 for your desktop PC,

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and you decide to leverage Microsoft's built-in OneDrive cloud storage solution.

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Although you get a certain amount of storage for free, Microsoft tries to sell users more.

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So then when it's time for you to buy a tablet, for example,

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the idea is that you'd be more likely to buy a Microsoft Surface and use OneDrive seamlessly

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on it rather than choose, say, an iPad. There are other subtle ways that Microsoft keeps the cash coming in too.

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If you search with a search bar near the bottom of your screen, it uses Microsoft's Bing search engine, which helps bolster its market share

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and make it more appealing to advertisers. And Microsoft also serves ads inside of Windows 10,

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especially for its own products such as Office 365 subscriptions

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if you need more functionality than what the free Office apps provide.

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And Microsoft still does make money from selling licenses, of course.

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OEMs that make pre-built computers and larger organizations

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that want to deploy Windows on many computers, they still pay for copies.

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And of course, home PC builders are still shelling out money too

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to get rid of that annoying watermark. But overall, it looks like this freemium Windows model is here to stay.

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I just hope clippy-themed loot boxes don't become a thing.

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So thanks for watching, guys. If you liked this video, be sure to subscribe, give us a thumbs up,

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and hit us up in the comments section with your own suggestions for videos that we should cover in the future.