Preston Gralla

Leaker claims that free cloud-based Windows is headed our way

April 22, 2014 2:06 PM EDT

Microsoft is at work on a free, cloud-based version of Windows called Windows Cloud that requires an Internet connection for full functionality, and whose full features beyond base ones would only be unlocked if you paid for a subscription. So claims a Russian leaker who has often been right before. Is he right again, or is this just a false rumor?

The leaker is Wzor, who has had a number of scoops before, notably a leaked, early version of the Windows 8.1 update. PC World reports that Wzor claims Microsoft is developing something called the Windows Cloud. Part of Windows Cloud would be stored locally, possibly on a machine's BIOS, and the rest would be downloaded from the Internet. WinBeta claims that when not connected to the Internet, it would offer only very basic functionality, in the same way that Windows 7 Starter only offers very basic features unless someone upgrades to a full version. Mary Jo Foley adds that Wzor claims that a subscription would be required to unlock all of Windows' features.

At this point, of course, this is just a rumor, and a tentative one at that. Wzor says that this free version of Windows won't be available until Windows 10.

Wzor also leaked a document in March that hinted that a free or very low-cost version of Windows 8 could be in the offing, in which revenue would come to Microsoft via use of Bing being the default search engine on the machines. PC World says the documents read:

"Windows 8.1 with Bing helps OEMs add Windows to low-cost devices while driving end user usage of Microsoft Services such as Bing and OneDrive. This edition of Windows sets Bing as the default search engine within Internet Explorer."

There's no way to know the truth of any of this. But a free, basic, cloud-based version of Windows for everyone, with full functionality unlocked via a subscription fee, would not be a surprise. Microsoft has shown a surprising willingness to experiment in recent months, giving Windows and Windows Phone away for free to makers of under-9-inch devices, allowing Nokia to build Android phones, and letting manufacturers in India build dual-boot Windows Phone-Android handsets. All that would have been unthinkable just months ago.

A free, base version of Windows unlocked via a subscription fee makes a great deal of sense for Microsoft. It would allow PC makers to produce cheaper PCs, because they wouldn't have to pay a licensing fee to Microsoft. It would give Microsoft recurring revenue from those who decided to subscribe to Windows. There would be fewer problems like the company has with XP, in which people simply don't upgrade to newer Windows versions, because people would pay for Windows annually, and automatically be upgraded. And even when people don't pay for subscriptions, Microsoft would get revenue from Bing and other Microsoft services.

I don't expect this to happen any time soon. And I don't think Microsoft will give away the full version of Windows on devices larger than nine inches. But a free base version of Windows could well be in Microsoft's future.