Microsoft is still a money-making machine, but it has a big problem on its hands when it comes to its Windows operating system. Making money by selling software licenses simply isn’t going to work in a future where its rivals give away exactly the same kinds of products for free, and that’s forcing Microsoft to consider a new pricing model for its next OS.

That was made clear by Microsoft’s Chief Operating Officer Kevin Turner in a speech to investors at the Credit Suisse Technology Conference last week, reports GeekWire.

Microsoft grew Windows into a $20 billion-a-year business using a very simple model. It sold licenses for its OS to PC makers like Dell Inc., Hewlett-Packard Co., Lenovo Group Ltd. and Samsung, and the cost was passed on to consumers. Microsoft also cashed in when consumers bought its software directly. But in order to compete with rivals like Apple’s MacBooks and Google’s Chromebooks, Microsoft has had to cut the cost of its Windows licenses, and in some cases even give away the software.

Now, according to Turner, the firm is exploring new ways to monetize Windows, and the most likely solution will be that some kind of subscription service.

“We’ve got to monetize it differently,” said Turner. “There are additional opportunities for us to bring additional services to the product and do it in a creative way. Through the course of the summer and spring we’ll be announcing what that business model looks like.” Windows 10 is currently due to ship next fall.

In other words, Windows 10 is unlikely to be an expensive upgrade for those who are praying that it addresses numerous complaints about Windows 8. But whether or not Microsoft decides to give it away for free or extremely cheaply, it’s unlikely you’ll get very much more than a “bare-bones” operating system, with extra features available at an additional cost.

Daring Fireball’s John Gruber says it’s conceivable that Microsoft and its partners will eventually start giving away free hardware in return for a subscription to Office 365 and other services. That would be great news for consumers who only use their PCs to browse the web, but one assumes that in such a case, business users would likely end up paying more than they do now. There is considerable speculation that Microsoft will lean heavily on enterprise customers to subsidize the loss of consumer revenue.

Nothing has been confirmed at the moment, but whatever model Microsoft does come up with will likely be a huge shift from its traditional business model. It falls into line with similar changes its made recently too. For example, some businesses no longer need to buy a license for each device that access Windows via a remote server. Instead, the license is charged on a per-user basis so that users can access Windows from multiple devices.