I remember an interview with Bill Gates around 2000 (maybe even late 90s) where Gates said that the future of software was online subscription.
He even stated back then that he’s have Office run over the internet if he could.
Another example of this is how Xbox Live has been a thing since the original Xbox. Long before iOS and Android. And more recently, Xbox Live has become more than just a subscription service but a full on streaming platform.
Let’s also not forget that traditionally enterprise licenses for Windows would be billed annually. By this, I don’t mean someone purchasing Windows Server for their home lab, but actual data centre use. (I’m pretty sure this was the case, been a long long time since I’ve gone through a Microsoft audit, let alone been purchasing data center licenses, some someone do correct me if I’m misremembering here).
So I don’t think any of this is a knee jerk reaction to Apple and Google eating their market. I think it’s always been their long term strategy but it’s just taken this long for the wider industry to align.
Now with the gaming market being increasingly subscription based, other software vendors switching pricing format (eg Adobe) and the internet being far more accessible than ever, MS are in the best place they’ve ever been to press home the final missing piece: Windows Home.