Think of Windows 10 S as the S-Edition of Windows 10 Pro. Meaning, it is Windows 10 Pro, but locked down. So it is a specific secured configuration. When in S mode, it will only run applications that come from the Microsoft Store or are preinstalled. So it won’t run a lot of applications, including Visual Studio, most Adobe applications, Google Chrome, many printer driver applications (although many printers will work, potentially with limited functionality), etc., until they are available in the Microsoft Store.
Windows 10 S can be unlocked and become a regularly functioning Windows 10 Pro through the Windows Store. If a fee is required ($49 for Windows Pro), it is managed and collected with the Windows Store (or Microsoft Store for Education, which allows Windows S to be unlocked to Windows 10 Pro Edition for Education customers). A valid Windows 10 Pro product key also works. Once you switch to Windows 10 Pro, you cannot switch back to Windows 10 S.
The S mode is available for Windows 10 Enterprise and will be available for Windows 10 Home in the future. So why use this S mode? It will be less expensive, perhaps to compete with Google OS devices. It will be more secure. It will be more strict in that applications can’t just throw in startup applications that run in the background. These consume battery, decrease reliability, and consume resources (CPU, RAM, etc.).
While S mode doesn’t allow joining Windows Active Directory, it does support Windows Azure Directory joining. BitLocker is available as long as the underlying Windows 10 OS supports it (such as Pro, Enterprise).
This edition might drive developers towards PWA (Progressive Web Apps) or UWP, although it is unlikely. Windows 2016 Server doesn’t support UWP (for running or developing). While still much better than Windows RT, Windows 10 S hasn’t really taken off. Low cost educational devices are not yet available. It is ahead of its time in being overly aggressive in not supporting key non-store applications (e.g. Google Chrome), and there isn’t any development strategy in place that is obvious (inside of Microsoft or with partners/vendors/enterprises). Many printer drivers with add-on utility programs simply won’t work and cannot be installed.
However, users who can take advantage of Windows 10 S, such as those that can find their apps in the Windows Store or use a web browser (well, really only Edge) to access their information, can benefit from additional security, less startup applications (no Windows Services, no scheduled tasks, no applications in the startup folder, etc.) which will speed up the experience and reduce CPU/RAM drag, and increase potentially battery life (presuming you aren’t just watching videos all day).
How does this compare to the iPad? One could draw a lot of parallels with a reduced operating system (iOS versus MacOS and Windows 10 S versions Windows 10 Pro). But it really depends how you use your devices. Many could use either device if all they need is email, browser, Skype, Netflix, and so forth. The Apple Store has a lot more applications, And higher quality. The browser experience may be mixed with mobile Safari versus Edge. Windows 10 S has a mouse. Windows 10 S can be changed to Windows 10 Pro and “unlocked” for the full Windows experience. Windows 10 S has a much better Microsoft Office application experience.
In the end, time will tell and choice is good. Microsoft is ahead of the game with Windows 10 S. With Progressive Web Apps on the horizon, the potential for improved Microsoft Store apps, and a locked down system that feels more agile, there is a lot of possibilities to benefit users.