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Microsoft to provide free upgrades to Windows 10 for 2 to 4 years

Gregg Keizer | July 9, 2015
Microsoft has quietly revealed more information about how long it will provide updates for Windows 10, saying in a PowerPoint presentation that free refreshes will last between two and four years.

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Microsoft has quietly revealed more information about how long it will provide updates for Windows 10, saying in a PowerPoint presentation that free refreshes will last between two and four years.

The Redmond, Wash. company revealed the timeline in a slide deck (download here) it posted on its investors website June 26. The presentation offered up additional information about Microsoft's planned revenue deferrals for Windows 10, which the company first talked about in May.

"Revenue allocated is deferred and recognized on a straight-line basis over the estimated period the software upgrades are expected to be provided by estimated device life," the most pertinent slide stated. "[The estimated device life] can range from two to four years."

Microsoft will determine the device lifetime -- and thus the support stretch -- by "customer type."

Although details remain skimpy on the upgrade lifetimes Microsoft plans for Windows 10, the two-to-four-year span was the first time the firm named their lengths.

Microsoft has repeatedly said that the free updates and upgrades for Windows 10 would be tied to what it has called the "supported lifetime of the device." It debuted that phrase in January, when it announced Windows 10's name and a free upgrade for consumers and some businesses from Windows 7 or Windows 8.1 for one year following the new OS's official release.

The free post-launch updates and upgrades, which will include new features and changes to the user interface (UI), are key to Microsoft's strategy to transform the operating system into a service.

"With the launch of Windows 10, Microsoft will provide new features and functionality over time," another slide in the short PowerPoint presentation said. "We will continue to keep it current for the supported lifetime of the device. We think of Windows as a Service -- continuous updates over time."

For accounting purposes, free upgrades require a company to set aside some revenue from the sale of the affected software -- in this case, Windows 10 -- then recognize that revenue over time. All the revenue from the software sale is eventually recorded, but at staggered intervals.

"We will have a new revenue recognition model because Windows 10 will include software updates provided over time, rather than at specifically-priced software upgrade events, which will result in the deferral of revenue," Microsoft said.

In the slide deck, Microsoft said that the support lifetime would be calculated "primarily ... by customer type," different language than it used in May, when it said support would be determined by "form factor," a way of saying the kind of device.

Customer type, on the other hand, hints at separating consumer and business device owners. Microsoft may use the edition of Windows 10 running on the device to make that determination. If that's the case, free upgrades for Windows 10 Home, say, could be different -- delivered for a shorter stretch, perhaps -- than for Windows 10 Pro, the more expensive SKU (stock-keeping unit) aimed at power users, small businesses and corporations.

 

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