Gregg Keizer at Computerworld unearthed a presentation posted on the Microsoft investor's website that explains how Microsoft will account for revenue from Windows 10 sales -- and raises some troubling questions about how long a free upgrade to Windows 10 will last.
There's actually no change in how the revenue will be recognized -- Microsoft's been playing this accounting game for many years, on many products, including Office 365. What's different is a footnote on one of the slides that says, "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, which can range from two to four years."
For those of us who have been puzzling over Microsoft's statement that "we will keep [Windows 10] current for the supported lifetime of the device," that mention of "two to four years" is a real head-scratcher.
Could it be that the "supported lifetime of the device" in Microsoft's pledge is the same as the "estimated device life" in the investor's presentation? If so, a free upgrade from Windows 7 to Windows 10 that only lasts two years isn't much of a free upgrade, eh?
It's particularly frightening when you see how frequently Microsoft now refers to "Windows as a Service." The phrase "as a Service" has long been a euphemism for "rent," and potential customers are rightfully concerned that they may have to pay rent for Windows 10 after two or four years.
But wait. It gets worse.
The same financial presentation, in the same footnote, says "Estimated device lives are primarily determined by customer type." Not by device type, but by customer type. One could reasonably conclude that the Dell XPS-13 that you, as an individual, upgrade from Windows 8 to Windows 10 might only get new upgrades for two years, whereas the same XPS-13 upgraded by an enterprise could get new upgrades for four years. Which doesn't make much sense, but then Windows licensing has never made much sense.
More than that, none of the discussion talks about bug fixes and security patches. Now that Service Packs are (apparently) dead, you have to wonder how long Microsoft will continue to dole out those mandatory bug fixes and security patches for free copies of Windows 10.
Once again, the lack of communication by the powers-that-be has raised valid concerns about a topic that should've been settled months ago.