Microsoft releases new license terms for Windows 10: Biggest surprise? No gotchas

Sorry, conspiracy theorists: The new documents are simple and straightforward, with absolutely no gotchas.
Written by Ed Bott, Senior Contributing Editor

You can put your tinfoil hats away now.

Two weeks ahead of the global launch of Windows 10, Microsoft has finalized the terms of its license agreements for the new operating system. I've had several days to study the documents in detail, and I can report that there are no surprises, no gotchas, and no hidden subscription traps waiting to be sprung in two or three or four years.

Sorry to disappoint you, conspiracy theorists.

Microsoft has consistently said that its new "Windows as a service" model doesn't change the basic licensing terms for Windows. Based on these documents, that's still true.


In fact, the new license agreement is simpler and written more clearly than any similar document I've reviewed in 20 years of examining Windows license agreements. There are a few noteworthy changes, which I'll outline in this post, but every one of those changes has previously been disclosed.

Like I said: No surprises.

Instead of publishing separate agreements for each edition (Home and Pro) and each distribution channel (OEM and retail), the Windows 10 license agreement is a single document that applies to all editions, with the only changes being variations in the "Limited Warranty" section at the end of the document.

Here's what's new:

  • Activation and licensing status when upgrading from a non-genuine copy of Windows. As usual, the license agreement allows the right to install and run Windows on a single licensed device. It also requires activation, a process that is automatic on most devices from large OEMs. The new agreement adds this clause: "Updating or upgrading from non-genuine software with software from Microsoft or authorized sources does not make your original version or the updated/upgraded version genuine, and in that situation, you do not have a license to use the software."

  • Transfer rights. I heard some observers speculate that the new terms would limit Windows 10 transfer rights. Nope. The new license agreement preserves the longstanding transfer rights: OEM copies are locked to the device on which they're sold, retail copies can be transferred to a different device as long as the old copy is removed first. (The Windows 10 EULA includes a specific exception for PC buyers in Germany, who are allowed to transfer OEM software thanks to a court ruling.)

  • Downgrade rights. As with all recent Windows releases, buying a PC with a Professional version of Windows installed by the OEM includes the right to downgrade to either of the two earlier versions, in this case Windows 7 Professional or Windows 8.1 Pro. The new agreement specifies an end date for those downgrade rights, which are valid "only for so long as Microsoft provides support for that earlier version." Under the 10-year Microsoft support lifecycle , that means downgrade rights for Windows 7 end in January 2020, and the clock runs out on Windows 8.1 in January 2023.

  • Automatic updates. For consumers and small business, Windows 10 delivers automatic updates, with no option to selectively delay or reject individual updates. "The software periodically checks for system and app updates, and downloads and installs them for you. ... By accepting this agreement, you agree to receive these types of automatic updates without any additional notice." Business customers have additional management options through the Windows Update for Business program, and enterprise customers can assign mission-critical devices to the Long Term Servicing Branch, which includes only security fixes and not feature updates.

  • No Commercial Use Rights for Office products. Some Windows 10 editions will include Microsoft Office programs. As with Windows RT, those products are limited to personal and noncommercial use. Businesses need to have an Office 365 Business subscription or assign a perpetual Office license to the device.

And that's it.

Surprised? You shouldn't be. As Windows boss Terry Myerson has stated repeatedly, the company's "Windows as a service" model represents a new way of delivering updates and upgrades, but it doesn't change the fundamentals of how Windows licensing works.

The release of the new EULA terms still leaves a few loose ends to be tied up in the next two weeks. Microsoft still has to update its product lifecycle for Windows 10. That will be an interesting challenge, because the traditional 10-year support lifecycle is inconsistent with the entire idea of "Windows as a service."

One thing I am certain you won't see is a demand from Microsoft that Windows 10 users begin paying for updates after a few years. The idea that Microsoft is giving away a billion copies of Windows 10 in the world's largest bait-and-switch operation is laughable on its face. But that's a topic for another day.

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