Deferral of Revenue and Windows 10
Forgive me if I get this wrong. But I can at least attest to having gone out and actually tried to understand what is being said here. Interestingly, this isn't the first time the term has popped up in association with Windows upgrades.
People are looking at the word deferral of revenue and thinking that it means that Microsoft will screw you over for the money at a later point in time.
That isn't actually what revenue deferral is, based on everything I've looked at. Revenue deferral talks about money that is received up front but is then not recognized (financially) until a later point in time, or in chunks over a period of time.
What I *think* is happening here is 2 things. Firstly, Microsoft will be deferring ALL revenue from Windows going forwards in even chunks based on consumer type over 2-4 years. And the other piece, that I think everybody is COMPLETELY getting wrong is that they will need to write down some potential sales in the form of free upgrades.
This is effectively negative revenue deferral, and probably the actual biggest reason for this shift in accounting approaches. If they write-off, say, $300 Million BUT they defer that over an average of three years it will only have a $100M impact each year. In other words, it allows them to fudge the numbers a bit on a yearly basis regarding what impact free upgrades will have on their bottom line.
If they give you an upgrade for free, and then charge you after 2-3 years, that is NOT deferral of revenue. That is simply charging you later and recognizing the revenue when you receive it.
It is possible that they might somehow lock you out of future updates. It is also possible that paying more money could lift such a restriction. But you wouldn't be obliged to do so. The average user would simply remain on Windows 10 as it was at the point in time that the free upgrades stopped.
This however doesn't really fit with Microsoft's history at all. The company doesn't even stop you from running pirated versions. And they keep those copies up to date as well. And the reasons for pirated copies of Windows 10 to be on machines aren't likely to change. Meaning, many well intentioned people may have been swindled into a machine without a legitimate license. And Microsoft has time and again decided not to screw these people over. They continued to get security patches and updates. I see no reason for that to stop. And I see no reason for Microsoft to update pirated copies but not update legitimate copies that passed their devices supported lifetime.
People are looking at the word deferral of revenue and thinking that it means that Microsoft will screw you over for the money at a later point in time.
That isn't actually what revenue deferral is, based on everything I've looked at. Revenue deferral talks about money that is received up front but is then not recognized (financially) until a later point in time, or in chunks over a period of time.
What I *think* is happening here is 2 things. Firstly, Microsoft will be deferring ALL revenue from Windows going forwards in even chunks based on consumer type over 2-4 years. And the other piece, that I think everybody is COMPLETELY getting wrong is that they will need to write down some potential sales in the form of free upgrades.
This is effectively negative revenue deferral, and probably the actual biggest reason for this shift in accounting approaches. If they write-off, say, $300 Million BUT they defer that over an average of three years it will only have a $100M impact each year. In other words, it allows them to fudge the numbers a bit on a yearly basis regarding what impact free upgrades will have on their bottom line.
If they give you an upgrade for free, and then charge you after 2-3 years, that is NOT deferral of revenue. That is simply charging you later and recognizing the revenue when you receive it.
It is possible that they might somehow lock you out of future updates. It is also possible that paying more money could lift such a restriction. But you wouldn't be obliged to do so. The average user would simply remain on Windows 10 as it was at the point in time that the free upgrades stopped.
This however doesn't really fit with Microsoft's history at all. The company doesn't even stop you from running pirated versions. And they keep those copies up to date as well. And the reasons for pirated copies of Windows 10 to be on machines aren't likely to change. Meaning, many well intentioned people may have been swindled into a machine without a legitimate license. And Microsoft has time and again decided not to screw these people over. They continued to get security patches and updates. I see no reason for that to stop. And I see no reason for Microsoft to update pirated copies but not update legitimate copies that passed their devices supported lifetime.
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