Win10 becomes a "service" and Microsoft's revenue model will change

IT Home News June 29 news, along with the official release of Win10 on July 29 this year, Microsoft will also change the way it reports revenue to shareholders. A detailed PPT presentation published by Microsoft recently elaborated on the details.

in this PPT document, Microsoft said: "Because Windows will no longer charge a fee each time a major upgrade after Win10, and will continue to provide updates, so we will change the pattern of revenue recognition, and ultimately result in deferred income". This reflects Microsoft's strategy to move toward Windows as a Service (WaS).
After Win10 is listed, deferred revenue will be included in the "Business and Others" section of Microsoft's quarterly results.

Microsoft also said, "Windows software licensing business models and consumer buying patterns will not change." This means that Microsoft will still adopt a pre-charge method and generate deferred revenue for a long time thereafter.
This shift has only affected the company's shareholders, indicating that traditional software buying and selling methods are outdated, and Microsoft is turning to another new software business model. Win10 will also be a major turning point for Microsoft to turn Windows into a service rather than a one-time sale. (via: Neowin)
Related terms:
Deferred income: refers to the income or income still to be confirmed, it can also be said that it is temporarily unrecognized income, it is the application of accrual system in the confirmation of income . Compared with international accounting standards, in China's accounting standards and "Enterprise Accounting System", the scope of deferred income application is very limited, mainly reflected in the relevant content of the leasing standard and income standard.
Revenue recognition: refers to the time when income is recorded. The confirmation of income should solve two problems: one is timing; the other is measurement. Timing refers to when the income is recorded in the books, such as whether the sales of goods (or long-term projects) are in pre-sale, in-sale, or post-sales revenue; the measurement refers to the amount of registration, whether it is based on the total amount or on a net basis. Law, labor income is based on the percentage of completion method, or according to the completion of the contract law. (From wiki.mbalib.com)