Windows 10 Free Upgrade – What happens to Windows 7/8

(I Am Not A Lawyer. This is my interpretation of the EULAs Microsoft have released on their website, and may not be legally sound. Additionally, the online EULA I reference may not match the specific terms you agree to; please read the licence terms included with your copy.)

Note: this answer applies for Windows 8 only. Windows 8.1 and newer got rid of the Personal Use Licence and moved back to a full retail channel.

Ok, let's clarify things. Hopefully for the last time.

There are two licences:

• Upgrade

  You must have a preexisting XP/Vista/7 licence/installation.

• System Builder

  Can be installed on a clean computer. Split into OEM and Personal Use.

There are additional licences distributed by large OEMs that have their own contracts with Microsoft, such as Dell, HP, Lenovo, etc.. Those remain more or less the same and will not be covered by this answer. As long as you buy the licence/disk separate from the computer, it is under Personal Use, not OEM.

Traditionally, there was a System Builder licence used by OEMs (typically smaller shops, since large manufacturers tend to have their own contracts). And then there was a full retail licence used by home users. What has been reported is that the removal of the retail licence, 'forcing' users to use the OEM licence with all its restrictions. This is incorrect.

Yes, the traditional 'retail licence' has been removed. Yes, home users must now buy a System Builder licence. No, that is not an OEM licence (practically speaking). Home users who purchase a copy of Windows 8 separate from their computer fall under the Personal Use section of the System Builder licence, which is more or less the same as the traditional 'retail' licence. It just got renamed and consolidated with the OEM licence into one package/price. You still have the same right to support from Microsoft and right to transfer the licence you would have had on the traditional retail licence.¹

Now, to address the misconception that the System Builder licence is an OEM licence. For all intents and purposes, it is not. For previous versions of Windows, yes, but not for Windows 8.

Now, firstly, if you were to look at the System Builder licence you would find it here. That is the OEM licensing page. Disconcerting, yes?

However, if you actually read the licence, it states:

If you are not a system builder and are installing this product for personal use, refer to www.windows.com/personaluselicense for terms that apply to you

So, the OEM part of the licence only applies to OEMs! What a surprise!

Now, on to the personal use licence. This is the equivalent of the traditional retail licence, both in terms and in spirit. There are several parts that were part of Windows 7's retail licence, but not OEM, that are in here:

• You can install it in a virtual machine

  Under our license, we grant you the right to install and run that one copy on one computer (the licensed computer) as the operating system on a computer that you build for your personal use, or as an additional operating system running on a local virtual machine or a separate partition, subject to the restrictions outlined under “Are there things I’m not allowed to do with the software?”

• You can transfer the licence to another machine

  Can I transfer the software to another computer or user?

  You may transfer the software to another computer that belongs to you. You may also transfer the software (together with the license) to a computer owned by someone else if a) you are the first licensed user of the software and b) the new user agrees to the terms of this agreement. To make that transfer, you must transfer the original media, the certificate of authenticity, the product key and the proof of purchase directly to that other person, without retaining any copies of the software. You may use the backup copy we allow you to make or the media that the software came on to transfer the software. Anytime you transfer the software to a new computer, you must remove the software from the prior computer. You may not transfer the software to share licenses between computers. You may transfer Get Genuine Windows software, Pro Pack or Media Center Pack software only together with the licensed computer.

• Microsoft will provide support¹

  Microsoft provides limited support services for properly licensed software as described at support.microsoft.com/common/international.aspx.

  This is in contrast to the OEM licence, which states that the builder must support the end user.

Let me reiterate. The Personal Use licence is practically the same as the traditional retail licence. It is not an OEM licence.

¹(Note: the support is described as 'limited' in the EULA, and apparently there is a message on the box saying there is no support. See the comments under this answer for further details.)

What edition of Windows will I get as part of this free upgrade?

Some editions are excluded: Windows 7 Enterprise, Windows 8/8.1 Enterprise, and Windows RT/RT 8.1. Active Software Assurance customers in volume licensing have the benefit to upgrade to Windows 10 enterprise offerings outside of this offer.

What about Windows RT?

If you’re running Windows RT, your device won’t upgrade to Windows 10, but we will have an update for you around the time of Windows 10 release.

Can Enterprise customers get the free Windows 10 upgrade?

Enterprise customers with active Software Assurance subscription in volume licensing have the benefit to upgrade to Windows 10 enterprise offerings outside of this offer.

More in Specifications.

These are for a pre-released version of Windows 10 and are subject to change.