Windows update to other computers on home network

Yes.

I had exactly the same issue, and eventually (Dec 1st) gave up waiting.

Mounted the ISO, ran the setup, and ensured that Keep Files and Settings was selected when given the option.

As soon as the install completed and I'd rebooted, Windows Update straightaway started offering me updates again, including the Windows Defender ones which I'd been getting every day anyway, but more to the point, the cumulative updates were also coming through.

My Win 10 install was clean on to bare metal on 29th September (so a lot more than 30 days ago), I didn't have Defer Updates selected, and I hadn't installed the update and then uninstalled it again (in fact, I don't think that's possible with 1511).

But yes, update-installing from the MSDN 1511 ISO seems to work fine, and unblocks the flow of normal Windows updates.

This feature is called Windows Update Delivery Optimization.

Michael Niehaus from Microsoft makes it clear here that there are minimum requirements that must be satisfied for it to work. Here is a brief summary:

• The host of the downloaded updates must have "at least 4GB of RAM and 32GB of disk space"
• The client receiving content from peers has requirements (still trying to determine these)
• Delivery Optimization presently will only use peer-to-peer sharing for larger updates like feature updates (new Windows 10 releases) and cumulative updates (also referred to as "quality updates" or "monthly patches" in the article).

"Those that don’t meet those requirements will download updates directly from the source (Windows Update or WSUS)."

For further understanding, he illustrates an example scenario:

So let’s assume we have a Windows 10 1511 or Windows 10 1607 PC configured to talk to WSUS, and it checks for updates. What happens? Here’s the basic flow with the default settings:

• The PC talks to WSUS to determine what updates are needed.
• For each needed update, the PC checks with the Delivery Optimization service (on the internet) to find any applicable peer PCs that already have the needed content.
• If peers are available, the PC will try to get the content from the peers.
• If some or all of the content isn’t available from a peer, or if no peers are available, the remainder will be retrieved from WSUS.

Delivery Optimization helps with apps from the Windows Store as well, doing peer-to-peer transfers for apps that are larger than 100MB.

If you have Windows 10 Fall Creators Update (version 1709) or above, you will be able to compare the amount of data your PC has downloaded via the Internet against the amount of data copied from other PCs on the network at the following Settings location: Settings > Update & Security > Windows Update > Update Settings > Advanced options > Delivery Optimisation > Activity Monitor

For example, this screenshot is from Windows 10 Home edition:

"N/A" may mean that this Windows version is not permitted to download from other devices on the network.