Staying On Windows 7 ESU Will Be Much More Costly Than You Might Realize

    

Today is the day — Windows 7 is officially at the end of its life. From now on, any organization still running Windows 7 has to go on extended support, called Extended Security Updates (ESU). At this point, if your organization hasn't migrated to Windows 10, you will have no choice but to go on the first year of support.

But what are the costs and risks associated with not migrating to Windows 10, especially if you use all three years of ESU? Today, I want to delve deeper into what you are looking at in terms of financial implications, security issues you might run into, competitive disadvantages you are creating for yourself, as well as the employee and manpower side of things. But before we dive into that, let's review some quick facts about the Extended Security Updates.


Windows7ESU

 

Quick Facts About Extended Security Updates (ESU)

For the next three years, Microsoft will offer limited updates for its 10-year-old Windows 7 OS for eligible licenses:

  • Extended Security Updates will be issued for critical and important updates only, the scope of which are defined by Microsoft.
  • These updates will be available for three years, payable one year at a time. However, if you wait till the second or third year to start, you will have to pay for the previous year(s) as it is cumulative.
  • Pricing varies based on particular license agreements. However, generally speaking, the cost is as follows:
    • Windows Pro - $50/device for the first year, then doubles to $100/device for the second year, and doubles again to $200/device for the third and final year.
    • Windows E3 - Is half the price (compared to Windows Pro) at $25/device for the first year, then doubles to $50/device and again to $100/device for the second and third years, respectively.
    • Windows E5 - These customers are free for the first year, then follow E3 pricing for the second and third years.
    • Windows Virtual Desktops are free.

For more info on the Windows 7 ESU program, please see Microsoft's FAQ.

Enterprises Remaining On Windows 7 Will Have To Pay For Costly Updates

The cost involved in upgrading is a main reason why many enterprises have not migrated yet. Securing the budget and manpower for the job has been deemed too costly and involved. Now that we have the pricing of extended support from Microsoft, we can calculate the price of not upgrading.

As we see from the cost breakdown above, the first year of extended support is by far the most economical, which, according to Microsoft, is to allow organizations the time to safely run Windows 7 while deploying Windows 10. And since ESU is paid yearly, it would be in the interest of an enterprise to finish migrating before 2021.

Let's take an example of a 20,000 seat company on an E3 plan. The first year of support would cost $500,000, the second year $1 million, and the third year $2 million. While those direct costs aren't staggering, they don't tell the whole story.

Windows 7 Opens You Up To Dangerous (And Costly) Security Vulnerabilities

As the past few years have shown, hackers almost always go after older software to find a back door to exploit. Even with the security updates your organization will be receiving, Windows 7 won't be as secure as Windows 10, not to mention any 3rd-party apps that are not being updated to work with Windows 7.

According to Security Intelligence, the average cost of a security breach in 2019 was $3.92 million, and as we have seen with Equifax, the costs can accrue to over $1 billion. Statistically, the chance of a breach occurring is high, and according to CIO, 60% of digital businesses in 2020 will have major service interruptions due to cyber-attacks.

Another disturbing statistic from Cybint is that most companies take six (6) months to know that a breach has even occurred. There is also the reputation loss that comes with a breach. A Centrify study says 65% of data breach victims lose trust in the company.

As stated earlier, the updates that will be included are those that Microsoft determines to be critical or important — and they might not match what your what your company deems important.

Windows 7 Puts You At A Competitive Disadvantage

Enterprises still on Windows 7 have so far missed out on over four (4) years' worth of Windows 10 features, and will continue to miss out as no new features will be added to Windows 7 during the ESU lifecycle stage.

One of the biggest advantages Windows 10 has over Windows 7 is speed. From startup time to use of apps, Windows 10 is exponentially faster than Windows 7. Employee productivity time adds up quickly from the moment they start up their device, especially if your company has a policy of shutting down devices nightly or weekly.

Besides speed, Windows 10 also has Cortana, Microsoft's voice assistant, so users can search for what they need on their device using their voice. Even for users that don't utilize talking to Cortana, searching for and finding what you need is a faster and far superior task on Windows 10.

Another factor is app compatibility. While some older apps might work better on Windows 7, newer apps like Office 2019, the latest on-premise version of Office, will either not work at all on Windows 7 or are far superior on Windows 10.

Even if some older apps currently work better on Windows 7, its market share (out of all Windows operating systems) continues to decline, going from 35.05% in January 2019 to 26.79% in December 2019. During that same time, the market share for Windows 10 went from 53.18% to 65.4%. With support ending this month, those trends are expected to continue at an accelerated pace.

For a full list of what's new in each version of Windows 10, please see this Microsoft resource.

Poor End User Technology Experience Results In Plummeting Employee Engagement & Productivity

The morale and engagement of employees can also significantly affect productivity and a company's bottom line. While there are many factors that affect morale and engagement, coming to work on a PC that is running a significantly older OS, is slower, and doesn't have the same features, interface, etc. as your home PC is definitely a negative one.

In an effort to get 1 billion devices on Windows 10, which Microsoft aimed to accomplish initially within 3 years of launch, Microsoft offered upgrades from Windows 7 or 8.1 to Windows 10 for free. Even though that offer ended years ago, consumers have been able (and still are) to take advantage of free upgrades, per this ZDNet article. So, chances are your employees have Windows 10 at home if they are running Windows.

Higher employee engagement leads to better employee retention. Although employee turnover costs $11 billion annually, companies with engaged employees see increased productivity and 2.5x more in revenue.

You Will Face Contractor/Manpower Issues Soon

Due to a new law coming into effect in the UK in April 2020, IR35, hiring contractors to carry out a Windows 10 migration will become more costly. Simply put, the aim of IR35 is to have contractors that work through an intermediary, like a limited company, either become employees of their client(s), or pay more tax, which could easily be as much as 25%.

This change will force a lot of contractors to give up their practice and take employment with big vendors, or leave the UK to start a company in another country with more favorable tax laws.

This affects enterprises in several ways:

  • There will be less competition, for the reasons stated above, which raises prices.
  • The overall workforce will be smaller, which will force enterprises to:
    • Hire internally and train employees for migration
    • Wait until there is availability in the workforce, which could be after extended support is over, leaving tens of thousands of devices vulnerable
  • Hiring from a big vendor has always been more costly than hiring contractors: £2,000/day vs. £800/day.

California has also passed and enacted legislation making the requirements to be a contractor more stringent, and more U.S. states are sure to follow.

Conclusion

While $25-$200/device might seem to be within budget while waiting to migrate to Windows 10, there are other factors which could end up costing your organization much more. Whether it is a loss of productivity, a security breach, or not being able to even upgrade, these issues will only increase the farther we go into the 3 years of Windows 7 extended support. In our experience, it is not a risk worth taking.

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