If you have anything other than a BIOS key that activates Windows 10 on one of your computers, you will want to read this. This includes Pro upgrades and/or upgrades from previous retail versions of Windows.

Windows 10’s Anniversary Update will make significant changes to how Windows Digital Entitlement Activation works. To recap, with Windows 10, people who upgrade to Windows 10 from a past version, use a retail key, or an MSDN key, now find their licenses binded to their computer via a serial number hash. This is largely based on your Ethernet/Wi-Fi MAC addresses, and possibly other serial numbers. Microsoft won’t say the exact algorithm, but it may also include motherboard and/or processor serial numbers, where available. The algorithm is flexible… permitting PC upgrades while ensuring that you can’t move OEM-upgraded licenses to other machines.

After July 29, you can’t upgrade Windows 7, 8, or 8.1 keys to Windows 10. So, you absolutely should get that done. But there’s more – read on.

So What’s Changing

First, it may be even the names (yes, again, yay)! It appears the phrase Digital Entitlement was confusing to many – or perhaps a bit too autocratic with being all entitled. So now Windows 10 Anniversary Update just refers to it as “digital license” (all lowercase). Many instances that said Digital Entitlement, now say digital license in the Fast ring preview.

Microsoft recognizes that people are concerned – and rightly so – that after July 28, the end of free upgrades to Windows 10 (from Windows 7/8/8.1), that it may become complex or impossible to reinstall a Windows 7 Professional or Windows 8/8.1 Pro key, particularly if the machine came with a Home or Home-equivalent key. This is because we users have already run into problems where Digital Entitlement doesn’t restore the right key from the cloud.

To fix this, Microsoft will now automatically pair your digital entitlements to your Microsoft Account (MSA) login.

What if I don’t use Microsoft Account to log in?

Ah, then you (may) have a problem. Microsoft won’t pair your Digital Entitlements with your Microsoft accounts, and a key could be lost.

This is most important if you have a PC with a retail or MSDN key. For example, you have a laptop that came with Windows 8 Home. You then applied Windows 8 Pro, and then upgraded that to Windows 10 Pro.

Without linking to a Microsoft Account, at least temporarily… it’s possible the machine when restored could lack the Windows 10 Pro license. It may restore back to Windows 10 Home, particularly if you upgraded to Windows 10 Home, then reinstalled Windows 8 – upgraded to Pro – and upgraded that to Windows 10 Pro on the same machine.

The web tool – as Microsoft has described it – will let you decide which key should be restored if a machine has multiple digital licenses associated with it.

I don’t want to use Microsoft Account to log in to my PC, what should I do?

To fix this you should temporarily sign in to your PC with your Microsoft Account, confirm that the Digital Entitlement has been paired with your PC, and then remove the Microsoft Account from your user accounts.

You should only do this process after the Windows 10 Anniversary Update’s final release, or at least Windows 10 Build 14371.

Since the Anniversary Update is not out yet in final form, you may want to attach a Microsoft Account, and then remove it after the Anniversary Update is installed successfully.

If I previously signed in with a Microsoft Account, and then removed it, then later upgraded to Windows 10 Anniversary Update… am I good?

Don’t count on it. Microsoft won’t confirm that is the case. And the only way to check your device’s status is to log in with a Microsoft Account, on that specific PC, after the Anniversary Update is released.

As of today, Microsoft hasn’t shared a tool online to log in to your Microsoft account, and query device activations. I don’t think they really have plans to, for that matter.

So, to be safe, you will need to re-add a Microsoft Account to your PC, after installing Anniversary Update, and then remove it once you have confirmed the activation has been paired.

My PC came with Windows 7 or 8/8.1 Home. I then upgraded to Windows 10 Home. I don’t want Pro… do I really need to go through this?

It’s a good idea. In theory, your Digital Entitlement should just re-add itself after you install Windows 10. And I suspect that, even after the Anniversary Update, the Windows 10 install media will still upgrade a BIOS key after at least a clean install, when booted from the flash drive – but no promises!

If you want to “stay safe” the best thing to do is to follow the procedure as above, regardless of scenario.

I have a small business computer. It had a Windows retail key. What the heck happens if one of my employees logged in with their personal Microsoft Account?

Ah, then the havoc begins! You should hope/pray that they didn’t do so on a PC using a retail or upgraded license key.

The really bad news for people in this boat, is that your only option is to call Microsoft and plead your case to Windows Activation Customer Service. Employees probably had no idea about this protocol, and worse, there’s no easy way to block Microsoft Accounts being added to an un-managed PC.

I suspect this has the added benefit of pressuring Microsoft customers to switch to more managed environments, as a departing employee could compromise their license rights, albeit inadvertently.

What should I do if multiple Microsoft Accounts are attached to my PC?

This is tough because it appears that the key will be stored with the first MSA that was used associated with the PC, and is still present.

If you somehow have multiple MSA’s associated with one PC, I would remove them prior to the Anniversary Update, then log in with just the one that you want the product key to be binded to.

Is this all nuts?

No, I think Microsoft made this with the best of intentions. But it underscores why having a temporarily-free upgrade period is such a challenge for Microsoft. It creates an urgency to upgrade, which helps with the attach rate for Windows 10, certainly. But it also creates major issues for cleaning up the mess after July 28, 2016.

My advice to Microsoft would be to act in a customer-is-always-right manner after July 28, and ensure that anyone with a Windows 7, 8, or 8.1 key, and can even argue that they tried to upgrade or reinstall properly, should be vended a new Windows 10 one-time activation code. I suspect they are already intent on doing that, but we won’t know until people run into issues at the end of this month.