Windows 10 ESU Year Two vs. Upgrading: What a Small Business Should Do

Windows 10 Extended Security Updates cost $61 per device in Year One, $122 in Year Two and $244 in Year Three for businesses. Year Two starts now, and paying for it also requires Year One. Upgrading eligible PCs to Windows 11 carries no license fee, so the real choice is paying, upgrading or replacing.

This comparison is for owners and managers of small offices that still run Windows 10 on some or all of their computers. Little iApps compares published plan details and prices so you can narrow the options before you spend, and this one sets three paths side by side with the math for a ten-PC office.

What Do Windows 10 Extended Security Updates Cost?

Microsoft's documentation says ESU for organizations is sold through volume licensing at $61 per device for Year One, and the price doubles each consecutive year for a maximum of three years. That puts Year Two at $122 and Year Three at $244. The program is cumulative.

Cumulative matters. Microsoft's ESU program page says you cannot buy partial periods, and that if you buy in Year Two you must also pay for Year One. A business that ignored the deadline last year therefore owes $183 per device to get covered now.

Over the full three years, the total is $427 per device. For a ten-PC office, that is $4,270 for security patches alone. The table below shows the costs for ten devices.

What Does ESU Cover, and What Does It Skip?

ESU covers critical and important security updates, and nothing else. Microsoft's page lists what is excluded: new features, customer-requested non-security updates and design changes. General technical support is not provided either, only help with ESU licensing, installation and regressions.

The program also needs a recent baseline. Devices must run Windows 10 version 22H2 to be eligible. Windows 10 PCs keep working without ESU, Microsoft says, but they stop receiving technical support, feature updates and security fixes.

The security part is the real risk. The Cybersecurity and Infrastructure Security Agency (CISA) keeps a public catalog of known exploited vulnerabilities that attackers are using in the wild. An unpatched PC is a standing target for those flaws, which is why ESU exists at all.

Can Your PCs Run Windows 11?

Many can, and the upgrade costs nothing in license fees if the device qualifies. The requirements are specific. Microsoft's Windows 11 requirements page lists them.

The TPM and processor rules are the usual blockers. A PC bought several years ago may fail on one of them even if it runs fine today. Microsoft also asks that eligible Windows 10 devices run version 2004 or later with a specific 2021 update installed.

The practical step is to run Microsoft's PC Health Check or your management tool across the office and write down which machines pass. Do it once and keep the list.

How Do the Three Options Compare?

The three options are to pay for ESU, upgrade or replace the PC with Windows 11, or move the user to a Windows 365 Cloud PC. Each fits a different kind of machine. The comparison below lays out cost, effort and risk.

Cost for replacement depends on what you buy, so get quotes. The point is the comparison. A PC that costs $244 to patch in its final ESU year is close to a down payment on a new machine.

What Are the Hidden Costs of Upgrading?

The hidden costs of upgrading are staff time, testing and the odd incompatible device. The license is free for eligible PCs, but nobody works for free. An upgrade that takes an hour per machine, across ten machines, is a full working day of someone's time.

Backups come first. Copy data off each machine, confirm the copy opens and note any licensed software that needs reactivation. These steps are dull, and they are exactly what protects you if an upgrade goes badly.

Then test the apps that matter. A bookkeeping program, a label printer or a point-of-sale tool is the sort of thing that works on one Windows version and fails on the next. Check one machine before you roll out to the rest, and ask each software vendor whether your version supports Windows 11.

Finally, budget for training. The Windows 11 menus look different, and a short note on where things moved saves a lot of small questions in the first week.

If you are also weighing AI tools for the new setup, see what Copilot Business costs a small team before you commit seats.

What Are the Risks of Doing Nothing?

Doing nothing leaves each Windows 10 PC without security fixes, which raises the odds of a breach over time. The risk is not equal for every machine. A PC that holds client data or logs into your bank is far more exposed than one that only runs a label printer.

Insurers and clients also ask questions. Some cyber insurance forms and customer security questionnaires ask whether your systems still receive vendor security updates. An honest "no" can cost you a policy or a contract, which is a business reason to act beyond the technical one.

The National Institute of Standards and Technology (NIST) runs a small business cybersecurity page with plain-language checklists for patching and backups. It is a good companion to any migration plan.

When Is Windows 365 a Sensible Option?

Windows 365 makes sense when you have a few people on old hardware and do not want to buy new PCs yet. A Cloud PC is a Windows desktop hosted by Microsoft, and the person reaches it from almost any device. Microsoft's documentation says Windows 10 endpoints connecting to Cloud PCs are entitled to ESU for up to three years with an active subscription.

You can read how the service works in Microsoft's Windows 365 overview. It is not a cheap shortcut. A monthly subscription per user adds up, and it only makes sense for people who need Windows and have no good local machine.

It also ties into the rest of your Microsoft spend. If you already pay for Microsoft 365, our Microsoft 365 and Google Workspace pricing comparison shows the base costs to add to this decision.

How Should a Small Office Decide, Step by Step?

Decide device by device, not office-wide. Some PCs will pass the Windows 11 check and some will not, and that split drives the whole budget. A short inventory takes an afternoon and prevents an expensive blanket decision.

Use this plan to work through it.

Keep a date in mind. ESU covers a maximum of three years after end of support, so even the longest plan ends around October 2028. Any PC you patch should have a retirement date written next to it.

What Else Should You Check Before Switching?

Check your business apps before you touch the operating system. Accounting packages, printers, scanners and specialty software sometimes lag behind a new Windows version. A pilot on one machine tells you what breaks before it breaks everywhere.

Review your sign-in security at the same time. A migration is a natural moment to move to stronger logins, and our guide to setting up passkeys for a small business team walks through it.

Conclusion

For most small offices the answer is a mix. Upgrade the PCs that qualify, replace the oldest ones, and pay for ESU only on machines that need a short bridge. Paying $122 now and $244 later for every device is the most expensive path.

Little iApps will keep tracking how these prices and deadlines change. Start with the inventory, because it turns a vague worry into a short list of decisions and a budget you can defend.