Windows 7 windows update question

If every computer in the world checked for updates at the exact same time, it would overwhelm Microsoft's servers. Therefore, Windows Update, by default uses an Automatic Update detection interval. This mechanism can be manipulated using local or group policy in a document better detailed here: Configure Automatic Updates by Using Group Policy

One way that Microsoft has reduced the load on their update servers, and in doing so, reducing the load on business networks, was to develop WSUS (Windows Server Update Service), which allows single or multiple Windows Servers to function as Windows Update servers for client machines connected to a Windows domain network. The way this works is by installing the Windows Server Update Service (WSUS) role in Windows Server 2003 and/or Windows Server 2008 and using group policy to point clients to the local server(s). These servers retain a copy of whatever updates the enterprise administrative group deems are appropriate for the machines. Exceptions and rules can be put in place based on a number of criteria.

So instead of 200 computers downloading from Microsoft, they are using the LAN.