November 3rd, 2009

What Microsoft won't tell you about Windows 7 licensing

Posted by Ed Bott @ 6:41 pm

Categories: Licensing, Windows 7

Tags: Volume-license, License Agreement, PC, Upgrade, OEM, Microsoft Corp., Copy, Edition, Windows Activation, Full Package Product Product

<– See introduction and full table on previous page

Windows 7 OEM versions

According to Microsoft, roughly 90% of all copies of Windows are purchased with new PCs, preinstalled by Original Equipment Manufacturers that build the PC and sell Windows as part of the package. That will certainly be true with Windows 7.

OEM (major PC manufacturer) This is, by far, the cheapest way to purchase Windows 7. The top 20 or so PC makers (sometimes called “royalty OEMs”) collectively sell millions of PCs per month with Windows already installed on them. When you start up that PC for the first time, you accept two license agreements, one with the manufacturer and one with Microsoft. Here’s what you need to know about this type of license agreement:

• Your Windows license agreement is between you and the PC maker, not between you and Microsoft.
• The OEM uses special imaging tools to install Windows on PCs they manufacture. When you first turn on the PC, you accept a license agreement with the OEM and with Microsoft.
• The PC maker is required to provide support for Windows. Except for security issues, Microsoft will not provide free support for any issues you have with Windows purchased from an OEM.
• Your copy of Windows is locked to the PC on which you purchased it. You cannot transfer that license to another PC.
• You can upgrade any components or peripherals on your PC and keep your license intact. You can replace the motherboard with an identical model or an equivalent model from the OEM if it fails. However, if you personally replace or upgrade the motherboard, your OEM Windows license is null and void.
• Windows activation is typically not required when Windows is preinstalled by a royalty OEM. Instead, these copies are pre-activated at the factory. Your copy of Windows will be automatically reactivated if you reinstall it using the media or recovery partition from the PC maker, it will not require activation.
• At the time you purchase an OEM copy of Windows 7 to be preinstalled on a new PC, you must choose either 32-bit or 64-bit Windows. Your agreement with the OEM determines whether you can switch to a different version; some PC makers support only a single version with specific PC models and will not allow you to switch from 32-bit to 64-bit (or vice versa) after purchase.

OEM (System Builder) If you buy a new computer from a local PC builder (sometimes called a “white box” PC), you can get an OEM edition of Windows preinstalled. This type of OEM license differs in a few crucial details from the version the big PC makers sell:

• As with the royalty OEM versions, your copy of Windows is locked to the PC on which it is installed and cannot be transferred to a PC, nor can the motherboard be upgraded.
• Under the terms of its agreement with Microsoft, the OEM must use the Windows OEM Preinstallation Kit (OPK) to install Windows. When you first turn on the PC, you accept a license agreement with the OEM and with Microsoft. The OEM is required to provide support for your copy of Windows.
• Activation of your new PC is required within 30 days. The product key should already have been entered as part of the OPK installation and activation should be automatic and transparent to you.
• Although it is possible for an individual to buy a System Builder copy of Windows 7 and install it on a new PC, that scenario is specifically prohibited by the license agreement, which requires that the software be installed using the OPK and then resold to a non-related third party. (As I noted in a September 2008 post, Microsoft once allowed “hobbyists” to use OEM System Builder software to build their own PCs, but the company switched to a hard-line stance on this issue sometime after Vista shipped in early 2007.)
• When you purchase a white-box PC from a system builder, the PC maker preinstalls the Windows version you purchased. The package you receive includes reinstallation media and a product key that is similar to a full packaged product but cannot be used for an in-place upgrade. You may or may not receive both 32-bit and 64-bit media. If you receive both types of media, you can switch from 32-bit to 64-bit Windows or vice versa by performing a custom reinstall using your product key.

[Update: As a consumer, you can buy an OEM System Builder copy of Windows from countless online shopping outlets. Technically, you're not supposed to use those copies unless you're building a PC for resal to a third party. But Microsoft's own employees and retail partners, and even its own "decision engine," Bing, aren't so clear on the rules. For a detailed discussion, see Is it OK to use OEM Windows on your own PC? Even Microsoft's not sure.]

All clear? Now let’s move on to the next category: upgrades.

Next page: All about upgrades –>

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