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OEM, Retail, Open Licensing, Bulk Licensing

Posted on 2004-08-23
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Last Modified: 2013-12-03
I am sick and tired of getting different answers from different people about Microsoft’s licensing scheme. After talking to multiple Microsoft people and Dell licensing people this is my conclusion. Would someone that knows exactly how MS licensing works tell me if I understand things correctly.

OEM - Original Equipment Manufacturer. OEM can only be purchased with a new PC. License is not transferable to another PC. This license must live and die with the PC it was purchased with. OEM licenses can be upgraded, for example, from windows 2000 to Windows XP.

Retail - Usually ships with extra worthless stuff like documentation. Microsoft does not support Retail you must contact the company you bought this license from for any technical help. The license can be transferred from one machine to another. Retail licenses cannot be upgraded. For example if you owned a licenses of windows 2000 retail you could not upgrade to windows XP you would need to purchase a new license for XP.

Bulk Licensing - This is a general term used when talking about open licensing and Software assurance.

Open Licensing - Open licensing is basically retail licensing in bulk quantities. It follows the same rules as bulk licensing does. The license can be moved from one computer to another but is not upgradeable just like retail.

Software assurance - Is bulk licensing on a software subscription service. As long as you pay your yearly maintenance fees you are entitled to the latest and greatest of the software your license under software assurance. Software assurance It is bulk licensing on a subscription service.

Thanks,
DMS
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Question by:DMS-X
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BigC666 earned 250 total points
ID: 11874689
howdy,

yep you got it, nice huh
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by:pjedmond
ID: 11874692
Looks pretty close to me....BUT.....

OEM licences must live and die with the it was purchased with.....What happens if the HD fails, and I change it, then the motherboard fails...I replace it, and it then needs a new PSU?....Eventually I might have a completely new PC:)

Retail licences cannot be upgraded.....Go to your local PC store, and you'll see XP retail, AND upgrade versions:)

Bulk and Open I'd agree with..but as always the devil is in the detail, and Microsoft occassionally product slight variants for some of their biggest customers (the select and educational select arrangements spring to mind).

Software Assurance......latest and greatest?.....or bleeding edge? Well, I suppose someone has to do Microsoft's beta testing?

There's also student licencing arrangements to muddy the waters even further, plus the complexity of some of the server/CAL licences to make things really difficult.

Congratulations....I think that you've got the hang of just how complex the Microsoft licencing structure is;)
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by:BigC666
ID: 11874707
nope that's the same pc, new pc use the same computer name as registered, same pc

hope that this helps
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by:knollbert
knollbert earned 50 total points
ID: 11874783
Original Equipment Manufacturer--
isn't nessarily bought with a new computer just needs hardware to be bought with it (anything from a new computer to screws for you computer).
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by:DMS-X
ID: 11876338
Thanks alot guys : )
Only Microsoft could get away with something as immoral as this.

knollbert,
Legally we are talking knollbert : )

Man I swear it took me hours to figure out how MS licensing works. I had a Dell guy today try and argue with me and tell me something different. He was telling me that OEM and Retail are the same thing.

This is one thing I am not sure of, would someone mind verifying this. This is what the Dell guy told me about MS Server 2003
OEM - Comes with 5 CAL's
Retail - Does not come with any CAL's

I administer a network and part of my job is to make sure we are legal as far as liciensing on all of our software. Does anyone actually follow the OEM and Retail rules. In other words as network administrator do you follow all of the OEM and Retail rules to the exact. If I was to get audited tomarrow and they found a OEM OS on a computer that wasnt the computer the OS shipped with, would we get fined?

Thanks again,
DMS
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by:LRI41
LRI41 earned 100 total points
ID: 11877053
A FAQ on the difference between OEM, DSP--Delivery Service Partner,
 AE- academic discount and Retail packages:


http://www.xxera.com/faqs/faq_s4.html


***********************************

The Difference Between XP Home Retail And OEM

BootLIST 074  
Date: 3/4/2003 10:33:38 PM Pacific Standard Time

Curios George inquires - What's the difference between XP Home
     retail and OEM?

     Bruce C. delineates:
     There are some very important reasons that an OEM license costs
     so much less than a retail license. OEM licenses are very
     limited:

     1) OEM versions must be sold with a piece of hardware (normally a
     motherboard or hard drive, if not an entire PC, although
     Microsoft has greatly relaxed the hardware criteria for WinXP)
     and are _permanently_ bound to the first PC on which they are
     installed. An OEM license, once installed, is not legally
     transferable to another computer under any circumstances. This is
     the best reason to avoid OEM versions; if the PC dies or is
     otherwise disposed of (even stolen), you cannot reuse your OEM
     license on a new PC.

     2) Microsoft provides no support for OEM versions. If you have
     any problems that require outside assistance, your only recourse
     is to contact the vendor of the OEM license. This would include
     such issues as lost a Product Key or replacing damaged
     installation media. (Microsoft does make allowances for those
     instances when you can prove that the OEM has gone out of
     business.) This doesn't mean that you can't download patches and
     service packs from Microsoft -- just no free live or email
     support for problems with the OS.

     3) An OEM CD cannot perform an upgrade, as it was designed to be
     installed _only_ upon an empty hard drive.

     4) If the OEM CD was designed by a specific manufacturer, such as
     eMachines, Sony, HP, Compaq, etc., it will most likely only
     install on the same brand of PC, as an additional anti-piracy
     feature. Further, such CDs are severely customized to contain
     only the minimum of device drivers, and a lot of extra nonsense,
     that the manufacturer feels necessary for the specific model of
     PC for which the CD was designed. (To be honest, such CDs should
     not be available on the open market; but, if you're shopping
     someplace like eBay, swap meets, or computer fairs, there's often
     no telling what you're buying until it's too late.) The "generic"
     OEM CDs, such as are sold to small systems builders, don't have
     this particular problem, though, and are pretty much the same as
     their retail counterparts.

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by:knollbert
ID: 11880294
No you can legally buy windows XP but i needs to come with hardware

You trust dell why??
OEM means no tech free support from mircosoft, like they let anyone use that anyways
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by:knollbert
ID: 11880350
Check out http://www.planetmicro.co.uk/product_info.asp?stockcode=M000657

Note the items that you need to buy to buy OEM
AND that it gives the OEM licensing agreement
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by:pjedmond
pjedmond earned 100 total points
ID: 11880450
DMS-X

I do my level best to follow the licencing regulations, but as a freelance consultant/IT technician, it can be extremely difficult. See my Q on this:

http://www.experts-exchange.com/Operating_Systems/Win2000/Q_21094419.html

Particularly as to which bit of the package actually gives you the right to use the software? COA? Licence slip etc.

Please feel free to add you thoughts and feelings to my Q as well.
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by:pjedmond
ID: 11880488
With respect to Server Licences, they seem to come in all sorts of variants. Speaking from my experience with Windows Server 2000, there were variants sold with 0,5,20,25, and 50 CAL licances. Plus this has now become even more complex with Windows 2003 Server, with 2 different types of CAL...or 3 if you include Terminal Services as well.
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by:DMS-X
ID: 11883814
Well thanks for all of the help guys, its not a fun subject is it : )

So lets say I bought windows 2000 OEM and I wanted to update to windows XP. When I purchase a upgrade copy of windows XP is it considered OEM, OEM upgrade, or is it in a license classification of its own? How many times can you upgrade?

knollbert,
>You trust dell why??
I think of Dell the same way that I think of Walmart. They seem to have simular morals, which seem to be next to none. We decided to buy from just 1 vendor long ago for our computers. Dell was the decision that was made. Dell's computers are fairly decent, I don't think their any better or worse than any of the other larger computer vendors as far as quality of hardware goes. They all cut corners. Who do you trust?

Thanks,
DMS
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by:pjedmond
ID: 11883939
...as I said..the devil is in the detail;)
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by:knollbert
ID: 11883945
No one, except for those who manufacture the product in your case microsoft.

try emailing

piracy@microsoft.com

ask them your question then
 store their replies that way in case of in audit you have proof that M$ claimed that your Pc's are valid
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by:knollbert
ID: 11884002
After Rereading "We decided to buy from just 1 vendor long ago for our computers."  Yes, I would trust Dell only if MS won't reply, but i would still logg any communications.  (deflect blame)
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by:ugrsrt
ID: 11890777
I too have been looking at this issue in detail in recent weeks and it is indeed a minefield of vague and inaccurate information.  From my perspective as being responsible for my companies network and any software installed, I have to be sure all software installed is licensed as well as trying to save a few bob.  As a result of this OEM software looked very tempting for several resons: we don't need a box,  we can provide our own software support and we don't require a manual either because we already have the expertise or we have one already that came with a retail copy.

However when you read the OEM license www.microsoft.com/oem/sblicense without trying to read it the way you want it to read, you'll find that section 4.2 states: If the individual software license is application or server software, we grant you the non-exclusive right to distribute individual software licenses; provided that each one is distributed with a fully assembled assembled computer system.

Note the key phrase: 'fully assembled computer system'
So no cheap MS Office Software for me :o(

However for Operating software it seems slightly more relaxed.  and this is where the buying a non peripheral hardware thing came about.  However this only apllies to OS software not application or server software.
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by:DMS-X
ID: 11903366
ugrsrt,

If I am understanding the point you are making then you are just enforecing what I have been saying all along and that is the only legal way of obtaining any OEM copy of a Microsoft product is by buying it with a new PC.

DMS
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by:ugrsrt
ID: 11903681
No from what I can see, you could buy an OEM operating system such as Win XP or Win 2K as long as you bought a non peripheral piece of hardware.  This is a very loose phrase and I belive you can easily argue that a cpu fan or an IDE cable is a non peripheral piece of hardware.  So it would be perfectly legal to buy a OEM microsoft operating system with either of these items, but I stress this only applies to operating systems and not application software.

Rob
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by:DMS-X
ID: 11914928
This is the problem, everyone interprets the MS licensing rules differently, no doubt it creates confusion. I guess its what MS wanted confusion that way they can unleash their lawyers anyway they see fit. I don't think anyone really fuly understands the boundries other than billy and his lawyers : )

Thanks everyone,
DMS
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