What is OEM software?

What's this OEM stuff?

One of the more confusing aspects of software purchasing surrounds OEM (Original Equipment Manufacturer) licensing. Microsoft, specifically, offers OEM versions of Windows to system builders at a price lower than retail software. Lower price? That's right, and you, too, can take advantage of OEM pricing if it makes sense for you.

What's the difference between retail and OEM?

There are a few differences. First, OEM software is packaged differently than retail copies. In other words, retail versions of Windows come in a prettier box. Another difference is in the EULA (End User License Agreement). Microsoft assumes that whoever is buying the OEM software is building a Windows computer system for re-sale, and therefore will be providing support for said system. If you are installing an OEM copy of Windows on a computer then you, in effect, are the system builder and are therefore responsible for the support of your own system. Lastly, OEM software is not transferable from one computer to another. I've read that "computer" in this case really means "motherboard" in order to account for other types of hardware upgrades that are acceptable. I've never verified this, but reportedly an OEM copy, once installed on a motherboard, will not install on a different motherboard. Retail copies of Windows, however, can be transferred from computer to computer. Lastly, OEM versions cannot be returned once open. There may be other subtle differences, as well. Though most consumers wouldn't know the difference, in the case of Vista Ultimate, the retail version included DVD's with both the 32 and 64 bit versions while the OEM version included either the 32 or the 64 bit version.

Do I need to worry about Retail vs OEM?

Only if you're building a computer or "upgrading" from one OS version to another (from Vista to Windows 7, for example). If you're buying a computer or laptop from a retail outlet or manufacturer (such as Best Buy, HP or Dell), it will come with an OEM copy of Windows and support from the manufacturer. If that is the case, then you won't need to worry about the retail/OEM question at all, since you won't have a choice in the matter. However, if you're building a computer from scratch or upgrading versions, you will want to explore whether OEM or Retail (as well as full install or upgrade, but that's another post) is appropriate for you.

Is OEM Legal?

Completely, as long as you follow the terms of the EULA. Don't rely on the information in this article, though. You are responsible for agreeing to the EULA, so be sure to read it before you click.

So what's the upside of OEM?

About $150 in your pocket, in the case of Windows Vista Ultimate. Savings on other versions may not be as drastic, so make sure you weigh your options carefully.

In light of recent pricing announcements from Microsoft, consumers would do well to make sure they explore all avenues prior to purchasing their next version of Windows.

Got an idea for a topic? E-mail me at toptoad@techonadime.net.