Earlier today, I saw a small piece on Maximum PC about the OEM System Builder copies of Windows being technically illegal for home users, and also, strangely enough, system builders, to use on a PC that will be used by them.

Whenever we recommend a build list for new systems, we inevitably turn to Windows OEM editions for the OS. They are bit for bit just as powerful as their retail cousins, but may require a bit of telephone tag with Microsoft when upgrading and you were stuck with nobody to call if you need support. Overall the experience wasn’t so bad given the discount, but an important, albeit subtle change in the Windows 7 EULA could permanently alter this recommendation. The specific clause found in prior OEM editions of Windows is as follows:

“OEM system builder software packs are intended for PC and server manufacturers or assemblers ONLY. They are not intended for distribution to end users. Unless the end user is actually assembling his/her own PC, in which case, that end user is considered a system builder as well.”

As you can see from the above passage, prior versions clearly made allowance for those that assembled their own system, sadly, this is no longer the case in Windows 7. Assuming this isn’t a mistake (and when do lawyers ever make mistakes), then Windows 7 OEM editions can legally only be installed on machines you intend to sell. I suppose you could always pawn off your new machine to a family member for a song, then politely ask them to return it, but Microsoft clearly wants to push more home users over to the retail edition.

In the past, this has been acknowledged as a legitimate usage of the OEM version, and the major problem was always identified as being that when the motherboard dies,  effectively so does the copy of Windows. Of course, you could possibly find another identical motherboard, so that the copy installed will not complain, but otherwise, the copy of Windows is truly dead. (This is in legal terms – I’m not sure if you could actually get by with moving a copy from one make of motherboard to the next – but know this, it would be technically illegal.)

Perhaps ZDNet’s Ed Bott saw the story on the Maximum PC site as well, because a while later I found a piece in his regular space, describing the controversy, the lack of respect for the customer, and the ability of Microsoft to muck up what should be  simple instructions to convey their corporate wishes.

I’m talking about OEM System Builder licenses for Windows desktop editions. If you look at any online shopping site that caters to PC enthusiasts, you’ll find these copies displayed alongside the upgrade and full license packages that Microsoft says retail customers are supposed to buy. My friend and fellow Windows expert Paul Thurrott just posted a thorough look at the Windows 7 OEM System Builder package, complete with pictures. If you’re building your own PC or looking for installation media that won’t make you jump through hoops to install it, this product is extremely attractive, because it’s significantly less expensive than a full retail license. The installation media works almost exactly like a full retail copy of Windows, except that it can’t be used for upgrades.

Many readers tell me they bought that software and installed it on their own new (or old) PC, happily saving a significant chunk of change in the process. According to Microsoft, they are violating the terms of the OEM System Builder license agreement, which says, in convoluted language, that you must install the software using the OEM Preinstallation Kit and then resell the PC to a third party. If you install that software on your own PC, you don’t have a “genuine” copy of Windows.

But how are you supposed to know? Microsoft allows any online retailer to sell OEM System Builder software with no indication of its terms and conditions. A consumer is expected to read the license agreement printed in tiny type on the outside of the OEM System Builder software package and then translate its dense legalese into plain English (PDF here):

Mr. Bott continues by showing where those who are supposed to be in the know don’t seem to. He gives illustrations of the way things used to be handled, the places where information covering this were once displayed, and notes that these places of displayed information have been suspiciously sanitized (obviously for Microsoft’s protection).

He then comes up with an admission that normally he is arrow-straight about licensing, but in this case he gives his approval until Microsoft comes clean and clears this one up.

Just when I was giving up on him totally, Ed restores my faith in part of the press, and shows he has a pair.

I applaud his sense of right and wrong, and hope it doesn’t cost him anything (really). This is another place where Microsoft, shown in the past two weeks to be turning, in some ways, from the dark side, could help its cause again, with a simple press release and apology for being obtuse once again.


Apple_Microsoftand people wonder why pictures like this one are found all over the internet – but, Microsoft appears to be changing, they might clear this up to most people’s satisfaction….

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