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What's OEM software? Is it safe to buy?

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Summary: OEM Software is heavily advertised, often in spam, at prices much cheaper than retail. The problem is that OEM software is often illegal.

I need to buy a new XP disc and license key. I see some websites sell the OEM version. What's the difference between that and a version I'd buy off the shelf? Will Microsoft let me activate an OEM license key if I'm only a consumer?

OEM stands for "Original Equipment Manufacturer", and those are the folks like Dell and HP and Sony and others who manufacture computers. OEM Software is the software that they install on your machine, or provide with the machine, when you purchase it new.

How, then, can one buy OEM Software without purchasing a machine?

That, my friend, is exactly the issue.

If you've purchased a machine lately, there's a lot of software already installed on the machine. A good manufacturer will also provide you with the CD-ROMs containing that software, so that you can re-install it should you need to reformat or otherwise repair your machine.

OEM Versions of software are provided by the software vendors, like Microsoft, to manufacturers for mass distribution on new hardware. Sometimes there's nothing different between an OEM version of Windows and its retail counterpart. More often, though, the hardware manufacturer will customize the operating system such that in installs drives for their specific hardware, displays their logo on boot, or other things relating to that specific manufacturer. OEM versions of applications, such as Microsoft Office for example, are typically pretty much identical to the box you might pick up on a store shelf.

Folks attempting to sell OEM version of software are typically sell the backup CD-ROMs that came with machines they've purchased. They've backed up their machine in some other way, or perhaps duplicated the CDs for their own use, and are taking the "official" OEM CDs and offering them for sale.

"Folks attempting to sell OEM version of software are typically sell the backup CD-ROMs that came with machines they've purchased."

The problem is simple: OEM software almost always includes licensing language along these lines: "For distribution with a new personal computer only. This software may not be sold independently."

Pretty clear, eh? Reselling the software that came with your computer is a violation of the software vendor's terms. In other words, it's illegal.

Another potential problem is that what's advertised as OEM software isn't that at all - it's simply illegal pirated copies of the software. The OEM term is used simply to attempt to "legitimize" the deeply discounted price.

Now, unless you yourself are building a business attempting to sell OEM software illegally, you're probably not going to get a visit from the police about this. But you could run into some very serious issues down the road. Specifically: you may not be able to update your software.

Microsoft, in particular, has been slowly ramping up their enforcement of software legitimacy. That means that if the software you're running is determined to be an OEM version that's been compromised and purchased illegally (typically determined by the product key being used by many more people than there were machines shipped with that key), you may be denied product updates, including serious security patches, until you legalize your copy. (Which is typically as simple as purchasing a retail copy and installing that on top of your existing copy.)

So my advice is simple: buy retail. Definitely go bargain hunting, but as soon as you see "OEM", run away. Buy from a legitimate retailer instead.

Related:

Article C2692 - June 17, 2006

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Recent Comments
27 Comments

Sounds kinda tricky but if you read Micorsoft's EULA its states:
Old License--
A System Builder is anyone who builds, rebuilds, or installs software on a new or used PC. By opening this package, the System Builder accepts all the terms of this license. If you don’t open the box, you can distribute it to another system builder. Be sure to read through the license before opening the box. Once the box is opened, the product cannot be returned.

New License--

By opening the package, you accept the license, which allows you to distribute the licenses inside the package with fully assembled computer systems.
A fully assembled computer system consists of at least a CPU, a motherboard, a hard drive, a power supply and a case.
By accepting the license, you agree you are a system builder which is an OEM, an assembler, refurbisher, or pre-installer of software on computer systems.
Distribution and distribute refer to the point in time when a fully assembled computer system leaves the control of the system builder.
If you do not open the package, you may deliver it to another system builder.
(http://oem.microsoft.com/downloads/licensing/Zoom1-5/ZoomInNew.html)
Hymmm, so as long as it is sealed, unused and unopened you can "deliver" it to anyone installing it on a computer in your country. Otherwise how would HP,Dell, Sony etc...get the software. Here is a fact: the serious price break for MS software is around 10k copies a year and the small system builder probably won't sell that many computers in 10 years. So When you see that copy of Vista Ultimate for 399.00 in the large retail chains and the system builder is selling it for $269.00 who do you think is making the biggest profit? Just remember OEM software has to be sealed! (like in the store)

Posted by: Daglow at March 19, 2008 6:46 PM

As for me I dealed once with 'oem' downloaded from www.oemsoftware.cn
they were not scammers so I received what expected, but I had to pay much less and I liked it but I didn`t receive any licence (

Posted by: Ricardo at May 17, 2008 10:42 AM

Daglow, and what about http://oemsoftware.in ?
i have a good experience with this oem shop, can I trust it?

Posted by: Federick at June 16, 2008 1:45 PM

You really have to look for the sticker, as long as there is a sticker on the packaging, it is legal (as long as the license number on the sticker has not been used), most OEM manufacturers, like Dell, Sony Vaio, Compaq, and other computer manufacturers, put the sticker on the back/side/top of the computer, it's kind of hard to remove the sticker off the case and put it on the plastic shrinkwrap around the CD and booklet, and I think that, just like warranty stickers, there is a "VOID" adhesive layer, so as long as the sticker is on the shrinkwrap, it is a legal OEM version, I have use OEM versions of Windows on a lot of computers, 100% legal

Posted by: mikedamirault at October 14, 2008 12:12 AM

Some of the software vender's like oemsoftware.cn do not sale software but only archives versions of software. This was the same thing done 20 + years ago. The law as it was (and I haven't kept up on it) was the you could reproduce intellectual property for personal protection of your purchase. It is the product ie. Song, story, movie, software, etc. That is protected not the media. Its kind of like not having to toss out all of your movies if your dvd player dies, you just get a new one. The only problem is that if you don't have an original copy then its stealing. All of these EULA now are doing there best to get around that fact mostly due to a real problem with copyright infrengment.

Posted by: Mike at October 27, 2008 12:23 AM

Hi,

I have a dell desktop machine that comes up with a preloaded xp.Now i want to upgrade my system(upgrade my processor,motherboard,ram), here the question can i able install the xp by using the recovery cd given by xp.will it work or not.

Most likely not. Recovery CDs are not the same as installation CDs. Depending on what or how much you are upgrading, it might not work. Contact Dell to figure out exactly what you need to do in your specific situation.
- Leo
04-Dec-2008
Posted by: Hemanth at December 3, 2008 8:57 AM

If I have an old machine that has an OEM office instalation on it (SBE 2003), would it be okay to reuse the key for this instalation on a new machine while the old machine is decommissioned completely and not used again?

I believe that strictly speaking you may not - OEM software is licsensed for the one specific machine it was delivered on. (OEM software may also not always work on other brands or models of computers than originally delivered on, but I suspect that's not the case for Office.) But check the wording of the license - it may also vary from OEM to OEM.
- Leo
06-Jan-2009

Posted by: Obi Khan at January 5, 2009 7:35 AM

I am a software developer and I am just about to sign up a packaging and distribution agreement with some distribution company,can I distribute my software as an OEM, since there is no specific hardware accompaniment or prescription

Posted by: Charles Ombongi at May 7, 2009 2:35 AM

ok dude millions of people buy off newegg.com so you are definitely safe to purchase oem off there i promise but any other site except newegg.com, tigerdirect.com or compusa.com i say no so here is safe oem software: http://www.newegg.com/Store/Software.aspx?name=Software there is no way it can be pirated because it has the original manual and the disk is not blank and it says windows vista on the front printed like the retail and all updates work to so don't be afraid of oem at newegg.com

Posted by: Michael Fritz at June 29, 2009 4:41 PM

I recently purchased an "OEM" Windows 2000 Professional program, sealed, with legal COA and the program runs fine. In fact the laptop that I installed it on had previously ran the program, so the seller told me to use the old COA for it, and I did. I also installed it with the new COA on this laptop, both laptops runs and updates fine. But that may not work with XP, with the validation. But even with XP, the validation tool downloads first, without your consent, but the checker, you can refuse the download and even check not to show it again.

Posted by: Charles Tilley at October 21, 2009 12:00 AM

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