Microsoft licensing explained

Catering for the needs of a variety of users, from a software licensing perspective, is not an easy job. In a bid to ensure that it caters for the specific needs of its many users, Microsoft has a variety of licence types and categories. Here, we take a look at the licences that are most relevant to resellers - OEM, DSP and COA.

An OEM licence is a licence distributed by an original equipment manufacturer, or OEM. An OEM is a person or company who builds and sells computers, and sometimes distributes software (like Microsoft Windows). OEMs that distribute software will install Microsoft software onto a computer system before shipping the system to an end-user customer, who will then be the holder of an OEM licence for that software. In order to legally do this, the system builder has to have a Microsoft OEM System Builder Licence from Microsoft.

OEM software differs from retail version software in that it is only ever shipped pre-installed onto a machine. The end-user licence agreement (EULA) for OEM software is slightly different from other EULAs and, for example, does not allow the user to install that copy of the software onto another machine, under any circumstances.

An OEM product typically includes the software in the form of a CD-ROM, the certificate of authenticity, the product key code, the licence and a registration card. OEM software can be purchased by system builders from authorised Microsoft distribution partners.

DSP software is similar to OEM software, but is distributed for smaller system integrators and system builder hobbyists for "clone" or no-name computers. Unlike OEM software, there is no manufacturer`s name stamped on the manual or printed on the licence. Like OEM versions, DSP versions often come with only an electronic help manual, which is built-in to the software or a small getting-started manual. The software itself contains the same programs as the retail version, except the retail version normally comes with a small printed manual. Both OEM and DSP Microsoft software include a certificate of authenticity label or sticker from the manufacturer. DSP software can be purchased from authorised Microsoft distribution partners.

A certificate of authenticity (COA) is a label that helps resellers and users to visually identify genuine Microsoft software. It includes advanced anti-counterfeiting features to help users to verify the authenticity of the software. COAs may also contain a bar code that is used for product tracking purposes.

A COA label should always accompany the product that it is associated with. COA labels cannot be purchased separately (genuine COAs are always affixed to the product they accompany). OEM/DSP software will always have a COA, onto which the product key (which is affixed to the CD holder in retail versions) has been printed.

With the release of Windows XP Service Pack 2 the words "Proof of Licence" began appearing on COAs and product key labels. A genuine Microsoft COA or product key label with the words "Proof of Licence" indicates legal proof of ownership of the associated software.

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