As you may know, the Windows 10 free update period expires July 29th, 2016. With that date looming, it becomes more important than usual to know the difference between OEM and retail versions of the operating system.
OEM is short for Original Equipment Manufacturer. This license refers to the installation of Windows on pre-built systems for sale to consumers online and in stores. For this reason, it’s very likely that the Windows you’re using right now is OEM. The primary limitation is that you may not install using the same license key on another computer, even if you uninstall it from the original computer first. Many people find this unintuitive, so it’s important to note. You may also rightly feel that it’s very restrictive, but the manufacturer saved money on a bulk number of licenses by accepting that restriction and passed their savings on to you. And this works out for most people most of the time. It’s rare that someone would benefit from the ability to transfer their Windows installation given that a new computer purchase usually comes with a new OEM license.
Here is Microsoft’s official word from their OEM Licensing FAQ:
“The OEM software is licensed with the computer system on which it was originally installed and is tied to that original machine. OEM licenses are single-use licenses that cannot be installed on more than one computer system, even if the original machine is no longer in use. The Microsoft Software License Terms, which the end user must accept before using the software, state that the license may not be shared, transferred to, or used concurrently on different computers.”
So what is a retail license? This type of license answers the need for installation on multiple computers. It’s only available as a standalone purchase so if you’ve bought a copy of Windows on its own, separately from a computer, you have this version. To be clear, though, the OS can still only be installed on one computer at any given time. This just means that, when you’d like to upgrade, you can buy a computer with no OS, uninstall your retail version of Windows from the old box, and install it on the new one. It’s a way to save money if you know that you’ll be sticking with Windows long term, which I’ll venture to say is a no-brainer for most current Windows users (unless you’re eyeing OS X). To justify the one-time purchase price, you would need to be committed for at least two computer upgrades.