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Software Differences

Over the past week, I’ve had a couple people ask me this question. They’re often unsure if they should purchase software on a computer when they buy a system new, or if they should purchase the software and install it after they receive a new computer. There is often a price difference between the two options, but there are also stipulations. So, let’s explain them.

When you order a new computer system from a manufacturer, such as Dell or HP, if you order a copy of Windows 7 on the system, that version of Windows will usually be under an OEM license. OEM stands for Original Equipment Manufacturer and this software is restricted in that it can only be purchased and installed by these manufacturers and vendors.

OEM software has a benefit in that it is often cheaper than purchasing the same software at your local electronics store. However, the stipulation with OEM software is that you, as a consumer, cannot purchase OEM software directly (legally). It can only be purchased when buying new systems through manufacturers. The second stipulation is that the software and its license is tied to that physical computer system. It is non-transferrable. So, if you purchase a new computer system but wish to use the copy of Windows on your old computer, you will be unable to do so if you purchased that version of Windows under an OEM license.

Retail software is a little different. You may purchase this software at an electronics store, such as Best Buy. This software is more expensive, but you may transfer the software installation to another computer system if necessary, provided the software is only installed on one computer at a time.

One of the other differences between the two is that retail software also comes in two flavors, full or upgrade. OEM software has a stipulation that it can only be reinstalled on original hardware with a full installation, but no upgrade.

So, when deciding how to purchase your software, perhaps ask these questions:

• Will I ever have a need to move this software from one system to another? If yes, choose retail.
• Am I limited by time or budget on my software purchase? If yes, you might lean toward OEM software.

Also remember that you can purchase separate types of licensing for software on your system. For instance, you may choose to purchase an OEM copy of Windows on a new computer, but may decide to pick up a retail copy of Microsoft Office for the system after it arrives. That way when you purchase a newer system in the future, you can remove the Office suite from your old system and install it on your new system. All good things to keep in mind!

For more information on OEM licensing, visit

To help determine licensing on software, visit

Tags: Tech Tips


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