Everything you always wanted to know about Windows Product Activation

Last week I explained why Microsoft’s changes to Windows Product Activation (WPA), which take effect today, are no big deal for most Windows users.

Sadly, the FUD about this issue is spreading through the Internet without much regard for the underlying facts. In addition to Betanews and Slashdot, the story has been picked up by eWeek, CNET News.com, eHomeUpgrade, Microsoft Monitor, WinInsider, InfoWorld, and countless others. The general consensus is that “customers who find themselves reinstalling Windows XP should be ready for a headache,” as CNET put it. Fortunately, that conventional wisdom is wrong.

Trying to make sense of the ins and outs of Windows licensing can be difficult even for someone who makes a living as a Windows expert, so it’s understandable that a reporter trying to write a 200–word story on a tight deadline would get confused. WPA is a complex technology. By the time you finish this article, you’ll understand it a lot better.

For starters, not every copy of Windows requires activation. WPA requirements vary depending on the type of license associated with a copy of Windows. Microsoft sells Windows licenses through three separate programs:

Full Packaged Product (FPP, more commonly referred to as Retail) – These are available in shrink-wrapped boxes, as full licenses (no previous version of Windows required) and as upgrade packages, which typically sell at a discount and require you to provide media from a previous Windows version as part of the previous installation. After installing a retail product, you must go through Windows Product Activation. For most installations, this takes place automatically over the Internet. To learn more about WPA, read Microsoft’s official documentation (pay special attention to the changes in Windows XP Service Pack 1), Alex Nichol’s excellent WPA FAQ, and the now somewhat outdated but still interesting Inside Windows Product Activation, which was prepared around the time Windows XP was first released in 2001. None of the changes announced last week have any effect on you if you use a retail copy of Windows XP.

Volume Licensing (VL) programs – Businesses, government agencies, charitable organizations, and academic institutions are eligible to purchase upgrades to Windows in bulk through one of several licensing programs, the terms of which vary depending on the size of the organization. (The original license must be purchased individually or with a new computer; that license is then enrolled in the Volume Licensing program.) According to this page, “Microsoft understands the unique deployment requirements of businesses that need to acquire licenses in volume and provides product that does not require activation to those customers… Customers can qualify for Microsoft’s Open Licensing program by purchasing as few as five licenses.” Knowledge Base article 299840 provides more technical details: “Activation is not required when you use Volume License media (VL versions of Windows XP) in conjunction with the VL product keys.” (More information is available in the Microsoft Volume Licensing FAQ and on the Volume Licensing Home Page.)

Microsoft made some changes to VL keys with Windows XP Service Pack 1, specifically: blocking two volume license keys that had escaped into the wild and were widely used for pirated copies; and allowing IT staff to encrypt and time-limit the key used on CDs made for unattended installation. None of the changes announced last week have any effect on you if you use a VL version of Windows XP.

OEM/System Builder –  According to the Microsoft Volume Licensing FAQ, “There are two different types of OEM licensing vehicles, one for ‘named’ or ‘Multi-National’ OEMs, and one for system builders. Both types of OEMs may build and distribute computer systems with Microsoft software preinstalled.” That first category is more commonly referred to as Royalty OEMs. If you purchase a PC with Windows XP pre-installed, the changes announced last week may affect you.

OK, it’s that last category where the changes come in. So let’s break it down.

OEM System Builder

The System Builder category includes anyone who buys individual copies of Windows XP to install on new computers. You can go to just about any online software retailer and buy your own OEM copy of Windows XP. (It must be purchased with a “non-peripheral computer hardware component,” for the license to be valid. Qualifying products include memory, internal drives, mice, keyboards, and power supplies/cords.) [Update: The requirement to buy a piece of qualifying hardware is no longer attached to sales of OEM Windows copies. See A welcome change in Microsoft licensing terms for details.] This type of OEM license includes a CD, a Certificate of Authenticity, and a product key, and it requires activation. If you reinstall Windows using an OEM copy sold in this type of packaging, you have to reactivate it. You can activate the initial installation or a reinstallation over the Internet. None of the changes announced last week have any effect on you if you use a single-copy OEM version of Windows XP.

What if you want to build your own white-box PCs and sell them? In that case, you need to buy a package of Windows licenses from an authorized distributor and then use the OEM Preinstallation Kit (OPK) to install Windows. You can customize the installation with extra drivers and applications, and you can even add your own Start menu items and Internet Explorer Favorites. You can build image files for each different type of PC you sell, but for each individual PC you have to include a custom “answer file” that includes a unique value for the ProductKey entry. According to the OPK documentation, “The Product Key that you use to activate the installation must match the number on the Certificate of Authenticity (COA) sticker that accompanies the retail product or that is physically attached to the computer case…”

When your customers turn on the PC for the first time, they go through the Out of Box Experience and accept the license agreement. They don’t have to enter the product key (you already did that) and you can even activate Windows XP for them over the Internet. You are required to provide them with the Windows CD, product key, and Certificate of Authenticity. If they reinstall Windows, they need to use the OEM CD and the key you provided. They can then reactivate Windows over the Internet. None of the changes announced last week have any effect on you if you use an OEM version of Windows XP sold through the System Builder program.

Royalty OEM

Now let’s say you’re in the same league as Michael Dell. You lucky dog – you own one of the 20 largest manufacturers of Windows-based computers in the world. In short, you’re a Royalty OEM. The OPK does a good job of explaining the differences between System Builders,

Royalty OEMs receive a ‘golden master’ copy of Windows from Microsoft. The royalty OEM may customize Windows as described in the OPK, their license agreement, or a signed addendum… These OEMs obtain all customized media, end-user manuals, and bulk quantities of COA stickers from MS authorized replicators.

Royalty OEMs may provide recovery media for each computer, and that media must be protected so that it can be used only on that particular computer. Both printed books and any recovery media display the OEM name and branding.

System-locked preinstallation (SLP) is an anti-piracy technology that helps prevent the copying of legitimately licensed operating system software onto non-licensed systems. SLP is available only to royalty OEMs.

Aha! Now we’re getting somewhere. On a computer put together by a Royalty OEM, the preinstalled copy of Windows (including the recovery CD) contains configuration files that look for specific information in the system BIOS. If they find that information, no activation is required. Royalty OEMs have to provide a Certificate of Authenticity to each customer along with a unique product key (usually printed on a sticker on the side of the PC), but that key isn’t used to activate Windows initially. When you get a new computer from Dell or Gateway or Compaq or any other big PC vendor that uses SLP, no activation is required when you first run Windows, and no activation is required when you reinstall Windows – as long as you start your computer using the SLP CD on the same computer (or one with the same motherboard/BIOS combination).

But what happens to the product key printed on the side of my Dell (or Gateway or Compaq or Toshiba, etc.) computer? Under normal circumstances, it goes completely unused. And there’s the problem. If I’m interested in activating a copy of Windows without paying for it, I can walk into Best Buy, find a display of desktop PCs, and copy down the product keys from the sticker on the side of each one. I can then try using those keys to activate my OEM copy of Windows over the Internet. And until today, that would have worked. But no longer. Now, if I try the same trick, I’ll be unable to activate without calling in. If I’m willing to lie and say that I bought an HP computer but changed the motherboard or flashed the BIOS, I might be able to get away with it. But it’s an extra hoop.

I did some quick searches and have determined that PCs sold by Dell, Gateway, Toshiba, and Compaq all use SLP. Based on the language I quoted earlier from the OPK, I strongly suspect that all PCs sold in the past two years by all of the 20 leading Royalty OEMs also use SLP.

And that means that this change is going to have no effect on legitimate owners of OEM computers who want to reinstall their copy of Windows. As long as they use the CD that came with their PC, installation should be automatic and activation should not be required. The only circumstances under which activation would be required, as I noted in my original post, are if you use the CD on a different computer than the one it was sold with, or if you changed the motherboard or BIOS to one that didn’t match the SLP files.

As I said in my previous post, anyone who tries to turn this change into a major issue simply doesn’t understand how the technology works.

73 Thoughts on “Everything you always wanted to know about Windows Product Activation

  1. Dude, this is all good, thank you for your research into this. However, my laptop did not come with a CD so reinstallation is not possible. How do I legally reinstall now given these product activation changes? I assume I can use my product key from the sticker on the mchaine but where do I get legitimate media?

  2. Can’t you ask whoever made your laptop to provide you with a recovery CD?

    If not, you’ll need an OEM CD to reinstall. If you can find a friend with one of those, your key will work.

  3. Matt on March 4, 2005 at 9:02 am said:

    Windows Anti Windows Product Activation

    http://home.pages.at/cw2k/Antiwpa/

  4. Freqq on April 13, 2005 at 4:03 pm said:

    Many companies with 100-1000 buy from these companies and reimage their PC for standard installs. THIS DOES HAVE A HUGE IMPACT on those of us in this situation.

  5. If you’re buying that many computers, you should be working with a dedicated sales rep who can assist you with purchases of bulk licenses and VL media. The specific products being talked about here are being sold to end users and very small businesses in lots of 1 or 2, with no reimaging.

    There is lots of documentation for this sort of thing. Again, anyone buying PCs in quantity and reimaging them can do a little research and find the right way to do it.

  6. Andrew on May 24, 2005 at 5:13 pm said:

    I hear that when you buy a copy of Windows XP, you aren’t actually buying Windows XP, but you’re buying a license (and thusly the right to use it, so on). Can you use ANY Windows XP CD (with except of course to per se a Dell CD) along with your own key and have a legal copy installed?

  7. Andrew, you’re right on the mark. The media is irrelevant, and you can use any CD you want. What really matters is the license, which for a home user is the Certificate of Authenticity pasted to the side of the PC or included on a piece of paper with the retail box. The activation and the product key are simply enforcement mechanisms for the licensing restrictions. Update: As several subsequent commenters have correctly noted, you can use any CD media you want, as long as it is of the same type as the key you are using. If you have a product key that was originally included with retail media, you should be able to use any retail media. If you have an OEM key, it should work with any OEM media. If you have a VL key, you need to use VL media. You can’t mix and match CD types.

  8. Jesse on June 24, 2005 at 4:54 pm said:

    Want to hear some bull #$%^. I purchased a copy of WinXP Home and installed it. One year later I lost the CD and Activation key during a move. I am planning on completing some major upgrades to my system and my plan was to borrow a friends CD , but use my activation code, therefore it would be legal.
    Since I could not find my key I called Microsoft to see if they could look it up in their records (they must keep it filed somewhere) They would not tell me my own activation code that I purchased for over $100.00 I think this is unacceptable. They informed me that I would need to buy another key. Does this make any sense to you…it didn’t to me.
    Is there anyway to retrieve my CD key???

  9. That’s a bummer, Jesse. I sympathize.

    Actually, Microsoft doesn’t keep records of your specific activation code. Even if you register, you’re simply registering your name and contact info. The key code can be used by anyone, once, and all the activation computer cares about is whether the key is valid and has not been used.

    The activation key is the thing you paid $100 for, and the moral for anyone reading this is, keep it in a safe place!

  10. berrick on July 31, 2005 at 3:46 am said:

    Well, if you just want the COA that can be recovered from registry using utils found on the tinternet.

    But i have a question, if i understand the articale above will it still be possible to save the wpa info to floppy and re use when a restore is carried out provided the hardware replacement rules havent been broken?? If a PC is trashed can the license be transfered by reactivation to a new puter? and as in my case where i have been a bit careless with my original cd’s (i only have one now) how can i work out which of my COA’s will work with it or which cd type do i need. This is going to cause me some pain :(

  11. Seth Weiner on August 12, 2005 at 7:30 pm said:

    We decided to reimage our dells that we bought for the school i work at and since we had already activated windows on them when we first bought them a year ago when we went to activate not a single product key on top of each individual computer worked. We talked to microsoft and they said we need new product key’s for every computer which after reading the EULA i see nothing about reinstalling and reactivating a licensened copy of windows which we paid for. By the way we used the sysprep utility to take the SID’s away off of the image and to prepare it but for some reason microsoft blocked it.

  12. Joel McGregor on September 7, 2005 at 5:00 pm said:

    Contrary to the above posts any XP key will not work with any CD. If you have a retail Gold CD then you have to have a matching key. If you have an OEM SP1a CD you can’t use a OEM SP2 key. I have around 60 computers at one business all with OEM XP Pro. We have at least 3 different series of keys that will only work with the CD they came with. Anyone know how to tell what key will work with what cd? Thanks, Joel

  13. Actually, Joel, you just need to have a CD of the same type as the one that was assigned to your product key. That would be retail, upgrade, or OEM. There is no difference between an SP1a CD and an SP2 CD in this regard, except insofar as the other issues apply.

    As far as I know there is no way to tell what type of CD a particular key is associated with.

  14. Joel McGregor on September 7, 2005 at 6:55 pm said:

    I’ve mainly used OEM cds and I have one in front of me right now that I have a valid OEM key for and it won’t accept it because it doesn’t match the OEM cd I used to install. I first ran across this problem when I tried to use a SP1 image and a SP1a key. Didn’t work. If you know a way around this problem I would be very interested. M$’s solution is figure out for yourself what cd goes with your key and reinstall. I’ve spent 2.5 hrs on the phone with them today. Thanks, Joel

  15. Joel,

    Where did the original CDs come from, and where did the new CDs come from? Are the originals lost?

    I presume you’re not able to get past the initial installation screen where you enter the serial number, correct?

  16. To answer the question about “Can you use any media as long as you have a product key” that answer is NO. For example: If you install Windows from an OEM CD and try to use a retail key it will not work. If you install from a retail CD and try to use an OEM or VL key it will NOT work. Microsoft has three types of media, VLK, OEM, and Retail (upgrades of course). At any rate, this can be very frustrating for users at times. I have been through this first hand lots of times.

    Clint Lawson, MCSA
    Exceleratednetworks.com

  17. R Jenkins on September 10, 2005 at 6:20 am said:

    With PCs from the majority of smaller makers, (i.e. not the ‘Royalty’ class), you will have to re-activate if you do a real re-install by booting from the CD & re-formatting.

    MS tend to get unhappy if you do this more than once or twice even though it’s the original PC and a fully legal copy of Windows.

    The simple way around this is to take an image backup with Norton Ghost or similar immediately after installing Windows & the main programs you use, then if anything catastrophic happens you can restore the backup image relatively quickly and get back to a fully working machine again.

    It saves hours re-installing stuff – and no activation problems no matter how often you do it!

  18. >> MS tend to get unhappy if you do this more than once or twice even though it’s the original PC and a fully legal copy of Windows.

    Not true at all – at least for Windows. You can activate a gazillion times if you do so on substantially the same hardware. And after a certain period of time, the reactivation clock gets reset so you can reactivate on completely different hardware.

  19. Hrm, Ed, I have to disagree with you on this one. Let me start off by saying that I work with about a hundred system on a daily basis. Every one of these systems has a legally obtained key. Now, see, the kicker is that these systems have one or two cards swapped in and out of them a few times a day for various reasons. I have observed two identical systems (and I mean identical; down to the same batch on the motherboard and processor) with the same card produce two different results.

    System 1: Add PCI card. Add drivers. Reboot. Continue using system.
    System 2: Add PCI card. Add drivers. Reboot. WPA triggers.

    I spent way too many hours with microsoft support trying to find a workable solution. They, of course, won’t give me any substantial hints as to what I can reliably and safely change.

    After spending a couple thousand collective hours (myself + all the others here) dealing with this, I’m seriously looking for alternatives. I’ve already converted quite a few of these systems over to linux; the only reason I have any windows systems left in here at all right now is because of some of the tool requirements.

    It’s frustrating. On one hand, I know just how much piracy goes on. It’s nothing new; I’ve watched it for the last 15 years. On the other hand, I am sick of companies throwing poorly thought out and/or buggy software out the door and then having the audacity to tell me that I have to waste my valuable time talking to a computerized phone service to fix their mistakes.

    What really gets me, though, is the abuse I’ve taken from MS activation teams. I mean, seriously, I’ve got a license here for quite a large number of systems. I’ve been calling and re-activating these things for a couple of years now with the same key, with the same reason every time – and I still get harassed by these “support” personel.

    Arrrgh. Don’t mind me, I’ll just sit over here in the corner and rip out what little is left of my hair.

  20. Windows Installation probles.

    Please help me if possible, i bought a pc a couple of years ago from a major pc retailer and the Packard Bell machine came with Windows XP Home pre-installed. When i started the pc for the 1st time it asked me to create system backup disc.
    I created these discs and did a formatt but i found that the orinigal Windows XP was still on my system taking up HDD space.
    I want to do a full destructive re-install of Windows but cant find out how to do it with these discs i can’t get into microsoft recovery console.
    If i get a Windows xp home cd will i be able to reinstall windows from that and use my key or do i need to figure out a different way to completely wipe my HDD and reinstall Windows.
    thanks in advance for you relies/help

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