ExtremeTech has a fairly ho-hum article on how to build a Windows Home Server. (They basically propose using off-the-shelf PC parts and claim they’ve duplicated the functionality of an HP MediaSmart Server. Well, except that it’s twice as big. And it needs a monitor and keyboard, unlike the headless HP box. And it doesn’t have the slide-in-slide-out hot-swappable drive bays or the useful front-panel status lights. Ahem.)
But this line had me shaking my head:
Windows Home Server (WHS), released this fall as an OEM product—which you can buy at NewEgg and other sites as long as you buy one other minor hardware item—addresses the need to “open up” our home networks. [emphasis added]
They have a variation on this statement one page later:
You can buy the OEM version of Windows Home Server at sites like NewEgg.com, as long as you buy one other piece of hardware. [emphasis added]
You’d think a site that publishes build-your-own-PC articles every month would know the rules of OEM software by now, but apparently they don’t. I read this same mistake at other sites that should know better at least once a month. The trouble is, this hasn’t been true for more than two years!
I’ve written this before but I guess it needs repeating occasionally: Microsoft changed the rules for its System Builder OEM program in 2005, eliminating the requirement to purchase a piece of hardware and specifically allowing end users who are building or refurbishing a PC to purchase a single copy of an OEM license.
And yes, you can legally purchase an OEM copy if you intend to build a single PC or server (including Windows Home Server), for yourself or for someone else. I first wrote about this on August 30, 2005, in which I quoted from the official Microsoft OEM agreement:
OEM system builder software packs are intended for PC and server manufacturers or assemblers ONLY. They are not intended for distribution to end users. Unless the end user is actually assembling his/her own PC, in which case, that end user is considered a system builder as well.
So can we please stop spreading the myth that you have to buy a 99-cent cable with your $200 copy of Windows? It’s not true.
Ed Bott 
It would help if Microsoft itself would stop making confusing statements. How is a person supposed to interpret this?
http://blogs.msdn.com/mssmallbiz/archive/2007/08/01/4177790.aspx
Yeah, Vic, I’ve seen that and it pisses me off too. He’s leaving off the very first clause in the license agreement, which is section 1:
AUTHORIZED DISTRIBUTION AND ACCEPTANCE. Distribution of individual software licenses or hardware units contained in this Microsoft System Builder Pack (“package”) is not authorized unless you accept this license. You accept this license when you open this package. By accepting this license, you agree that you are a system builder. If you do not open this package, you may deliver it to another system builder. [emphasis added]
And as noted earlier, anyone can become a system builder. You don’t need to register, you just need to build or refurbish the system, as the remainder of section 1 makes clear.
This is, however, something Microsoft doesn’t necessarily want to admit and it’s also much more complex than a simple black and white statement like the one you quoted.
To add further confusion, on the two Vista OEM copies I’ve purchased, when I called Microsoft tech support for clarification, I was explicitly told that if I changed one piece of hardware on the system, I would have to buy another license altogether, which, Ed, you’ve told me is not true.
So who’s fault is it that consumers are confused on Vista licensing? It seems that Microsoft is deliberately leaving far too many terms in the EULA up for interpretation over clarity. A series (or table) of IF/THEN statements could help consumers — and bloggers — understand it.
Compared to Apple’s OS X license, this is yet another reason so many people are tired of Microsoft’s games.
Yes, Zaine, no question that the license terms can and should be clarified. And why would you call tech support to ask about a software license? Tech support doesn’t hire people with law degrees nor does it train them to interpret license agreements. Their job is to help you resolve technical issues. You should be able to get accurate information by calling the activation support line.
And the rules of activation for OEM copies are not just what I’ve told you, Zaine, it’s what I’ve documented over and over on this site.
As for comparing it to Apple’s OS X license? Please…
You can only install Apple software on hardware manufactured by Apple. In fact, you can only purchase a full copy of OS X WITH hardware manufactured by Apple. And you can’t swap out the motherboard or build your own system or do any of the things that you can do with any other operating system that runs on the Intel platform.
The title of your post suggests that people who think one has to buy the 99¢ cable to qualify are stupid and unenlightened.
“Tech support doesn’t hire people with law degrees nor does it train them to interpret license agreements. Their job is to help you resolve technical issues.”’ Sure, but if the agreement was SIMPLE, a law degree wouldn’t be required!
Isn’t the essence of the PC revolution about becoming autonomous—not forced to suffer layers of stupid bureaucracy? The day of this legalistic crap should have long passed.
Retailers are not attempting to clarify the matter. I’ll bet their profit margin on the retail product is far higher than that of the OEM version. Furthermore, until recently, most OEMs were not even shipping restore disks and not making them easily available. Burning your own rescue disks does not qualify as ‘easily available’.
Microsoft, how about eliminating all price distinction between retail and OEM products with one price for all users? Offer a separately-priced agreement for helpline support. It’ll never happen until it’s too late.
Dan,
“The title of your post suggests that people who think one has to buy the 99¢ cable to qualify are stupid and unenlightened.”
No, it does not. It suggests that professional journalists employed by big dead-tree media companies should be able to get basic facts right, especially when they are offering advice to hundreds of thousands of readers.
Otherwise, I agree with you that it would be a wonderful world if all this licensing stuff were simplified. But there are many reasons, some of them imposed by U.S. and European courts, why that can’t happen soon.
You said, “In fact, you can only purchase a full copy of OS X WITH hardware manufactured by Apple.”
That’s not true. Anyone can go and buy a copy of OS X without owning hardware manufactured by Apple. And since Leopard was released, anyone can buy a copy of OS X that will run on Intel Macs without owning hardware manufactured by Apple.
I said “buy,” not “use.”
The rest of what you said was true.
I think the problem that I have encountered with regards to selling OEM versions is that businesses do not realize that you can simply transfer the system builder license to another system builder, provided that the box is unopened (such that the system builder license notice is still intact).
What is not permitted is when some retailers open the system builder pack (brown box with system builder license sticker) and sell just the DVDs. You can get single license (1-pack) system builder boxes, obviously it is easier or cheaper to buy the multipack then sell them individually (which is contrary to the system builder license).
Once the box is opened, the OEM software must be preinstalled on a COMPLETE system – not that silly “small piece of hardware” nonsense. I would guess at least 95% or retailers I have seen do not understand the difference or are completely unaware that the OEM license terms were changed in 2005.
I just found a graphical version of the OEM system builder license for people who cannot understand the actual license document.
http://oem.microsoft.com/downloads/mosb_productguide/licensing/packaging.htm
Even I can understand that!!
Actually, Ed, I believe this IS true. I’ve never once been able to go to NewEgg and buy something I really need (like the OEM license) without impulse-buying some gadget / gear / upgrade I didn’t really need. 😉
It’s no wonder people are confused when Microsoft only publicly publishes the System Builder requirements in legalese (in the license itself). You may interpret the license differently from Microsoft, which has these interpretations found on the OEM Partner Center website (requires a free account to view):
http://oem.microsoft.com/script/contentPage.aspx?pageid=563841
“Microsoft retail software licenses are the appropriate licenses for the do-it-yourself market. OEM System Builder software is not intended for this use, unless the PC that is assembled is being resold to another party.”
“Use of OEM System Builder software is subject to the terms of the Microsoft OEM System Builder License. The software is intended for preinstallation on a new personal computer for resale.”
Also, “OEM System Builder Software
Must be preinstalled on a PC and sold to another unrelated party…
Cannot be transferred from the PC on which it is preinstalled…
Must be preinstalled onto a new PC using the OPK.”
“If you are distributing the PCs within your organization, you can’t grant the end user license terms to yourself.”
It took me hours of searching to find this information. So why doesn’t Microsoft write this interpretation everywhere? You are at odds with Microsoft if you intend to install an OEM license on your own PC.