What’s the Best Way for Me to Buy Microsoft Licensing? Part 1: OEM and FPP Licenses

Microsoft End User License Agreement with magnifying glass

Oct 31, 2013 by Seth Rodriquez

microsoft licensingThere are a variety of ways of purchasing Microsoft licensing. You can buy licensing through retail stores, hardware manufacturers, value-added resellers (such as Mirazon), large account resellers, or from Microsoft itself. So what direction is the best way to go? This series of posts will introduce you to the basics so you can make an informed decision. (And if you’re wondering what exactly a “license” is, you can check out my previous post on software licensing in general here.)

OEM Licenses

The first option you have is to purchase what you need from the hardware manufacturer. This type of license is called an Original Equipment Manufacturer (OEM) license. This is a tempting option if you are purchasing a new PC or server, and there are definite benefits to going this route:

  • Pro: Most of the time the hardware manufacturer will install the product for you.
  • Pro: You can get your hardware and software invoiced on the same bill.
  • Pro: This is the cheapest way to purchase Microsoft licensing.

However, you get what you pay for. It may be the cheapest way to get licensing, but this type of license also has the most restrictive use rights:

  • Con: The license lives or dies with that machine. It cannot be transferred to another device.
  • Con: For most products, there are no downgrade rights. In other words, you do not have permission to install an earlier version of the product. For example, if you purchase an OEM license of Office 2013, you cannot uninstall Office 2013 and install Office 2010 in its place unless you own a separate license for Office 2010.

So for a business owner, most of the time OEM licensing is not the best way to go. You will have to repurchase your Microsoft licenses every time you replace your hardware, and it will be difficult to keep all your machines on the same version of the product since you will be locked into the version that you purchased. Most of the time you should steer clear of OEM licenses.

However, an exception to this is when it comes to Windows licensing. An OEM license is one of the only ways (and the best way) to get a full license of Windows. Volume licensing programs only offer Windows upgrade licenses, which require a full license to already be in place. An OEM license of Windows is a full license, not an upgrade.  The only other way to get a full license of Windows is through a retail, full-packaged product, but that route is more expensive. Which brings me to my next topic …

FPP Licenses

The second option you have is to purchase your licensing from a retail store.  This can be either a physical store or an online store.  This type of license is called a Full Packaged Product license. This is usually the most expensive route to go, but it does have some advantages over OEM licenses:

  • Pro: The license can be transferred from one machine to another. There is no need to repurchase the license when you replace the hardware.
  • Pro: The license comes in a nice, shiny package that makes you feel good about your purchase.
  • Pro: Unlike a volume license purchase, you can buy just one or two licenses.

But there are some definite downsides to this route:

  • Con: If you are buying perpetual licenses (as opposed to subscription licenses) this is usually the most expensive way to purchase Microsoft licensing.
  • Con: Just like the OEM licenses, the FPP licenses do not include downgrade rights to earlier versions of the product.
  • Con: It is difficult to keep track of the license keys since they are printed on a physical package. Unfortunately, these types of packages tend to get accidentally thrown away.

So again, if you are a business owner, FPP licensing is usually not the best way to go. If your business owns five or more PCs, then you should explore purchasing volume licenses. In my next post, I will cover two of the most common volume licensing programs for small and medium businesses.

Microsoft licensing can be confusing, but Mirazon is here to help.  Give a call at 502-240-0404 or send an email to sales@mirazon.com with your questions.


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