Windows Server OEM licensing is cheaper, but not always.


Woody Walton


I commonly encounter partners that buy and then resell Microsoft OEM licensing, especially Windows Server and the Windows Client.   The typical reason for this is usually price, but the ease of purchase also comes into play.  There certainly is a measure of convenience in obtaining a server for instance with a copy of Windows Server 2012 preinstalled, or “with” the server as included media.   As an employee of Microsoft I am always happy when a server is sold with a Windows operating system, but I sometimes cringe when I hear that the version of Windows purchased is not up to the task at hand.

What do I mean by that?  …well as with everything else you what what you pay for.  If all you want is a copy of the current Windows Server operating system installed on the server and you never intend to do anything beyond have that one physical server do its particular job and do not intend to engage in any complex scenarios  (and today rather common ones) than more power to you.  Be warned however that when you or your customer venture into the realm of virtualization, backup, deploying a standardized image, support, and many other areas, the OEM Windows Server License may not be the best value, nor the best price.  Let’s take a  closer look.

If we take Windows Server 2012 Standard edition as an example, you can find it on the internet from varying suppliers for the approximate prices listed below:


Windows Server 2012 Standard Edition (OEM Version):  $778.00

Windows Server 2012 Standard Edition (Open Business Version): $879.00

Basically there is $100 dollars difference in price.   If we are speaking quantities of product that really can up too, right?  Sure,  If your customer needs four server licenses you may save $400 on the front end, but upon a closer examination you may be better served with other licensing options such as with the slightly more expensive open license versions for a number of reasons that I alluded to above.  


To be specific OEM licensing has many limitations:


  • Licenses are non-transferable (to another computer)
  • Licenses expires with the hardware
  • A change of motherboard or processor will deem an OEM license invalid and a new license will have to be purchased as it is similar to changing to a new system
  • There is No upgrade path
  • You will need to keep the COA (certificate of authenticity) and invoice (OEM license is purchased with hardware) as proof of license
  • No on-line tracking
  • No re-imaging rights.  You cannot create custom images and deploy using third Microsoft or third party tools
  • If a license is lost, damaged in fire/flood or stolen, new licenses needs to be purchased as there is no way of replacing those licenses as Microsoft does not keep track of the licenses.
  • Each install has different license key and will need to be activated online. You cannot use a Volume license key to install OEM licenses
  • No multiple language rights
  • Support is the responsibility of the OEM reseller (probably you), not Microsoft.


There are other limitations, some for applications such as Microsoft Office prohibit RDS (Terminal Services installation).   I encourage you to look at the OEM Software Licensing: Rules and Restrictions document that can be found here as it answers the most common questions.


If any of the above limitations are a concern for the customer I would encourage you to look at our volume licensing options.  Another way to combat these limitations and to add additional capability is to attach Software Assurance directly to the OEM purchase.  The customer has 90 days from the purchase date to add Software Assurance.  As a type of Volume License, Software Assurance confers even more benefits that may be useful while addressing the limitations inherent to the OEM license.   This option is more expensive however.

As an aside, it may be useful to know that when you purchase Microsoft OEM or volume licensing, in order to receive revenue credit with Microsoft (and therefore be eligible for rebates and recognition), your purchases must be made through an authorized distributor.  A list of authorized distributors can be found here.








Comments (10)

  1. Windows Server 2012 Standard v Datacentre edition says:

    I'm currently putting a proposal together for a client who want to use virtuaisation and am trying to clarify the licensing.

    From what I gather, 2012 Standard can be used in vrtualisation but when you want to move a VM from one physical server to another, thats fine. But when you want to move it back, strickly this should be done for 90 days otheriwse you breech Microsoft licensing terms.

    With Datacentre edition, there are no restrictions.

    Does this apply to earlier versions of Windows Server such as 2008 R2?



  2. raf says:

    Same thing here in New Zealand. Server 2012 Std OEM goes for $949 while 2012 Std Open License is $1,600.
    With such a difference it is hard to find value in the open license.

  3. Nageena Haleem says:

    Very informative

  4. Jamil says:

    No it does not apply on previous versions of Server

  5. Ashok says:

    what is the ROK ?
    and what the difference between ROK and OEM?

  6. Bemo says:

    Your calculations left out the costs associated with Microsoft audits. Microsoft volume license agreements include a section that obligates the licensee to perform software audits at Microsoft’s request. These audits are very time consuming and require
    the attention of technical staff, accounting staff and management. The labor costs associated with these audits dwarfs any of the numbers you have given here.

    1. Dominik says:

      @Bemo: You’re right on the money there…we’re currently into our second audit from Microsoft in less than 2,5 years, it’s ridiculous…

      I have to be honest, we’re finally evaluating a move away from the MS ecosystem, it’s just not worth the hassle anymore when it comes to licensing.
      It seems like MS really wants to push everything and everyone to the cloud…thank you, but No, thank you.

  7. bobNZ says:

    Hi, so if you buy W2012 R2 Standard OEM do you still get 1 +2 licensing? Eg. can you install 2 x W2012R2 VM’s on your server?

  8. Marian says:

    ROK means Reseller Options Kit – Microsoft OEM server software sell via hardware vendors – HP, Lenovo, Dell, Fujitsu. Licensing rights are same as OEM sells from partners.

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