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What is the Difference Between OEM and Volume Licensing?

OEM vs Volume Licensing

  • OEM Licensing is tied to specific hardware, allowing only a single installation, with support provided by the hardware manufacturer.
  • Volume Licensing allows multiple installations across devices, offers transferability between machines, and comes with support directly from the software developer, such as Microsoft, making it ideal for larger organizations.

Understanding the different types of software licensing can be a complex task. Two common types of licensing that are often confused are Original Equipment Manufacturer (OEM) and Volume Licensing.

Understanding OEM Licensing

Understanding OEM Licensing microsoft

Original Equipment Manufacturer (OEM) Licensing is a specific software licensing agreement that binds the sale of software with designated hardware.

This arrangement is common in the computer industry, where manufacturers pre-install software, such as an operating system, on computers before these products reach the end users.

Key Features of OEM Licensing

OEM Licensing is characterized by a few critical features that differentiate it from other types of software licensing, such as volume licensing.

These features cater to specific scenarios and have implications for hardware manufacturers and the end-users.

Here’s a detailed look at these key aspects:

  • Tied to Hardware:
    • An OEM license is intrinsically linked to the hardware it was originally installed on.
    • This means the license is valid as long as the hardware is operational. In the event of hardware failure, the software license expires and cannot be legally transferred to a new or replacement machine.
  • Single Installation:
    • OEM licenses are designed for a single installation on a piece of hardware.
    • This restriction emphasizes the one-to-one relationship between the software and its corresponding hardware, limiting the software’s use to that specific device only.
  • Support:
    • Unlike volume licensing, where the software developer provides direct support, support for OEM-licensed software typically comes from the hardware manufacturer.
    • Any software-related issues must be addressed through the manufacturer’s support channels, including troubleshooting, updates, and warranty claims.

OEM Licensing offers a cost-effective way for consumers to purchase new hardware with installed essential software.

However, the restrictions on transferability and the source of support are critical considerations for buyers, especially in planning for long-term use and potential hardware upgrades.

Understanding Volume Licensing

Understanding Volume Licensing

Volume Licensing represents a specialized service offered by software giants such as Microsoft, tailored specifically for businesses, charitable organizations, and educational institutions.

This approach enables these entities to purchase software licenses in bulk, thereby availing of significant discounts compared to the retail purchase of individual licenses.

Key Features of Volume Licensing

Volume Licensing stands out due to its distinct advantages, especially for larger organizations that require extensive software deployment across numerous devices. Below are the pivotal features that make Volume Licensing a go-to choice:

  • Multiple Installations:
    • Volume Licensing breaks away from OEM (Original Equipment Manufacturer) licensing constraints, which typically ties a software license to a single device.
    • This flexibility allows organizations to deploy the software across various machines, aligning with their operational needs and scale.
  • Transferability:
    • A standout feature of Volume Licensing is transferring licenses from one device to another.
    • This flexibility is crucial for organizations during hardware upgrades or replacements, ensuring a seamless transition and continuous operation without additional license purchases.
  • Support:
    • Software developers such as Microsoft directly manage the support and maintenance of volume-licensed software.
    • This ensures that organizations have access to comprehensive support services, including updates, security patches, and technical assistance, directly from the experts who know the software best.

By leveraging Volume Licensing, organizations can reduce their software expenditure and enjoy a higher degree of flexibility and support, ensuring their operations are efficient and up-to-date with the latest software advancements.

OEM vs. Volume Licensing: The Differences

OEM vs. Volume Licensing

Now that we understand what OEM and Volume Licensing are let’s delve into their key differences.

  1. Hardware Dependency: OEM licenses are tied to the hardware they were originally installed on. In contrast, Volume Licenses are not hardware-dependent and can be transferred to other machines.
  2. Number of Installations: OEM licenses allow for a single software installation, while Volume Licenses allow multiple installations, making them a more flexible option for larger organizations.
  3. Support: Support for OEM-licensed software is usually provided by the hardware manufacturer. On the other hand, the software developer typically includes support for Volume Licensed software.
  4. Cost: OEM licenses generally are cheaper than Volume Licenses. However, the price per license can decrease with Volume Licensing if many licenses are purchased.
  5. Software Updates and Upgrades: Volume Licensing often includes Software Assurance, which provides access to software updates and upgrades. OEM licenses do not typically contain this feature.

Conclusion

Choosing between OEM and Volume Licensing depends on your organization’s specific needs. OEM licensing may be a cost-effective choice if you’re a small business with a few machines.

However, if you’re a larger organization needing to install software on multiple devices, Volume Licensing could provide more flexibility and potential cost savings.

Remember, it’s essential to fully understand the terms and conditions of any licensing agreement before making a decision.

If you need further assistance navigating the complexities of software licensing, consider seeking advice from a licensing expert.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.

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