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A sneaky change in Windows licensing terms

By Ed Bott | October 11, 2006, 6:03pm PDT

Summary

Microsoft just released the licensing agreements for Windows Vista, and I read them carefully. Buried in the fine print is a dramatic change in licensing terms from the Windows XP versions. Think you can transfer a retail Windows license to any machine you want? Think again.

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Ed Bott

Ed Bott

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications. He's served as editor of the U.S. edition of PC Computing and managing editor of PC World; both publications had monthly paid circulation in excess of 1 million during his tenure. He is the author of more than 25 books on Microsoft Windows and Office, including the recently released Windows 7 Inside Out.

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Update 2-Nov: In response to complaints from enthusiasts, Microsoft revised the terms of its license agreement. For more details, see "Microsoft changes Vista license terms." 

Update 16-Oct: For additional information about the new Windows Vista retail license, see "Get facts, not spin, about Vista's new license."

I've seen several sites point to Microsoft's new Software License Terms page, which contains PDF versions of the license agreements for many Microsoft products. Most sites that have commented on the new Windows Vista licenses have picked up on this blurb from the Windows Vista Team Blog:

Two notable changes between Windows Vista license terms and those for Windows XP are: 1) failure of a validation check results in the loss of access to specific features (this is the SPP news you’ve likely been reading about this past week); and 2) an increase in our warranty period from 90 days to 1 year, which brings Windows in line with most other Microsoft products.

I read through the license agreement for Windows Vista Home Basic, Home Premium, and Ultimate (PDF) and saw lots of new language. Much of it just formalizes what Microsoft has been doing under separate agreements for some time, such as the Validation requirements introduced with Windows Genuine Activation.

But I have yet to see anyone point out one significant change in retail licensing terms. Think you can transfer that retail license to any machine you want? Think again. In Section 2, "Installation and Use Rights," the text reads:

Before you use the software under a license, you must assign that license to one device (physical hardware system). That device is the "licensed device."

Sections 15 and 16, "Reassign to Another Device," and "Transfer to a Third Party," are new. You can go read the exact terms for yourself. The sort version is that you may "reassign the license to another device one time" or "make a one time transfer of the software, and this agreement, directly to a third party." [emphasis added]

That limitation on retail licenses is a remarkable change. Previously, a retail license could be removed from one computer and reinstalled on another with no limits. Now, you get to reinstall one time and one time only.

I looked at the license agreement for Windows XP Professional (PDF) for comparison's sake. The difference is … interesting. Section 1, "Grant of License," says, "You may install, use, access, display and run one copy of the Product on a single computer, such as a workstation, terminal or other device ("Workstation Computer"). Section 4, "Transfer," describes what you can do with the underlying license:

Internal. You may move the Product to a different Workstation Computer. After the transfer, you must completely remove the Product from the former Workstation Computer. Transfer to Third Party. The initial user of the Product may make a one-time transfer of the Product to another end user.

With a retail version of Windows XP, there are no restrictions on the number of times you can transfer the software from one computer to another in your household or office. That's about to change for the worse in Vista, with only one lifetime transfer allowed. It makes the outrageous price difference between retail and OEM copies even more difficult to justify.

Will this affect a lot of people? Not really. Those most likely to be affected are hobbyists who constantly rebuild, replace, and upgrade systems. Presumably, the new two-machine limit will be enforced by Windows Product Activation.

I wonder why this change didn't make it into a press release?

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications.

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Ed Bott

Ed Bott is a freelance technical journalist and book author. All work that Ed does is on a contractual basis.

Since 1994, Ed has written more than 25 books about Microsoft Windows and Office. Along with various co-authors, Ed is completely responsible for the content of the books he writes. As a key part of his contractual relationship with publishers, he gives them permission to print and distribute the content he writes and to pay him a royalty based on the actual sales of those books. Ed's books are currently distributed by Que Publishing (a division of Pearson Education) and by Microsoft Press.

On occasion, Ed accepts consulting assignments. In recent years, he has worked as an expert witness in cases where his experience and knowledge of Microsoft and Microsoft Windows have been useful. In each such case, his compensation is on an hourly basis, and he is hired as a witness, not an advocate.

Ed does not own stock or have any other financial interest in Microsoft or any other software company. He owns 500 shares of stock in EMC Corporation, which was purchased before the company's acquisition of VMWare. In addition, he owns 350 shares of stock in Intel Corporation, purchased more than two years ago. All stocks are held in retirement accounts for long-term growth.

Ed does not accept gifts from companies he covers. All hardware products he writes about are purchased with his own funds or are review units covered under formal loan agreements and are returned after the review is complete.

Biography

Ed Bott

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications. He's served as editor of the U.S. edition of PC Computing and managing editor of PC World; both publications had monthly paid circulation in excess of 1 million during his tenure. He is the author of more than 25 books on Microsoft Windows and Office, including the recently released Windows 7 Inside Out.

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Talkback Most Recent of 354 Talkback(s)

  • So let it be written...
    So let it be done!
    ZDNet Gravatar
    cnfrisch
    10/11/2006 06:47 PM

  • ZDNet Blogger

    Want to try that again?
    Not sure what you mean by that, Carey. However, I do recall you pitching the value of a retail license a while ago for several reasons, including the fact that it allowed multiple installations. No more.
    ZDNet Gravatar
    Ed Bott
    10/11/2006 07:33 PM
  • Final Licensing agreement not yet written
    I have not seen the final RTM EULA for the retail version of Windows Vista...have you?
    ZDNet Gravatar
    cnfrisch
    10/11/2006 08:44 PM

  • ZDNet Blogger

    Follow the links, dude...
    From the *official* Windows Vista Team Blog: "On that note, today MS.com published the retail license terms for Windows Vista..." Follow the link.

    Sounds pretty final to me.
    ZDNet Gravatar
    Ed Bott
    10/11/2006 09:06 PM
  • Agreed, it will be changed, the above is clearly a mistake
    I agree, the EULA will be changed to make it fair for to the customer, like it always has been. What Ed posted and the link are clearly mistakes.

    TripleII

    From SiteMeter, stats on this blog. I have mailed the link many places, so I suspect the exposure will grow. I introduced statmeter just to track this blog.
    http://mostly-linux.blogspot.com/2006/10/part-1-of-4-linux-for-supernewbie.html

    Total 11,533
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    ZDNet Gravatar
    TripleII
    10/12/2006 09:19 AM
  • Mike Cox you're not.
    I agree, the EULA will be changed to make it fair for to the customer, like it always has been. What Ed posted and the link are clearly mistakes.

    The crowd here doesn't usually get subtle sarcasm, you need to lay it on thicker.
    ZDNet Gravatar
    Yagotta B. Kidding
    10/12/2006 03:05 PM
  • The problem...
    with subtle sarcasm is that it does not transferr well in a written medium. I am an affectionado of subtle sarcasm, but I myself was sitting here, wondering if he was serious, or being sarcastic.
    ZDNet Gravatar
    Laurel Raven
    10/12/2006 07:43 PM
  • Laughing Out Loud!
    How true!
    ZDNet Gravatar
    Cardhu
    10/13/2006 03:15 PM
  • Gotta Agree . . .
    No Mike Cox, but still pretty sneaky. That one ALMOST slipped by me . . .
    ZDNet Gravatar
    jlhenry62
    10/16/2006 08:00 AM
  • Odd are...
    You won't be able to read it unless you open the box, and once the box is open, you can't return the software.

    That crap should be illegal.
    ZDNet Gravatar
    BitTwiddler
    10/12/2006 12:52 PM
  • should be illegal
    It is illegal, but crooks don't have to obey the law.
    ZDNet Gravatar
    Ole Man
    10/13/2006 03:38 PM
  • Read Your History
    Anyone who has followed their downward spiral in ethics and morality knows what they will do. They don't need to see an EULA.
    Maybe they're waiting to see how much abuse their used-to-be-customers now-called-users will take before writing the final version?
    ZDNet Gravatar
    Ole Man
    10/13/2006 03:35 PM
  • He's quoting The Ten Commandments movie
    He's quoting Pharaoh from the Ten Commandments.

    See IMDB:
    http://www.imdb.com/title/tt0049833/quotes
    ZDNet Gravatar
    t_mohajir
    10/12/2006 07:34 AM
  • Which bit did you have in mind?
    Was it

    "Harden yourself against subordinates. Have no friend."

    or

    "Do you mean to tell me he would turn the slaves against me?"

    happy
    ZDNet Gravatar
    bportlock
    10/12/2006 08:13 AM
  • I kinda prefer . . .
    The part where Pharaoh is casting out Moses from the kingdom (advance apologies for the bad paraphrasing):

    Let the Name of Fairness be found no more in our EULAs, or other company documents.

    So let it be written, so let it be done
    ZDNet Gravatar
    jlhenry62
    10/16/2006 08:04 AM
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