What Microsoft won't tell you about Windows 7 licensing

What Microsoft won't tell you about Windows 7 licensing

Summary: If you're not a lawyer, the subject of Windows licensing can be overwhelmingly confusing. Over many years of studying this stuff, I have learned that Microsoft has buried much of this information in long, dry license agreements and on sites that are available only to partners. Microsoft hasn't assembled this information in one convenient place, so I decided to do the job myself, gathering details from public and private sources.


Microsoft offers many ways to buy Windows 7. You can buy the operating system preinstalled on a new PC, upgrade an existing PC using a shrink-wrapped retail package, purchase an upgrade online, or build a PC from scratch and install Windows yourself. In each of these cases, you can also take your pick of multiple Windows editions The price you pay will vary, depending on the edition and the sales channel. There are different license agreements associated with each such combination. Those license agreements are contracts that give you specific rights and also include specific limitations.

This might sound arbitrary. Indeed, a common complaint I hear is that Microsoft should simply sell one version of its OS at one price to every customer. That ignores the reality of multiple sales channels, and the fact that some people want the option to pay a lower price if they don't plan to use some features and are willing to pay a higher price for features like BitLocker file encryption.

If you're not a lawyer, the subject of Windows licensing can be overwhelmingly confusing. The good news is that for most circumstances you are likely to encounter as a consumer or small business buyer, the licensing rules are fairly simple and controversy never arises. But for IT pros, enthusiasts, and large enterprises knowing these rules can save a lot of money and prevent legal hassles.

I have been studying the topic of Windows licensing for many years. As I have discovered, Microsoft does not have all of this information organized in one convenient location. Much of it, in fact, is buried in long, dry license agreements and on sites that are available only to partners. I couldn't find this information in one convenient place, so I decided to do the job myself. I gathered details from many public and private sources and summarized the various types of Windows 7 license agreements available to consumers and business customers. Note that this table and the accompanying descriptions deliberately exclude a small number of license types: for example, I have omitted academic and government licenses, as well as those provided as part of MSDN and TechNet subscriptions and those included with Action Pack subscriptions for Microsoft partners. With those exceptions, I believe this list includes every license situation that the overwhelming majority of Windows customers will encounter in the real world.


The table below is your starting point. The license types listed in the columns of this table are arranged in rough order of price, from least expensive to most expensive. For a detailed discussion of each license type, see the following pages, which explain some of the subtleties and exceptions to these rules. And a final, very important note: I am not a lawyer. This post is not legal advice. I have provided an important disclaimer on the final page of this post. Please read it.

[Click image to open full size in its own window]

Although the table above is packed with information, it's not the whole story. Please click through to the following pages for detailed explanations.

Page 2: OEM versions

Page 3: Upgrade versions

Page 4: Full and Volume License versions

Next page: All about Windows OEM versions -->


Topics: Microsoft, Hardware, Legal, Operating Systems, Software, Windows

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  • Wow. Thanks.

    This really clears up Windows licensing for me. I had been wondering about this and everything I could find seemed to be convoluted or written in legalese. Thanks again.
    • why is this so hard?

      This is the single biggest reason to move away from Windows. This should not be this complex or need explaining. It should be immediately obvious to me a consumer or consultant what is required to be legal, I should not have to research this issue, nor wonder if I'm in compliance. Simplicity.. It should not be this much work to know what is required. When a 4 page article is the "amazingly easy" solution to understanding licensing you have a problem. Why make it this hard to buy your products?
      • Ridiculous Comment

        We are all laughing!

        Oh, you didn't mean to be funny?

        All DRM license agreements are this complex (even downloaded music) -- they just are ignored. Microsoft is serious about their product rights so people HAVE to take note.
        • olny a fool

          "only a fool makes things more complicated"

          -Albert Einstein
        • Observe: the ideal licensing representation

          I'm going to show you two pages: one that shows the
          license terms, then one that shows the End User
          License Agree. I'm not so much asking you to read the
          license, but pay attention to it's presentation.

          First page:

          Second page:

          So... so why can't all firms do something like that?
  • thanks . . .


    Sadly, the retail still seems to be a pretty stiff price.
  • RE: What Microsoft won't tell you about Windows 7 licensing

    So, if I have a Mac with retail Vista Ultimate installed
    via BootCamp can I get the upgrade version of 7? Not
    entirely clear about that.
    • Yes

      If you already have a legal copy of Vista installed on any computer (PC, Mac, virtual machine), then you can upgrade it to Windows 7.
      Ed Bott
      • As long as one installs over the top of it and doesn't try to do adual-boot


        (More reasons not to support MS anymore - one can't even do a clean install with an upgrade license without doing a lot of shouldn't-be-necessary steps. And with Microsoft freely promoting piracy in other countries, why should anyone take their anti-piracy measures even remotely seriously, especially in the real world where one BIOS upgrade or video driver upgrade triggers the activation process, like we are a bunch of criminals or something... http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/ (bottom of first page merrily reveals all:

        "Gates argued at the time that while it was terrible that people in China pirated so much software, if they were going to pirate anybody's software he'd certainly prefer it be Microsoft's.

        Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's easier for our software to compete with Linux when there's piracy than when there's not," Gates says. "Are you kidding? You can get the real thing, and you get the same price." Indeed, in China's back alleys, Linux often costs more than Windows because it requires more disks. And Microsoft's own prices have dropped so low it now sells a $3 package of Windows and Office to students."
        ) )

        Even $3 for them and $300 for us. How nice; that free market principle really being the latest "trickle-down" swindle...
        • Oh blah blah blah

          Microsoft sells a $29 copy of Windows to American students. But you are muchmore interested in FUD than facts.
          Ed Bott
          • Well, Ed, that's rude

            MS's predatory tactics are well known; facts are not FUD.
          • Ed is not interested in facts. He just shills for Microsoft. He's ignorant!

            No More Microsoft Software Ever!
          • $29?

            My bookstore sells Windows for around $100, depending on the version.
            Where can I get the $29 set?
          • For students

            Ed Bott
          • A lot of of college students are not eligible...

            You must have an Email address ending in ".edu" to qualify. A great many of colleges don't issue email addresses in the college domain. Mine doesn't.
          • A .edu address is not required

            That is the easiest way to get this offer fulfilled, but there is a specific set of procedures for qualifying if you university does not provide you wath an e-mail adress:

            Ed Bott
          • for students

            there is much better deal for windows 7 professional for $29.00 which I found at Microsoft's Ultimate steal.


            get their development software for free at

          • That's the exact same offer

            Just a different entry point and defaults to Professional instead of Home Premium.
            Ed Bott
          • FAke?

            I hate to say this, but this site looks like a fake. Or am I just too
          • Not a fake

            If you start at the link I provided, you will see that it all sponsored by Microsoft and run by third parties they contracted.
            Ed Bott