How the new Windows 8 license terms affect you

How the new Windows 8 license terms affect you

Summary: What's changed in Microsoft's radical new license agreements for Windows 8? I've got full details about how you can transfer Windows to a new PC, downgrade rights, and who qualifies for upgrades.

TOPICS: Windows, Legal, Microsoft, PCs

I’ve had a chance to inspect the new, radically revised Microsoft license terms in advance of their October release. Earlier this week, I noted the two big surprises: All of the agreements are written in plain language that’s surprisingly easy to understand, and Windows 8 will, for the first time ever, include a new Personal Use License that explicitly permits retail customers to install and run OEM System Builder software. The overpriced full package products will not exist for Windows 8.

The new language in these agreements really is simpler than in previous editions. But there are still areas where confusion can arise. To forestall that confusion, I decided to put together a more comprehensive look at the new license agreements.

I have spent two full days going through these documents line by line, comparing them to each other and to the corresponding Windows 7 versions. I’ve also been listening to your questions, several of which are incorporated here.

If you are interested in details of how to transfer a Windows 8 license between PCs, see page 2 of this post. Page 2 also contains details about the rules for installing Windows 8 in a virtual machine and about downgrade rights.

This post is based on the contents of three new documents with the following headings:

  • MICROSOFT SOFTWARE LICENSE AGREEMENT (aka Personal Use License for System Builder, referred to in this post as “PUL”)

I looked at Windows 8 and Windows 8 Pro versions of each license agreement.

Two additional documents are related, but not included in this analysis. I have not yet determined whether there are changes to the terms that System Builders must follow when assembling a PC for resale. Nor have I been able to examine final versions of the product use rights that apply to Volume License editions of Windows 8.

The information in this post covers the vast majority of circumstances that consumers and small businesses will encounter when buying and deploying Windows 8.

Just what is a Windows license?

In the broadest terms, a license agreement is a contract between you and Microsoft Corporation (if you purchased the software and installed it yourself) or between you and the computer manufacturer or software installer that purchased Windows 8 from Microsoft and then installed it on a computer you purchased. The agreement describes your rights to use the Windows 8 software and any Windows apps that are included with Windows 8.

Your proof of license for a PC you purchase with Windows already installed consists of all of the following elements:

  • A genuine product key;
  • Successful activation of the software;
  • An authentic Windows label such as a Certificate of Authenticity (COA), which must be affixed to the computer or appear on the manufacturer’s or installer’s packaging or peripherals when purchased; and
  • Proof of purchase from a supplier of genuine Microsoft software.

For software you purchase in a physical package, the proof of license is “the genuine Microsoft certificate of authenticity label with the accompanying genuine product key, and your proof of purchase.”

For downloads from Microsoft or an authorized reseller, the proof of license is “the genuine Microsoft product key … you received with your purchase, and your proof of purchase from an authorized electronic supplier of genuine Microsoft software.”

What are the differences in the license agreement between Windows 8 and Windows 8 Pro?

The basic terms of the license agreement are identical between Windows 8 (the base version) and Windows 8 Pro. I found only three substantive differences: Restrictions for Client Hyper-V (a Pro-only feature) are in the Pro agreement and not in the base version. You can run Windows 8 Pro on a PC with two physical processors; Windows 8 is limited to a single CPU (although the number of cores is unlimited). And Windows 8 Pro supports Remote Desktop as a client and server, whereas Windows 8 is a Remote Desktop client only.

In the case of PCs purchased with Windows 8 Pro preinstalled by the OEM, downgrade rights are available. See page 2 of this post for details.

What PCs are eligible for a Windows 8 upgrade?

Upgrade software typically costs less than the fully licensed System Builder versions, reflecting the fact that you have already paid, directly or indirectly, for a previous Windows license. Although Microsoft has not announced final Windows 8 pricing, it's reasonable to assume this will continue to be true.

Your PC qualifies for an upgrade if it has a valid license for Windows XP, Vista, or 7. If the PC came with any edition of Windows XP or Windows Vista or Windows 7 and has a certificate of authenticity sticker affixed to it, it’s eligible for a discounted upgrade. (From October 26, 2012, through January 31, 2013, the upgrade price for Windows 8 Pro, purchased directly as a download from Microsoft, is $40. That price includes a separate download of the Media Center Pack, which will subsequently be a separate purchase.)

Microsoft has not announced pricing for System Builder editions, nor has it hinted at what the cost of upgrades will be after the initial promotion ends on January 31, 2013.

Note that upgrade eligibility has nothing to do with the operating system currently installed on the system when you go to perform an upgrade. If you have a previous Windows 8 preview version installed, that doesn’t confer any upgrade rights. That sticker on the side of the PC (or the CoA, if you installed a retail version) is the most important factor in defining the underlying license.

After I upgrade, can I use my old Windows version on a separate partition or on another PC? Can I give it away or sell it?

No. The upgrade replaces the old license completely. The terms are written in very clear language:

The software covered by this agreement is an upgrade to your existing operating system software, so the upgrade replaces the original software that you are upgrading. You do not retain any rights to the original software after you have upgraded and you may not continue to use it or transfer it in any way. 

Can I transfer my copy of Windows 8 to another PC?

That depends.

Continued on next page —>

Topics: Windows, Legal, Microsoft, PCs

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  • Price for the upgrade

    Got the email "Windows Upgrade Offer Registration is Available" 2 days ago. In the link , it reads that the price for the upgrade to Windows Pro is $14.99, provided the following eligibility requirements:

    "Eligibility Details

    The offer is for customers (e.g. Home users, students, and enthusiasts) who purchase a qualified PC. A qualified PC is a new PC purchased during the promotional period with a valid Windows 7 OEM Certificate of Authenticity and product key for, and preinstalled with:

    Windows 7 Home Basic;
    Windows 7 Home Premium;
    Windows 7 Professional; or
    Windows 7 Ultimate.

    The promotional price is limited to one upgrade offer per qualified PC purchased, and a maximum limit of five upgrade offers per customer."
    • Separate program

      That $15 product is a discounted upgrade for customers who buy a Windows 7 PC during the time after Windows 8 was announced but before it shipped.

      The upgrade for the general public is a separate offer.
      Ed Bott
      • The usual M$ Byzantine labyrinth of horsecrap

        Only designed to confuse the public. And Ed Bott's here to justify it.
        Cylon Centurion
        • Hmm

          I don't see how it's confusing?
          Just lie and get your cheap Windows 8..
          Thomas Howl
    • You cannot TRANSER without going through the whole activation process

      I totally disagree with Microsoft on this issue.

      Microsoft should let people transfer the license without activation if your not sharing the license BUT THEY DON"T.

      I have a sata dock like many people. One hard drive installed with Windows 8. I turn the pc off and replace the pc. Now when I boot the new PC I'm faced with activation.

      I'm not sharing the license, I don't have two pc's on using the license at the same time.

      I'm assuming this isn't going to change so my plans on buying Windows 8 for my family and relatives have changed.

      If Microsoft can't detect two pc's on at the same time using the same license it shouldn't be taken out on the consumer.

      If Microsoft CAN detect two pc's on at the same time using the same license it should be ashamed of itself for making people go through the activation process.

      Windows 8 is the best OS to date from Microsoft however this license issue needs to be addressed for the consumer.

      If one PC is off and the other is on, it isn't sharing a license, therefor consumers shouldn't be faced with activation time consuming processes. A pc that is turned off is not using any license, any power, nothing.
  • To wit...

    It seems the only users left out-in-the-cold, so to speak, from my understanding, are people that purchased Windows 7 Starter Edition (of the Windows 7 license holders).
    • You're confusing two programs

      The mailing you got is for the $14.99 upgrade available to anyone buying a new PC today with Windows 7 preinstalled.

      The $40 upgrade offer that will be available in the fall is different.
      Ed Bott
      • Is there a Family Pack Option

        I have 1 desktop and 2 laptops with Windows 7 Home Pro installed, and would like to upgrade all 3 to Win 8. Is there a family pack option, or do I have to buy 3 separate $40 upgrade licenses?
        • No Family Pack

          If you recall, the Family Pack was $150 for three licenses of Home Premium.

          This is $40 each for Windows 8 Pro, the higher-priced SKU. So a better deal all around.
          Ed Bott
          • Thanks, Ed!

            That's what I thought. I'll still upgrade all 3, as I found the battery life for the laptops and the performance of all three devices have improved under Windows 8.
  • Maybe Ed could shed some light on this, then...

    Since Windows 7 Starter Edition customers are seemingly ineligible, why then should those that chose to not upgrade to Windows 7 but held onto older versions be held in higher regard?
    • It will be eligible for the 40$ upgrade

      As far as I know, there is not distinction for the Windows 7 editions for the 40$ upgrade, also any XP and Vista editions can upgrade.

      Starter is excluded from the 14.99$ upgrade offers to people buying Windows 7 computers starting in July.

      Anyway, Starter was netbook version and a lot of netbooks only have 600 line of screen resolution which is below the Windows 8 minimum of 768 lines.
    • Spreading FUD! Where do you get that 'seemingly ineligible' from?

      Wording does not distinguish between consumer versions.
  • Downgrade rights...

    Lets say I have 3 machines with Windows XP. For arguments sake lets call it the home version.

    I buy 3 copies of the Windows 8 upgrade package. (The one that will be on special at $40)

    Can I then use that Windows 8 upgrade package to request downgrade rights to say Windows 7.

    In other words, use the Windows 8 promotion as a cheap mechanism of getting 3 copies of Windows 7.

    Also when downgrading from Windows 8 Pro which version do you get - Win 7 Ultimate? Win 7 Pro? Win 7 Home?

    Thanks for any help provided :)
    • Yes but ...

      Licensing looks Ok ... but I think you will trip up here:
      "Neither the manufacturer or installer, nor Microsoft, is obligated to supply earlier versions to you."
      My guess is nobody will supply the earlier OS, or will do so at an unattrictive price. I'd find a willing supplier before starting.

      Upgrades are focussed on the PRO version, including media centre I believe.
      • You can get a disk from anywhere

        If you have one lying around, you can use it. You can download it from TechNet or MSDN.

        Those exact same terms have been associated with downgrade rights for a decade. Nothing has changed. Loosen the tinfoil...
        Ed Bott
        • We've disagreed here before :-(

          1. If you have one lying around. Well this poster doesn't - he's got XP and a W8 upgrade.

          2. If someone else has one lying around you cannot use it. Either ...

          a. It's their OEM disc which can only (license-wise) be used on their specific machine (and if they have 10 DELL PC's then they may have 10 disks, each of which can only be used on the corresponding PC!).

          b. It's from MSDN or Technet ... which may ONLY be used on test machines, and where MSFT have explicitly tightened up of late to prohibit installation on home computers (you blogged the details!) ... and which this poster did not say he had subscribed toward.

          NOTE: the MSFT document EXPLICITLY STATES "manufacturer or installer, nor Microsoft" ... it does not say borrow a disk from any friggin' where.
          If you want to go on record as saying MSDN and Technet subscribers can loan their downloads to 3rd parties, providing they check the 3rd parties' license compliance ... then be my guest!

          c. Its a volume license disc ... which are for businesses. This poster seemed to be a consumer.

          Re-tightens tinfoil, much tighter this time.
          Suppose I did 'obtain' a Windows 7 Pro x64 ISO from Technet ... how precisely would I activate Windows 7 on my 2 year old DELL PC?
          Surely the ISO would be the vanilla version, lacking the embedded OEM certificates to make it a DELL, HP, LENOVO, ... whatever?
          • I have answered this repeatedly in the past

            Use your favorite search engine and look for my name plus "downgrade rights."

            Your COA for a business edition of Windows is your proof of license. You have to phone in to activate the downgraded installation. Anyone capable of doing a downgrade almost certainly has installation media available or can get it. Downgrade rights are primarily intended for businesses, which have IT staffs that do this stuff all the time. For consumers, it's obviously more of a tech challenge but not insurmountable.

            However, it's pretty clear from your entire posting history that you want everything to prove how evil Microsoft is. So go for it.
            Ed Bott
          • What a wanker! Spend the money wisely up front

            You lost your old version, you lose! Take more care next time.

            Disks or brain cells, it's all the same process!

            "You must obtain the earlier version separately."
            That does not mean you can downgrade to a version for which you did not have any right to use in the first place.

            The main reason anyone wants to use an older version is because they are ALREADY using it and do not want to risk disrupting current processes.

            This highlights that if one wants to have resilience, one is better not running critical processes on exotic hardware, or at least making the exotic parts external, so that they can be transferred to newer generic computers.

            The best option for an individual is to build your own computer and buy a retail OS pack, which you can legally transfer to whatever future hardware you like. If running critical software that is reliant on a particular OS version, skimping on how you buy that version is false economy, as the time and money involved in remedial action blows the savings out of the water. Think of it as insurance. Upgrades to a retail pack endow the same transfer rights as that original retail pack (unless explicitly taken away).

            Basically, with critical software, don't skimp. And if you do skimp, don't expect anyone to save your butt.
          • Buying one set of upgrade disks, then others online

            With the basic proviso of being cautious, to upgrade our PCs, I am buying one retail upgrade package so I have a set of physical disks, and the rest online.

            That way I don't have to download anything. The online process will just furnish me with product keys for the additional licences.

            Overall, an extra $30 for recognisable disks instead of handscrawled ones or some file stowed away on the NAS box, both likely to be accidentally purged on some cleanup exercise in the future.