A sneaky change in Windows licensing terms

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.

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?