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OEM Licenses: Restrictions and Best Practices for Providers

OEM licences offer cost savings, but they come with strict rules that service providers must understand. Let's break down the dos and don'ts of using OEM licences for hosted or rental scenarios.

What is an OEM Licence?

  • An OEM licence is a software licence, like Microsoft Windows Server, that comes pre-installed on a new piece of hardware (usually a server).

  • These licences are typically more affordable than retail licences.

  • OEM licences are generally tied to the specific hardware on which they were installed.

Critical Restrictions for Service Providers

  • No Hosting with OEM Licences: OEM licences may not be used to provide any form of hosted services or rentals. This is a non-negotiable restriction.

  • Dedicated Hardware Colocation Only: Clients using OEM licences must supply their own dedicated hardware. They can use this hardware in your data centre (colocation) or purchase it from you, but you cannot rent hardware with OEM Windows Server licences.

  • SPLA Reporting: If you have a server with a pre-installed OEM licence that you want to use for hosting, disregard it and report the Windows Server licence through your Service Provider Licence Agreement (SPLA) as usual.

The Windows 11 Exception

  • Rental Rights Agreement: Windows 11 IoT and Windows 11 Pro are exceptions, allowing you to rent out laptops with these pre-installed operating systems. However, you'll need a separate Rental Rights Agreement with Microsoft.

Additional Resources

Key Takeaways

OEM licences offer cost advantages but come with strict limitations that service providers must understand to avoid licensing violations. Always prioritise transparency with clients and steer them towards appropriate licensing models based on their specific use cases.

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