What's the licensing difference between OEM and Retail versions of Microsoft Office?

Office 2003 OEM Front Cover Office 2003 OEM Back Cover

OEM Packaging - Front and Back Covers

If you start Word, Excel, Powerpoint, or Outlook on two machines (assuming the same version of Office), one with retail Microsoft Office versus the other with OEM Microsoft Office, you will have a tough time differentiating between the two.   Aside from packaging differences, functionally speaking, they are the same.  So the question becomes, should I purchase Retail or OEM versions of MS Office?

OEM Software

Advantages:  OEM or Original Equipment Manufacture Software is bundled with the PC.  When you go to Dell.com, Lenovo.com, or Hp.com (to name a few), you can purchase Office Software along with the PC, for much less than buying Retail Office Software at Frys, Office Depot, or Internet Retailers. Office 2003 and 2007 Professional costs an average of about $369 when purchased with a PC, compared to about $500 for a retail boxed Office 2003/7 Professional.  Some Internet retailers, you may find (such as newegg.com and so called software clearance websites), offer OEM software - not only Office Suites, but Operating Systems, and Antivirus Suites.  The buyer should carefully weigh the advantages and disadvantages of buying OEM software versus retail boxed product.

Disadvantages: This software is licensed to the PC, not the user.  This means when the PC dies, (and you don't have the PC repaired to working condition), the Software DIES with the PC.  It cannot be transferred to a new PC which you may purchase later.  It can only be installed on the original PC.

For support issues (say you have difficulties creating labels) you have to contact your PC Manufacturer.

Office 2003 OEM Back Cover

retail software

Retail software is boxed product, which you buy separate from the PC.  As previously noted, some Internet retailers and big box stores sell OEM software, so you should carefully check the advertising claims and packaging to determine you are buying the intended software.

Advantages: In general, retail software can be transferred to a new computer.  However software vendors, including Microsoft, do have limitations on the transfer of software.   You should read the license agreement.  It's the fine print you whiz past when you are installing new software.  A copy of Microsoft Licensing for business and home products can be found at the Microsoft Licensing website.

With Office 2003 Professional and 2007 Professional, the retail product can be installed on one desktop and on one laptop computer.  Consult the website listed to insure this applies to your version of Microsoft Office.

For software support issues you may contact Microsoft.

Note that Microsoft Academic versions, such as Office 2003 Student Teacher Edition have different licensing terms!  

sidebar: Windows XP - OEM or Retail?

Windows XP Professional Upgrade Retail

With the tentative date of June 30, 2008, Microsoft will discontinue the sales of Windows XP.   If you are considering stocking up on a few licenses for future PC purchases (downgrading from Vista to Windows XP) a $299 retail version of Windows XP Professional (normal, commercial, retail, not upgrade or acadamic) can be transferred to another PC.  In otherwords, say you buy a new HP in July 08 after all XP has gone away, you can downgrade that PC, and in 2011 you replace that PC and you downgrade Windows Vista (or Windows 7) to XP, the Operating System can be transferred to the second and third PC replacements successively, as long as Windows XP is removed completely from the prior PC.  The caveat to this is driver availability for Windows XP in 2011 remains an uncertainty.

In contrast, buying the OEM version of Windows XP Professional can only be installed once.  See Paragraph 4, in the Windows XP Professional's EULA (downloaded from Microsoft in March 2008).   Be sure to check Microsoft's licensing portal for any updated or changed terms.