Windows 8's new licenses: simpler, saner, better

Windows 8's new licenses: simpler, saner, better

System Builder license expanded to cover those who build their own PCs.

by mayur khokhar

Windows licensing has traditionally been a complex affair. Special licenses for enterprises, OEMs, and upgraders all exist, and each license has its own different set of restrictions and requirements.
Some of that complication, however, may be at an end. Ed Bott at ZDNet has taken a look at the new licenses for Windows 8, and they seem to be much simpler and more straightforward than the licenses of old. Even better, the licenses now permit behavior that was historically common but technically prohibited.
Each license now includes a plain-English introductory section, in a question-and-answer format, to explain to users what is and isn't permitted per the license's terms.
Windows 7 has six different kinds of licenses. One of these, the Anytime Upgrade, is used for switching Windows 7 versions, and two of them, the OEM licenses used by large OEMs and the Enterprise licenses used by volume license customers, aren't directly available to end users. This leaves OEM licenses for system builders, retail upgrade licenses, and full retail licenses.
System Builder licenses are substantially cheaper than the full retail licenses. A common practice among PC self-builders is to buy a System Builder license when purchasing PC components, and then use this license themselves. Technically, however, that wasn't permitted per the terms of the license; the System Builder versions are meant to be installed onto PCs that are then sold to third parties.
Windows 8 has five license types available. The major OEM licenses and Enterprise/volume licenses remain essentially the same as ever. Anytime Upgrade will also still exist, to enable switching from Windows 8 to Windows 8 Pro.
The change comes to the retail licenses. Where once there were three kinds, now there are only two: an upgrade license and a System Builder license.
Full retail licenses are gone, and the standard retail license will be a simple upgrade license. This isn't altogether surprising. The vast majority of people buying Windows at retail fall into one of two categories: they either have a PC they wish to upgrade, or they're building a new PC. If they're in the former category, they're almost always already running Windows and hence already in possession of a Windows license. As such, they qualify for an upgrade.
It's the System Builder license that has changed. The System Builder license is still the license that small OEMs will use on the machines that they build and sell. However, it has a new usage right: the Personal Use license. With the Personal Use right, end users can buy a System Builder license and use it on a machine they self-build, or as an operating system installed on its own partition in a dual-boot configuration, or in a virtual machine.
In this way, the System Builder license now becomes a good fit for three usage scenarios that formerly required full-price retail licenses: the self-builder, the dual booter, and the virtualizer. Although pricing isn't yet public, the new System Builder license should, like its Windows 7 predecessor, be substantially cheaper than the old full retail licenses were.
Other differences between licenses over the right to transfer between machines and the question of who provides tech support will remain. Bott will be posting a follow-up examining these issues later tonight.