OEM vs Retail vs Volume Licenses: What’s the Difference?

Confused about OEM, Retail, and Volume licenses? When buying Microsoft software, these three licensing types offer very different rights, restrictions, and pricing—but the differences aren’t always clear.

Choosing the wrong license type can cost you money, limit your flexibility, or even cause compliance issues. In this guide, we explain each license type and help you pick the right one.

What Is an OEM License?

OEM stands for Original Equipment Manufacturer. These licenses are designed to be pre-installed on new computers by manufacturers like Dell, HP, or Lenovo.

Key Characteristics:

• Tied permanently to the first computer it’s installed on
• Cannot be transferred to another machine
• No installation media included (digital download only)
• Limited support directly from Microsoft
• Cheapest option available

What You Get:

• Full version of the software (Windows, Office, etc.)
• Digital license tied to hardware
• Basic functionality identical to retail versions

What You Don’t Get:

• Right to transfer to new computer
• Installation DVD/USB
• Direct Microsoft phone support
• Ability to upgrade hardware significantly

Best for:

• New computer purchases
• Users who never plan to change computers
• Budget-conscious buyers
• System builders and PC manufacturers

Pros:

• Lowest price point
• Full software functionality
• Permanent license (for that computer)

Cons:

• Zero transferability
• Hardware-locked forever
• Limited support options
• Lost if computer dies

What Is a Retail License?

Retail licenses are the full consumer version you’d buy in a store or online. They offer maximum flexibility and full user rights.

Key Characteristics:

• Can be transferred to different computers
• Includes installation media (or download rights)
• Full Microsoft support included
• Higher price than OEM
• More flexible usage rights

What You Get:

• Complete installation package
• Right to transfer license
• Direct Microsoft technical support
• Installation on one computer at a time
• Ability to reinstall after hardware changes

Transfer Rules:

• Can move to new computer (deactivate old one first)
• No limit on transfers (within reason)
• 90-day waiting period between transfers
• Only one active installation at a time

Best for:

• Users who upgrade computers regularly
• Anyone wanting maximum flexibility
• Businesses with changing hardware needs
• Users who value full support

Pros:

• Full transferability rights
• Complete Microsoft support
• Installation media included
• Maximum flexibility

Cons:

• Higher cost than OEM
• Still limited to one active installation
• Transfer restrictions apply

What Is a Volume License?

Volume licensing is designed for businesses and organizations buying multiple licenses. It’s not available to individual consumers.

Key Characteristics:

• Minimum purchase quantities (usually 5+ licenses)
• Centralized management tools
• Flexible deployment options
• Business-only availability
• Special pricing for large quantities

Types of Volume Licensing:

• Open License: Small businesses (5-250 licenses)
• Select Plus: Medium businesses (250+ licenses)
• Enterprise Agreement: Large organizations (500+ users)
• Cloud Solution Provider (CSP): Monthly subscriptions

What You Get:

• Multiple license keys or key management
• Deployment and management tools
• Software Assurance options
• Upgrade rights and benefits
• Enterprise-level support

Best for:

• Businesses buying 5+ licenses
• Organizations needing centralized management
• Companies requiring compliance tracking
• Enterprises with complex IT environments

Pros:

• Volume discounts
• Centralized management
• Flexible deployment
• Upgrade rights available
• Enterprise support

Cons:

• Minimum purchase requirements
• Complex licensing terms
• Not available to individuals
• Requires volume licensing agreement

Key Differences: OEM vs Retail vs Volume (Summary Table)

Feature	OEM	Retail	Volume
Target User	New PC buyers	Individual consumers	Businesses (5+ licenses)
Transferable	❌ Never	✅ Yes	✅ Yes (with restrictions)
Price	Lowest	Medium	Discounted (bulk)
Support	Limited	Full Microsoft	Enterprise-level
Installation Media	❌	✅	Varies
Min. Quantity	1	1	5+
Hardware Tied	✅ Permanently	❌	❌
Business Use	✅	✅	✅ Preferred

Common Misconceptions

“OEM licenses are illegal or fake”

False. OEM licenses are completely legitimate when sold properly. However, selling standalone OEM licenses (without hardware) violates Microsoft’s terms.

“Retail licenses work on unlimited computers”

False. Retail licenses can be transferred but only allow one active installation at a time.

“Volume licenses are always cheaper”

Partially true. Volume licenses offer discounts, but only when buying multiple licenses. Single licenses are more expensive than retail.

“OEM = lower quality software”

False. The software itself is identical across all license types. Only the licensing terms differ.

Which License Type Should You Choose?

Choose OEM if:

• You’re buying a new computer and won’t upgrade
• Budget is your primary concern
• You don’t need transferability
• The computer will have a long, stable lifespan
• You’re a system builder or manufacturer

Choose Retail if:

• You upgrade computers regularly
• You want maximum flexibility
• Full support is important to you
• You might transfer the license someday
• You’re an individual consumer or small business

Choose Volume if:

• You’re buying 5 or more licenses
• You need centralized management
• You’re a business or organization
• Compliance tracking is required
• You want enterprise-level support

Real-World Examples

Scenario 1: Home User Buying New Laptop

• Best choice: OEM (comes pre-installed)
• Why: Cheapest option, no transfer needed

Scenario 2: Freelancer Who Upgrades Every 2 Years

• Best choice: Retail license
• Why: Can transfer to new computers, full flexibility

Scenario 3: Small Business with 10 Employees

• Best choice: Volume licensing
• Why: Bulk discounts, centralized management, compliance tracking

Scenario 4: Gamer Building Custom PC

• Best choice: Retail license
• Why: Full control, can transfer if building new system later

What About Gray Market OEM Keys?

The reality: Many online sellers offer “OEM keys” at very low prices. While the keys may work initially, this practice:

• Violates Microsoft’s licensing terms
• May stop working during future updates
• Offers no protection if the key gets deactivated
• Provides no support if issues arise

Our recommendation: Stick with authorized retailers who properly license OEM keys with hardware or offer genuine retail licenses.

Final Thoughts

Understanding license types helps you make informed purchasing decisions and avoid costly mistakes.

Quick decision guide:

• New computer: OEM is fine
• Flexible use: Choose Retail
• Business needs: Consider Volume licensing
• Budget priority: OEM (with caveats)
• Maximum rights: Always Retail

Remember: The cheapest option isn’t always the best value if it doesn’t meet your actual needs.

Need Help Choosing the Right License?

At DigitaLicence, we offer all three license types with clear explanations of what you’re getting:

🏢 OEM Licenses:

• Genuine keys properly licensed
• Clear hardware binding disclosure
• Competitive pricing

🛒 Retail Licenses:

• Full transfer rights
• Complete installation packages
• Maximum flexibility guaranteed

🏭 Volume Licensing:

• Business-focused solutions
• Bulk pricing available
• Compliance assistance

Confused about which license type fits your needs? Our licensing experts will analyze your situation and recommend the perfect option—no overselling, just honest advice.

Contact us today for personalized license recommendations.