"Excuse me but why is your price for Windows 7 so high? I can buy it online for $49, so there's no way that I would pay $139 for a copy of Windows 7 Pro."
That's often how my day starts with a discussion over how much a full legit copy of Windows 7 or Windows 8 truly costs.
I love Microsoft licensing. There I said it. I truly love it, and I’m in the low percentage of people who can say that. I think the reason I can say it is I've talked about it on a daily basis for 15+ years. I understand it. Again, clearly not many people understand it, or in many cases, even want to try to understand it.
One of my favorite discussions is the incredible yet unbelievable $49 copy of Windows. You see, I speak with many companies of all sizes and with all kinds of ideas on how they want to use Windows. With Avnet being the number one Microsoft Embedded distributor, I do get many new startup companies that want to create an inexpensive device or appliance that runs on Windows, and they of course want the least expensive method to buy a Microsoft Windows Operating System.
My dad always told me, "If something sounds too good to be true, then odds are that it is simply not true." In the case of a $49 copy of Windows, it just isn't going to happen and if you see it, just know that odds are it isn't legal.
Microsoft Windows Licensing Options
So, let me see if I can help solve this incredible mystery and talk about the true options for licensing a Windows Desktop operating system. Let me remind you that I love Microsoft licensing and the reason for that is they actually do try and please everyone. However, in doing so, we are quickly reminded that you can in no way please everyone. Some would say why can’t they just make things simple and offer one product for one price? Well, because nobody would be happy unless you were the only one that needed that one product at that one price. So let’s go through the program options and talk pricing along with the differences.
First, let me say that it isn't the customer's fault, and you can't really blame Microsoft either, as the company has tried to offer many programs with many different pricing models in an attempt to fit many different industries. If you go out to Bing and do a quick search for "Windows 7 Professional" then click on "Shopping," you’ll instantly see prices ranging from $49 on up, with many prices in the $75 to $85 range.
This leads us to the different program choices, and it is very important to understand which program you are buying along with understanding the restrictions, pricing and what you actually receive with your purchase.
Thirty Different Options of Windows?!
Thirty options! That’s right, you read that right. If you are looking to buy a copy of Windows 7 or Windows 8, there are 30 different options that you would need to grasp before you would hit the purchase button. On top of that, many of the programs have deeper pricing discounts based on volume, so even then the price for a single license can vary dramatically if you plan on purchasing in bulk.
OEM System Builder Licensing
The most common program is the OEM System Builder licensing, and I can tell you that an OEM System Builder copy of Windows 7 Professional should be priced at $139 and never in the $49 range. Yet when you perform that online search, you will see pricing as low as $49. So how is this possible? The simple answer is the product is pirated and is a counterfeit copy of the product. However, it could very well be that it is actually a special version of Windows 7 from one of the many different Microsoft programs and not the OEM System Builder program. It also could be that it is not a full license but rather an upgrade, but even then I can tell you that upgrade licenses are priced far higher than $49.
The most commonly pirated edition of Windows isOEM System Builder. Why? Because there are only two ways to get a full O/S license for general use and that is via the OEM System Builder program or retail package. Secondly, because this product is open source and goes go through distribution and reseller channels, it is for sale out on the internet with no authorizations required to purchase and resell it. That’s a perfect fit for pirates. Add the confusion from 30 different Windows options and programs into the mix and it is clear that people will buy and pay money for pirated software as long as the website looks legit.
OEM System Builder Windows 7 has three components and to be legit, all three must be included:
- First and most importantly is the COA (Certificate of Authenticity) sticker
- Second is the DVD Hologram disc
- Last is the tiny booklet manual, all packaged in a DVD movie-style case
You Can't Download a Full Windows O/S from the Internet
Let’s clear up a few things right away. There is no such thing as a "full" Windows O/S license that can be downloaded from the internet. There is one recent exception; Microsoft has a Windows 8 Upgrade promo sold only through its Microsoft Store that does include an "Upgrade" O/S license for Windows 8, which can be directly downloaded. Again, it is only available direct via the Microsoft Store and as a promotion.
Outside of that one exception, there has never been a full O/S license for Windows Desktop operating system available as a download. If a company says you can download it via its website, it's a pirated website. If company tries to sell it to you as a COA sticker by itself or just with the DVD alone, then yet again it's attempting to sell you a product that is not legal. Another favorite method software pirates often use to justify the lower pricing is they tell you the product is a branded copy of Windows and because it says HP, Lenovo or Dell on the COA sticker, they can sell it cheaper. The real truth is branded OEM COA stickers can't be sold without the branded computer! The pirates are actually removing the COA stickers from computers in libraries, hotels and schools and then selling them to you on the internet.
To be a legal copy, it must have all three of the core items (COA , DVD and manual)--and most importantly, you can’t download it from the internet.
Pricing for Legal Copies of Windows
So what pricing should you expect for the OEM System Builder channel? For the most common Pro edition, you should pay $139.99 and for the non-Pro edition $99.99 price range. If you see pricing far below these prices, then odds are the provider is not legal and you are opening the door to some serious legal situations, which could turn ugly very quickly. You are taking a risk not only from a legal standpoint, but these products are also typically swarming with malware and viruses. From a reseller perspective, Microsoft is prosecuting resellers that knowingly buy and resell non-legal copies of the software. You can check the Microsoft OEM Partner Center Lawsuits for the latest companies being prosecuted.
Another huge red flag for pricing is on older retired operating systems such as Windows XP, which went End Of Life on January 31, 2009, and is no longer manufactured in the OEM System Builder program. However, with the success that Microsoft has had with XP, there are many customers that still want it and risk the piracy waters to get their hands on copies of it. For the year 2013, the only true way to get your hands on Windows XP is via the Microsoft OEM Embedded program, which still offers XP but only if you can meet the restrictions of a dedicated appliance. Otherwise, for general purpose computing the correct method is to purchase OEM Windows 7 and exercise downgrade rights back to XP. So, if you see a website offering Windows XP Pro, odds are it's not legit.
In this article, I don't have the time to go through each program or option, but I do want to provide you with a chart that gives an overview of many of the programs and versions of Windows 7 with the correct price ranges, which you should see based on low-volume purchases. In addition to the 23 options below, there are other programs such as Enterprise Agreements and Select Agreements that drop the pricing even lower, but keep in mind for a "full" O/S license the only programs are OEM and Retail. Open Volume licensing never offers a full O/S, they are upgrade only. Prices shown are ranges for each edition. (Click image to enlarge.)
If you see a website offering OEM Windows 7 Pro for $49, you now know better. Stick with companies that have strong reputations for supporting you and your business, helping you succeed and keeping yourself out of trouble.
For more information or to report a $49 website visit: http://microsoft.com/en-us/piracy/default.aspx
Based in Phoenix, Ariz., Ken Marlin is a Microsoft Champion and Technical Consultant at Avnet Embedded. He has over 30 years of Microsoft experience supporting all Microsoft products and programs with specialties in Microsoft OEM System Builder, OEM Embedded and Open Volume programs. He is a regular contributor to http://www.IntelligentSystem.com.