Original Equipment Manufacturer (OEM)

Original Equipment Manufacturer (OEM) licenses are preinstalled on, and sold with, pre-assembled computers from system manufacturers. There are two types of OEM product types — those used for "Direct OEMs" (major name brands that buy through a direct contract with Microsoft and produce and brand their own media from a Microsoft "Gold Master Copy" by using an Authorized Microsoft Duplication Partner), and those used for "System Builders" (local computer shops that buy generic, unbranded kits through Authorized Microsoft Distributors). Direct OEM product keys will often not activate with System Builder installation media because Direct OEMs are now required by Microsoft to pre-activate their copies in the factory using their own internal mechanism before delivery to the customer. It is recommended that System Builders also pre-activate their systems before delivery, but this is not mandatory.
OEM installations can be customized using the Microsoft OEM Preinstallation Kit with branding, logos, additional applications, optional services, alternate applications for certain Windows components, Internet Explorer links, and various other customizations. All OEM customers must include support and contact information for the initial installation of Windows because it is the responsibility for the OEM to support the Windows installation, and is not provided by Microsoft to the end-user. Direct OEMs must create their own media, but have the option of creating their own custom recovery solution, which may or may not be similar to a generic installation. OEMs may provide a recovery partition on the hard drive as the custom recovery solution rather than providing disc-based media with the computer.
Some end-users have found this to be a troublesome option, because in the event of an out-of-warranty hard drive failure, they may not have access to reinstall Windows on a new hard drive. System Builders are not allowed the option to create a custom recovery CD/DVD media. The only deliverable media available for a System Builder to give to the end-user is the unbranded OEM System Builder hologram media kit. Because of this, when end-users reformat their hard drives and re-install from the installation media, they lose all the custom branding and support information that the System Builder would have included.
As a supplemental recovery method to a CD/DVD-based installation, a System Builder may employ a fully customized recovery solution on the hard drive. Whether utilizing a recovery partition or not, a System Builder must still include the original generic OEM System Builder hologram CD/DVD media kit. OEM licenses are not transferable from one computer to another. Every computer sold/resold with an OEM license must include all of the original installation media or recovery solution, documentation, Certificate of Authenticity, and product key sticker with the sale. Microsoft requires that all OEM system manufacturers include as part of the configuration the Windows Out-of-Box Experience (OOBE), which is the initial setup wizard encountered the first time Windows boots-up. It is also required that Value-Added Resellers (VAR's), retailers, and general resellers not tamper with the OEM's customized OOBE mechanism unless under permission by the OEM, and it is a recommended configuration for systems that are privately resold so that a customer will have a like-new computer experience upon first boot-up.
OEM licenses are to be installed by professional system manufacturers only. Under Microsoft's OEM License Agreement, they are not to be sold to end-users under any circumstance, and are to be preinstalled on a computer using the OEM Preinstallation Kit (OPK) before shipment to the customer, and must include at the very least the manufacturer's support contact information. They are, therefore, designed for installation only on a single computer and are not transferable, even if the original computer is no longer in use. This is not usually an issue for users who purchase new computer systems, because most pre-assembled systems ship with a preinstalled operating system. There are few circumstances where Microsoft will allow the transfer of an OEM license from one non-functioning system to another, but the OEM System Builder License Agreement (SBLA), as well as the OEM End User License Agreement (EULA) do not contain any allowance for this, so it is entirely up to Microsoft's discretion, depending on the situation.