The Difference Between the OEM & the Paper License

When installing software, it is important to understand the different types of software licensing available. A software license gives you, the user, permission to use the software without committing copyright infringement. Using software without a valid license is considered piracy, which is illegal in most countries.

An OEM, or original electronics manufacturer, license is the default license for software bundled with a new hardware purchase. Software may come pre-installed or as a compact disk in a sleeve, and sometimes it will be both, with the disk being the backup copy. When you buy a new computer from a big box store, for example, its included Windows operating system uses an OEM license.

For a business looking to install a piece of software across many computers, the OEM license is not the most efficient way to license the program, as it is aimed more at individual end users. Instead, a more common solution in such a scenario is to purchase one copy of the software and request a "paper license" from the software company, allowing the software to be installed in many machines with a single license key.

An individual is usually better off with an OEM license; corporate applications most often use the easier and more-efficient paper license. If you are an individual user who wants to install software across multiple computers, many software vendors will issue a paper license that is good for at least five different machines. This is a good way to save money on your total software purchase, as the software vendor will typically offer a discount for licensing multiple computers.