What’s the Difference Between Microsoft Retail, OEM, and Volume Licenses?
Introduction: Why Microsoft Licensing Matters
Before purchasing or activating any Microsoft product — whether it’s Windows 11 Pro, Office 2024 Pro Plus, or Project Professional — it’s essential to understand how Microsoft licensing works. Choosing the wrong type of license can lead to activation issues, limited product use, or even legal complications.
Microsoft offers several licensing models — Retail, OEM, and Volume — each designed for a specific type of user or organization. While they all provide access to the same Microsoft software, the rights, transfer rules, and activation methods differ significantly.
For example, a retail license gives you flexibility to move your software between devices, while an OEM license is permanently tied to the computer it was first installed on. On the other hand, volume licensing is ideal for businesses needing multiple activations across teams or departments.
Understanding these differences helps you:
Avoid fake or restricted license keys sold online.
Ensure your Windows or Office software remains genuine and fully supported.
Choose the most cost-effective and compliant license for your specific needs.
At MSWares.com, we often see customers confused by low-cost offers that don’t clarify license type. This blog aims to clear that confusion by explaining — in simple terms — what separates Microsoft Retail, OEM, and Volume licenses, and which one is right for you.
💡 Overview of Microsoft License Types
Microsoft uses different licensing models to serve individuals, PC builders, and organizations of all sizes. Each license type — Retail, OEM, and Volume — comes with its own rules, benefits, and limitations. Understanding them helps you make smarter software purchases and ensures that your Windows or Office stays genuine and properly activated.
1. Retail License
A Retail License (also known as a Full Packaged Product or FPP) is the most flexible option for personal users and professionals. When you buy Windows or Office directly from the Microsoft Store or authorized resellers like MSWares, you’re usually purchasing a retail key.
Key Features:
✅ Can be transferred to a new PC (after uninstalling from the old one)
✅ Comes with direct Microsoft customer support
✅ Typically sold as a single activation
❌ Slightly higher price than OEM or volume keys
Best For:
Home users, freelancers, and professionals who may upgrade or change PCs in the future.
2. OEM License
OEM stands for Original Equipment Manufacturer. This license type is usually pre-installed on brand-new computers by PC manufacturers like Dell, HP, or Lenovo — or sold to system builders assembling their own PCs.
Key Features:
🔒 Permanently tied to the first PC (can’t be transferred)
🖥️ Activation linked to hardware, usually the motherboard
💰 Lower price than retail
❌ No direct support from Microsoft (support comes from the PC maker or reseller)
Best For:
System builders, PC manufacturers, or users who don’t plan to replace their hardware soon.
3. Volume License
Volume Licensing is designed for businesses, schools, and organizations that need multiple activations for their teams. Instead of buying separate retail keys for each PC, a company can purchase one Volume Key (MAK) or use a KMS (Key Management Service) setup to activate many devices at once.
Key Features:
🔑 One key can activate multiple systems
🧩 Offers flexible deployment and centralized activation
📅 Usually comes with Software Assurance (updates & support)
❌ Not meant for personal or home users
Best For:
Organizations, enterprises, and educational institutions that manage multiple PCs or servers.
🛒 Retail License Explained — Flexibility for Individuals
A Retail License (also called a Full Packaged Product or FPP) is designed for personal users, professionals, and anyone who wants maximum flexibility when purchasing Microsoft software. Whether it’s Windows 11 Pro, Office 2024 Pro Plus, or Project Professional, retail licenses are the most versatile option for individuals.
Key Features of a Retail License
Transferable: You can uninstall the software from one PC and install it on another. This makes it perfect for users who upgrade their computers frequently.
Direct Microsoft Support: Retail licenses come with full support from Microsoft, so you can resolve activation or technical issues directly.
Single Activation: Each retail key is valid for one device at a time, ensuring legal and genuine use.
Slightly Higher Cost: Retail licenses usually cost more than OEM or volume licenses, but the added flexibility is often worth it.
Ideal Users
Home users who may change PCs often
Freelancers or remote workers using Office or Windows on multiple devices
Anyone who wants the peace of mind of fully supported, genuine software
Example
Suppose you buy a Windows 11 Pro Retail key from MSWares.com. If your old PC stops working, you can simply deactivate the license there and activate it on your new computer. This level of flexibility is not available with OEM licenses.
Why It Matters
Many users are drawn to cheaper alternatives online but fail to notice the limitations. Choosing a retail license ensures legal compliance, full support, and long-term flexibility — crucial for both personal and professional users.
🖥 OEM License Explained — Affordable but Limited
An OEM License (Original Equipment Manufacturer) is a cost-effective option primarily intended for pre-installed systems or custom-built PCs. Many brand-new computers from manufacturers like Dell, HP, and Lenovo come with OEM licenses, and system builders often purchase them for assembling PCs. While OEM licenses are cheaper than retail, they come with some important limitations.
Key Features of an OEM License
Permanently Tied to Hardware: The license is linked to the first PC it is installed on, usually the motherboard, and cannot be transferred to another computer.
Lower Cost: OEM licenses are generally cheaper than retail versions, making them attractive for new PC purchases or bulk system builds.
Support Provided by Manufacturer: Microsoft does not directly support OEM licenses. Instead, support is handled by the PC manufacturer or reseller.
Activation: Usually pre-activated or requires hardware-based activation.
Ideal Users
System builders assembling new PCs
Home users buying pre-installed PCs who don’t plan to move the license
Budget-conscious buyers who need a legitimate Microsoft product without retail pricing
Example
If you purchase a Windows 11 Pro OEM key pre-installed on a Dell laptop, that license cannot be transferred to another PC. If your Dell laptop fails, you would need a new license for a new machine.
Why It Matters
OEM licenses are perfect for users who don’t need transfer flexibility and are looking for legitimate, affordable Microsoft software. However, anyone planning to upgrade or change computers frequently should consider a retail license instead.
💼 Volume License Explained — Best for Businesses and Organizations
Volume Licensing is designed for businesses, schools, and large organizations that need multiple Microsoft software activations across many devices. Unlike retail or OEM licenses, volume licenses allow companies to simplify deployment, reduce costs, and manage software centrally.
Key Features of Volume Licensing
Multiple Activations with One Key: Volume licenses use either a Multiple Activation Key (MAK) or Key Management Service (KMS) to activate several computers with a single key.
Centralized Management: IT administrators can deploy and manage software efficiently across the organization.
Software Assurance Benefits: Volume licenses often include updates, support, and downgrade rights.
Not for Individual Use: Volume licenses are intended for organizations, not personal users.
Ideal Users
Businesses with dozens or hundreds of PCs
Educational institutions managing software in labs and classrooms
Government organizations or enterprise teams
Example
A company purchasing Office 2024 Pro Plus Volume Licenses for 50 employees can use a KMS server to activate all installations without manually entering 50 separate keys. This approach saves time, ensures compliance, and provides consistent software management across all devices.
Why It Matters
Volume licensing is cost-effective, scalable, and compliance-friendly for organizations. It ensures that businesses remain legally compliant while giving IT teams the tools to manage software efficiently. Without it, companies risk license violations or facing unnecessary costs.
📊 Key Differences Table — Retail vs OEM vs Volume
To make it easy to compare the three main Microsoft license types, here’s a quick reference table highlighting their features, ideal users, and activation rules:
| Feature | Retail (FPP) | OEM (Original Equipment Manufacturer) | Volume License |
|---|---|---|---|
| Transferable | ✅ Yes – can move to another PC | ❌ No – tied to first PC | ⚠️ Limited – for organization use only |
| Price | 💰 Higher | 💸 Lower | 💼 Discounted in bulk |
| Support | Direct Microsoft support | Manufacturer support | IT Admin / Microsoft Partner |
| Activation Method | Online activation via Microsoft | Preinstalled or hardware-based | MAK or KMS for multiple devices |
| Ideal Users | Personal users, freelancers, professionals | System builders, pre-installed PCs | Businesses, schools, organizations |
| Software Updates | Regular updates included | Regular updates included | Updates + Software Assurance benefits |
🎯 Which License Type Should You Choose?
Choosing the right Microsoft license depends on your usage scenario, budget, and flexibility needs. Here’s a simple guide to help you decide:
1. Retail License — For Individuals and Freelancers
✅ Best for personal use and home offices.
🔄 Flexible: Can transfer the license to a new PC if you upgrade.
💻 Supported by Microsoft: Direct support for activation issues.
💰 Cost: Slightly higher, but worth it for flexibility and peace of mind.
Example: A freelancer who frequently upgrades PCs should use a Windows 11 Pro Retail or Office 2024 Pro Plus Retail license.
2. OEM License — Affordable and Pre-installed
💸 Cost-effective for new PC purchases or custom builds.
🔒 Tied to hardware: Cannot transfer to another PC.
🖥️ Support: Provided by the PC manufacturer, not Microsoft.
Example: Buying a Dell or HP laptop with a pre-installed Windows 11 Pro OEM license is perfect if you don’t plan to move the software.
3. Volume License — For Businesses and Organizations
💼 Designed for multiple devices in offices, schools, and enterprises.
🔑 Centralized activation: MAK or KMS simplifies deployment.
📦 Software Assurance: Provides updates, support, and downgrade rights.
Example: An IT department purchasing Office 2024 Pro Plus Volume Licenses for 50 employees can manage activations easily and stay compliant.
✅ Quick Tips for Choosing the Right License
If you upgrade PCs frequently, go with Retail.
If you want a budget-friendly option for a single machine, choose OEM.
If you manage multiple devices in a company or school, choose Volume Licensing.
At MSWares.com, we provide genuine, affordable Microsoft Retail, OEM, and Volume Licenses. Understanding the differences ensures you pick the license that suits your needs and avoids future activation headaches.
⚠️Common Misconceptions and Mistakes About Microsoft Licenses
1. “Cheaper Keys Are Always the Same”
Many buyers assume that the cheapest license keys online are the same as retail or volume licenses. Warning: Some low-cost keys are OEM or even unauthorized. Only purchase from trusted sources like MSWares.com to ensure genuine software.
2. “OEM Licenses Can Be Transferred to Another PC”
OEM licenses are permanently tied to the first PC, usually the motherboard. Attempting to transfer it to a new computer will fail activation. Retail licenses are the only type that can be moved between machines.
3. “Volume Licenses Are for Everyone”
Volume licensing is not intended for individual users. Buying a volume license for personal use can violate Microsoft’s terms and may result in deactivation. It’s strictly for organizations, schools, or businesses.
4. “Software Updates Are the Same Across All License Types”
While all licenses get updates, only Volume Licensing with Software Assurance provides additional benefits like downgrade rights, extended support, and centralized management. Retail and OEM updates are standard but may lack enterprise perks.
5. “Activation Issues Mean the License Is Invalid”
Sometimes activation fails due to hardware changes or incorrect setup. This doesn’t necessarily mean your license is fake. Retail and volume licenses can usually be reactivated following Microsoft’s guidelines.
❓ Frequently Asked Questions (FAQ)
1. Can I transfer a Microsoft OEM license to another PC?
Answer: No. OEM licenses are permanently tied to the first PC they are installed on, usually linked to the motherboard. If you upgrade your PC, you will need a new license.
2. What is the difference between a Retail and OEM Microsoft license?
Answer: Retail licenses are flexible and transferable to another PC, supported directly by Microsoft, but slightly more expensive. OEM licenses are cheaper, pre-installed or sold to system builders, and cannot be transferred.
3. Who should use a Microsoft Volume License?
Answer: Volume licenses are intended for businesses, schools, and organizations that need multiple activations. They allow centralized deployment and often include Software Assurance benefits like updates, support, and downgrade rights.
4. Can I buy a volume license for personal use?
Answer: No. Volume licenses are designed for organizations and may violate Microsoft’s terms if used for personal purposes. Individual users should choose Retail or OEM licenses.
5. How do I know which Microsoft license is right for me?
Answer:
Choose Retail if you are an individual or freelancer who may upgrade PCs.
Choose OEM if you want a cost-effective license for a single PC.
Choose Volume if you manage multiple devices in a business or educational setting.
6. Where can I buy genuine Microsoft licenses?
Answer: You can purchase authentic Retail, OEM, and Volume licenses from MSWares.com, a trusted seller offering activation guarantees and affordable pricing.