What is the difference between OEM, RETAIL and ESD license?

Understanding the Differences Between OEM, Retail, and ESD Licenses

When purchasing software, especially operating systems like Windows, you might come across terms like OEM, Retail, and ESD licenses. Understanding the differences between these types of licenses can help you make an informed decision based on your needs. Let’s dive into what each of these licenses entails.

OEM (Original Equipment Manufacturer) License

OEM licenses are typically pre-installed on new computers by the manufacturer. Here are some key points about OEM licenses:

  • Tied to Hardware: Once installed, an OEM license is tied to the specific hardware it was originally installed on. 
  • Cost-Effective: OEM licenses are usually cheaper than Retail licenses because they are sold in bulk to manufacturers.
  • Support: Support for OEM licences by the computer manifacturer, not by Microsoft.

Retail License

  • Retail licenses are sold directly to consumers and can be purchased from various retailers. Here are the main features of Retail licenses:
  • Transfereable: Unlike OEM licences, Retail licences can be tranferred from one computer to another, as long as the previous installation is deactivated.
  • Full Support: Microsoft provides full support for Retail licencses, which can be beneficial if you ecnounter any issues.
  • Flexibility: Retail licenses offer more flexibility in terms of installation and reinstallation on different hardware.

ESD (Electronic Software Download) License

ESD licenses are digital licenses that you can download and install. Here are some important aspects of ESD licenses:

  • Digital Delivery: ESD licenses are delivered eletronically, which means you receive a product key via email or through an online account.
  • Convenience: Since there is no psyhical media involved, ESD licenses can be quicly and easily obtained and installed.
  • Same Features: Functionallly, ESD licenses are similar to Retail licenses, offering the same flexibility and support.

Which One Should You Choose?


The choice between OEM, Retail, and ESD licenses depends on your specific needs.


OEM: Ideal if you’re buying a new computer and want a cost-effective solution.
Retail: Best if you need the flexibility to transfer the license between different machines and prefer direct support from Microsoft.
ESD: Perfect for those who prefer the convenience of digital delivery and need the same flexibility as Retail licenses.

Understanding these differences can help you choose the right license for your situation, ensuring you get the best value and support for your software investment.

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