As I’ve been writing about building computers, I’ve glossed over one important aspect: the Operating system and for most of us, that will be Microsoft Windows. To be frank, I haven’t discussed it well and I don’t want to give the wrong information. The fact remains that there is no free lunch, you need to install a legitimate copy of Windows.

Why you don’t want a bad license

So, what’s the big deal? You’re running Windows, doing your social media, or working on your sales presentation and everything is working fine, right? Well, yes, but how comfortable are you running stolen software? That’s right, if it is illegitimate, using it is theft. You may not be arrested for this, but there are some consequences you need to be aware of.

First, if it has not been registered with Microsoft (a process that occurs when it’s installed), it won’t continue to run without asking you to register. You will get messages on your screen asking you to register it. Most computers sold by less that reputable vendors/people will be of this variety. It works fine for a month, and then you start being nagged about purchasing a legitimate copy. You certainly do not want that to pop up in your sales presentations.

Another thing that happens which is certainly annoying but not crippling is that you won’t be able to customize your Windows desktop. That’s right, to pressure you to purchase, Microsoft won’t allow you to change your Windows wallpaper, the colors, the title bars, change the theme, customize what programs start first, or what the lock screen looks like. Again, not the worst issue, but certainly a reminder that you should probably pay up.

A bigger issue is that you won’t be able to install software updates, and especially security updates. This means that over time your system becomes more unstable with screen freezes, unexplained reboots, and noticeable slowdowns. It also becomes vulnerable to intrusion, viruses, malware, and hacking. That is not something you want to have happen when you are on a deadline.

Not using current software is not just a risk to you, it is a risk to others as well. This is because if your computer becomes infected, then it will likely spread it to every other computer in your house/business. It could also spread to people you communicate with. Viruses are written with the precise purpose of spreading far and wide. Like the WannaCry virus, which spread primarily because of unpatched, illegal copies of windows.

We should add that this was a ransomware virus, the kind that locks you out of your own computer’s files. Basically, once you are infected, you can’t access your own files anymore. You are instead presented with a dire warning that if you don’t pay a ransom, you will not be allowed to access your files anymore and/or they will be shared on the dark web.

Good luck trying to explain that to your clients, your contractors, your bookkeeper, and the IRS… if you also happen to be using an illegitimate copy of Windows.

Finally, when things do go awry, you also will not be able to ask for assistance from Microsoft. While few people do this, it is actually one of the perks of running legal software. If you run your own business, this is probably more important to you than you realize. If you paid for a legal license of Windows, you have help, so use it.

In a worst-case scenario, you could be found liable for pirating software. This happens very rarely these days, especially to individuals and small businesses, but there is another scenario you should consider if you run a business. A disgruntled employee or an angry client could report you to Microsoft. If it comes to that, you will need to defend yourself in court, and how will you plead your case to a judge as an honest business if you use pirated software?

So, no, you don’t want to be using illegitimate software. As a business it simply isn’t worth the risk.

Pitfalls to watch for

There are many ways you could end up with an illegitimate copy of Windows, but the ones I want to point out are when you are building your own computer or purchasing it used. The reason this happens at all is because it’s an added expense that vendors want you to ignore so that they can advertise a very low price. When margins are small, that extra $100+ for a legitimate license matters.

Companies like NewEgg, PC Part Picker (on of my favorites), BestBuy, and MicroCenter, where you can buy parts and refurbished computers, do not like to inform people that low price comes with extra costs. When dealing with distant individuals, charities and small businesses reselling computers online, the likelihood is even greater that they don’t include a legitimate license of Windows.

I regularly purchase older computers and parts on eBay, NextDoor, and Facebook Marketplace, but I must be very careful. I always confirm with the seller that if they advertise that a license of Windows is included, that it is legitimate. Even then, I have been swindled too.

If you build your own system from parts or buy the computer used, here is how you could get stuck with an illegitimate license:

1. Trial Licenses:

Anyone can install Windows on a computer without actually activating it. This means that it has not yet been paid for. That responsibility lies with the new owner (you). After a month, you will receive messages that this is required and eventually, you will have stability and security issues (see above).

2. MSDN and Visual Studio Licenses:
In order to promote a wide choice of software options for customers to use on their computers, Microsoft wants to encourage programmers and technical people (aka the Microsoft Developer Network / Visual Studio developers) to create for all the different versions of Windows that are available. To facilitate this, programmers have access to all these Windows licenses for free.

However, these Windows licenses can only be used by these developers, they cannot be resold or installed on computers that they sell. I purchased a computer with such a license from a reputable vendor. So imagine my shock when I was informed by Microsoft that I was using illegitimate software. When I tried to contact the vendor, they were out of business, and I had no other option than to buy a completely new license of Windows.

3. Cheap License Keys:

There are a number of websites that sell very inexpensive licenses (usually about 20% of the retail price). You may have seen advertisements from even reputable YouTubers for sites like scdkey.com and allkeyshop.com and keysoff.com. These sites are typically not even located in the US and often hidden behind multiple other sites – that is, they don’t really want to be found.

I purposely didn’t link these sites in this article because they are grey market sites, some would even say downright illegal. There are many different theories about how they acquire their licenses and while they do seem to work, there is no guarantee for how long or how well. Do you really want to be buying a license from them if you are running a business?

The problem is that this is often the type of license that is installed on used computers sold online. So, when you buy online ask where the license came from. If the vendor responds vaguely, buy elsewhere. I usually ask specifically if they purchased it from an online site.

4. License Stickers:

Before Windows 8, the genuine Microsoft license key to install a fresh and legal copy of Windows was written on a sticker that was attached to the computer. I typically look for this sticker when I purchase used computers. This way, if I purchase it, I have a genuine license that I can either re-install on that computer or that I can transfer to another computer if I destroy the old one.

The problem is that unscrupulous sellers can copy the installation code, install it on another computer, and then sell the computer with the sticker, not informing the buyer that the license is already in use elsewhere. I have run into this myself. You will then need to contact Microsoft and confirm that you are the legitimate owner of that license.

A more insidious version of this is when people online zoom in to the pictures that are displayed for selling the computer and copy the license key without purchasing the computer. They then use it to install the license on another computer. This is theft, but if you buy the computer, you are left with having to provide proof to Microsoft that you are the legitimate owner.

When I buy online, I confirm that the sticker is included, but I don’t buy if it is clearly legible in the picture. That is just more trouble than I have time for. I would rather purchase from someone who understands the ways that licenses work.

5. OEM Licences:
Original Equipment Manufacturer (OEM) licenses are specially priced licenses purchased in bulk by the major manufacturers such as HP, Dell, and Lenovo. It is then tied to that computer. The sticker pictured in the previous paragraph is from an OEM license of Windows.

Specifically, the differences between an OEM license and a regular retail license that is of interest to us are:

• It will not qualify for support from Microsoft – any support must come from the OEM vendor who installed it

• The license is tied to the very first computer it was installed on

• All parts of the computer can be upgraded except the motherboard (the main circuit board)

The license is clear: it needs to remain with that old computer. However, there is no technical reason for this to be the case. As a matter of fact, even replacing the motherboard works without issue. The reason for this technical possibility is that replacing a motherboard for repairs or upgrades is not uncommon. Since the license is not really in use until after the large manufacturer sells the computer, it also has no bearing on that license.

What is key here is that Microsoft’s license has no connection to the hardware. So, OEM Windows can be installed anywhere, even if the license is lost after it is moved to a new computer. There is no difference in the functionality between the retail Windows version and the OEM version. They both work the same, but the license does not.

What often happens is that because the software is the same, people transfer the software from an old computer that is going to be destroyed without consequence for the license. Alternately, the software is simply transferred to a second computer, while remaining active on the old computer too. In either case, the second computer no longer has a legitimate license even though it works without issue.

I have experienced this a few times when I purchased a home-built computer online. It will come with an OEM license which is not valid for the computer that I purchased. Technically, this is not an issue because it works fine, but the license is invalid.

So how do you check if you are running an OEM or retail what version? It’s actually simple enough. You open up a command prompt Window and type the command:

slmgr –dli

After a few seconds it will present you with the following pop-up Window:

As you can see here, this license of Windows 10 is a RETAIL version of Windows, which means it can be transferred to another computer. If it had not been a retail version, the second line would have said OEM or VOLUME, which is not transferable.

It should also be pointed out that smaller companies that build computers from all-new parts will typically sell an OEM version of Windows with that computer. This is perfectly legal, but they should clarify this when they advertise and sell it. Sometimes they do not; this false advertising is less common these days, but it still happens or sometimes it is busied somewhere in small print. If you are going to buy from a smaller vendor, do confirm what you are buying.

6. Upgraded Licenses:
Purchasing upgraded licenses in bulk from authorized Microsoft vendors is often a cost-effective way to lower the cost of the license. I believe this is how those marginally legal websites find legitimate licenses keys to resell. A company could for example bid on a wholesale lot of much older windows licenses for a very small cost. These can be found when companies who sell computers (with licenses) or even software resellers go out of business and are doing a fire sale.

That license can then be upgraded a newer version of Windows at a lower cost than a full new license. In theory, even the upgrades could also be purchased in bulk and in a fire sale, saving the company even more. Once upgraded, the license key for the current version of Windows is valid.

Now I must believe that as a matter of policy Microsoft would disavow thee licenses once they are activated, but I’m not sure they would pursue it. Technically, this is not completely legal, but it would be difficult and expensive to prove. Microsoft does not want the negative publicity and with free operating systems like Linux available, they would rather have large numbers of users rather than enforcing their licenses. It’s just a speculation, of course. They could one day, chose to recharge users for the full amount of a current license.

This really gets into the weeds of software licensing, and I’m certainly not an expert. I’ve read a fair amount about licensing, and I am just interpreting what I understand. However, why put your business at risk for using a marginally legal license. It’s just a small expense to pay for peace of mind.

What a license should cost

Interestingly, there isn’t much variance between what legitimate vendors sell the license for. Sometimes they will discount the price if bundled with a complete computer, but then that means you are overpaying elsewhere. Microsoft doesn’t offer any discounts to resellers and it is about the same price directly from Microsoft:

• Windows 10 Home costs about $140 per computer

• Windows 10 Pro costs about $200 per computer

There are other versions of Windows and lots of add-on options, but for individuals and small business owners, those are the prices. The Pro version includes some extra security features, but the key feature that matters most is the ability to access the computer remotely from another Windows computer. Then again, that feature as well as the security enhancements can also be purchased from other companies and even found for free.

Also, the Pro version allows you to connect that computer to a Windows File server on a network and manage different users and resources on that network. Of course, if you small business is at that level, then you probably aren’t building your own computers anymore. You also are likely to be purchasing your Windows licenses from a larger vendor who can guarantee that they are legitimate.

I typically advise my clients to purchase the Windows Home version and it works just fine for most businesses. You can even set up a Windows Home computer to be a file server, albeit without a lot of the management and security tools, and it works fine on a very small scale for that as well.

It is actually surprising how much a $140 Windows Home license can do. So do yourself a favor and just buy the full license from a reputable vendor. It will save you lots of headaches over time. If one day, you do need to upgrade to the Pro version, it is $100 direct from Microsoft, as it more than if you had purchased the Pro license from the start, but that a business decision that should be weighed against the possibility that you may not have needed it in the first place.

And Then Came Windows 11…

What about Windows 11? Since we were talking about used computers, I didn’t mention Windows 11. This is because most older computers (those built before 2018) will not be able to run Windows 11. Yes, that is a real problem with older computers, but this is also a business decision.

The first question is what does Windows 11 offer over Windows 10, aside from some bling? If you can’t answer that (and most people can’t), then why bother? Windows 11 is not faster, it is not better, and it only runs on some computers. Now if Microsoft is reading this, they would probably not like me very much for saying this, but I’m trying to be practical and save you some money.

The one thing Windows 11 buys you is time. Windows 10 will stop receiving updates at the end of 2025, while Windows 11 will likely receive updates until 2031. One a positive note, upgrading to Windows 11 is currently free and is likely to remain so for at least another year because very few people are doing it.

The fact is Microsoft as a company has a poor track record with Windows versions. It is well known that large corporate customers tend to only upgrade every other version because the version in between is only marginally better or has issues (Windows Vista and 8 come to mind). Windows 11 is looking to become one of those in-between versions. It is also well known that these large customers don’t immediately upgrade because new versions have bugs, and they don’t want to be trial cases.

For all these reasons, I tell my clients to only use Windows 10. If they purchase a new computer with Windows 11 pre-installed, that’s fine, but don’t spend the resources (time and expense) to upgrade to Windows 11 just yet. I have a feeling that Windows 11 will be replaced by Windows 12 before most people upgrade. It’s just a hunch, but it is based on decades of precedent that Microsoft itself has created.

Just sayin’.

Conclusion

Licensing is a thorny issue and one that can lead to legal complications. Therefore, I want to reiterate that I’m not a licensing expert. I’m only describing what I understand the issues to be based on my own observations and experiences.

You may find that your authorized software reseller or even Microsoft themselves has a different perspective. If so, I urge you to follow their advice on licensing your computers. If you do find out different information, by all means, share it in the comments section below. Accurate information is always welcomed.

However, for most small business owners who don’t have direct access to Microsoft licensing experts, I hope that my comments will provide some guidance on avoiding the biggest pitfalls. I do not want you to end up with a computer that does not work because it does not have a legitimate copy of Windows.

I also hope this provides so honest answers for those who are building their own computers. It’s not rocket science and it is very rewarding, and if you have the time and the interest, then I hope this is of interest. After all, what is the point of building a computer if you don’t have an operating system to install on it?

In the next article I will cover how to install Windows 10 on a used, or newly built computer. Like building the computer, it’s not rocket science. You just need to follow the proper steps.