OEM is Original Equipment Manufacturer. The software is the same as a
retail version, but the license is different.
Once an OEM version is installed, it cannot be installed on any other
computer, even if the original computer no longer exists. You get no
Microsoft support with an OEM system. And an OEM system will not
upgrade an existing OS, it must be installed fresh.
The main reason it costs less, and the single biggest disadvantage of
OEM versions, is that it can never be transferred to another computer,
not even if the original one dies.
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