Windows 8 System Builder Version May Come Cheap

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A Windows license has traditionally been one of the most expensive components when building your own PC, but that may change with Windows 8.

Windows 8 brings some major differences in licensing from past versions. Most notably, the so-called “Full Packaged Product” is out, and a new “Personal Use License (System Builder)” version is in. This lets users install the software on a computer they've built or as an additional operating system on a virtual machine or separate partition.

The possibility of this new System Builder version was rumored last month, but has now been confirmed by ZDNet's Ed Bott, who cites directly from Microsoft's new end-user license agreement in his report.

In the past, users who built their own machines or ran Windows on a virtual machine were supposed to purchase a full retail copy of the OS. Many retailers sold cheaper OEM versions of Windows -- the same version that PC makers install on their hardware -- but technically, these versions were off-limits to end-users. That didn't stop people from ignoring Microsoft's licensing restrictions and installing the cheaper OEM versions anyway.

With Windows 8, Microsoft will allow consumers to purchase the same software that's available to PC makers. Although Microsoft hasn't announced pricing, the System Builder version will likely be cheaper than the full retail copies of years past.

But as I pointed out last month, this approach may have a downside: In the past, OEM versions have been restricted to one installation on a single motherboard. Once the software was installed, it couldn't be transferred to another computer. With the full retail version, users could transfer their copy to a new motherboard -- for instance, if the old one got fried -- or to another virtual machine.

It's unclear whether the System Builder version of Windows 8 will be locked to a single motherboard, but the language of the license agreement (“we grant you the right to install and run that one copy on one computer”) suggests that it will.

Still, if the System Builder version is cheap enough, I imagine most people will accept a trade-off in flexibility. With Windows 8 upgrade pricing set at $40 through January 31, 2013, there's a good chance System Builder pricing will break the $100 barrier. By comparison, Microsoft currently charges $200 for a full retail version of Windows 7 Professional.

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