IT managers face Windows legal threat

IT managers could be breaking the law by installing Microsoft's volume licensing software on PCs bought without a Windows operating system pre-installed.

Typically most companies buy PCs with Windows pre-installed and then buy a volume licensing package that allows them to deploy a standardised configuration by re-imaging the PCs.

But those who try to avoid 'paying twice' for the licences by purchasing PCs without a Windows operating system - 'naked' PCs - and then just buying a volume licensing package, could be breaking the law.

Rob Enderle, senior analyst at Giga Information Group, said the practice breaks Microsoft licensing contracts and can lead to costly mandatory audits.

"Companies that do this are non-compliant," he said. "By contract the [Original Equipment Manufacturers] OEMs are required to report any customer that requests 'naked PCs' and it often triggers a software contract audit by Microsoft. Audits are a pain and they always find things that you didn't expect - we've seen surprise seven figure bills go to those that were caught."

This means that, in effect, Microsoft's volume licensing packages can only be used for upgrades to existing full operating system licences.

These full licences can only be bought through an OEM PC supplier pre-installed on the machine, and in the retail market.

One IT manager from a financial services Microsoft user told vnunet.com the situation is confusing. He said that the main problem lies with Microsoft not allowing pre-installed software to be switched between PCs.

"I will be considering this when I put my budgets together for next year," he said. "It would be much easier however if Microsoft removed any hassles about moving OEM-installed software between machines.

"I'll let them decide the best way to do that and then decide whether that is better than the 'bare PCs with volume licensing' solution," he added.

Microsoft was unavailable for comment.