OEM stands for ” Original Equipment Manufacturer “. OEM software refers to applications that are sold to computer manufacturers and hardware manufacturers in bulk, for the purpose of bundling with computer hardware.
In other words, OEM is a licensed copy of the software provided by the software manufacturer to a computer manufacturer for pre-installation on a computer that is being sold to a customer. A backup copy may or may not be provided on CD to the end user along with the equipment.
For example, Microsoft has contracts with several hardware companies, including Dell, Toshiba, Gateway, and others. To those companies, Microsoft sells its operating systems at a reduced price, this type of sale and distribution is known as OEM.
Resellers install the OEM application on the equipment they sell and install the application’s user manuals, which are basically part of the software and are presented as a help menu.
In many cases, this OEM software package is a demo version of a program that is sold as a stand-alone product, in order for the user to become familiar with the application and purchase the product after the testing stage. An example of this is Microsoft Office that is distributed with new computers, but is only available for 30 days, after which a license must be purchased for use.