Unactivated Windows 10 VMs in a Preconfigured Virtual Machine Product

Question

Unactivated Windows 10 VMs in a Preconfigured Virtual Machine Product

Hubertus van der Merwe 0

I operate a small business based in South Africa that distributes virtual machines designed to streamline the user onboarding process for various workflows.

We distribute preconfigured virtual machine environments to customers — typically developers, hobbyists, and students — who are seeking ready-to-use tools without having to manually install and configure everything from scratch.

Each VM includes:

A clean, unmodified installation of Windows 10 Pro
No product key or license is provided
The OS remains in its default unactivated state, with all Microsoft branding and activation reminders intact
We clearly disclose to end users that Windows is unlicensed and that they are responsible for activation

Is this allowed or do I need some sort of special license or agreement with Microsoft?

1 answer

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Answer 1

Mark Dicks 640

Hi Hubertus van der Merwe, I'm a fellow South African too!

Distributing unactivated Windows 10 VMs to third parties without a license from Microsoft is generally not allowed. You are distributing Microsoft’s copyrighted OS, which requires proper licensing, even if unactivated and with disclaimers. To remain compliant, you should seek a licensing agreement from Microsoft or adjust your product offering accordingly.

If you need more details about this let me know.
Licensing terms are global, but regional resellers or Microsoft South Africa might offer specific guidance: Microsoft South Africa

Hubertus van der Merwe 0 Reputation points

2025-06-13T11:35:31.5033333+00:00
Hi Mark,

Really appreciate the fast response!

Does Microsoft offer a license or agreement to distribute unactivated versions of Windows 10 Pro? From what I can tell they don't.

I see a lot of conflicting information about my question online, such as:

“Windows 11 is a bring your own license VM. This means that you'll need to buy a qualifying license which you confirm you have…”
Sources:
https://forums.tomshardware.com/threads/activation-and-virtual-machines-fact-check-please.3751468
https://learn.microsoft.com/en-us/answers/questions/1634473/force-to-confirm-i-have-an-eligible-windows-10-11

Google Cloud confirms that if you bring your own Windows Server license, you pay only for infrastructure—it doesn’t penalize you for distributing unlicensed VM images:> “a virtual machine running your own BYOL‑eligible Windows Server license… will only accrue infrastructure costs, but no additional Windows Server licensing costs are applied.”

Source: https://cloud.google.com/compute/docs/instances/windows/ms-licensing

Microsoft permits BYOL models where users bring their own license (Windows 11 Q&A)
Source: https://docs.oracle.com/en-us/iaas/Content/Compute/References/microsoftlicensing.htm

BUT, then other sources say what you say, so I'm really not sure who to believe anymore, was hoping I could get a concrete answer here.
Mark Dicks 640 Reputation points

2025-06-13T11:59:39.4266667+00:00
I took some time with this answer reading everything, so not as quick but I tried.

Microsoft's licensing for Windows in virtualized environments is notoriously complex, fragmented, and often inconsistently applied, especially when it comes to BYOL (Bring Your Own License) and the legality of distributing unactivated Windows VMs.

Does Microsoft Offer a License to Distribute Unactivated Windows 10 Pro VMs?

No. Microsoft does not offer any public license or agreement that allows you, as a third-party business, to distribute unactivated Windows 10 Pro VMs to others for general use, even with disclaimers or a "BYOL" (Bring Your Own License) model.

So Why Does BYOL Exist for Cloud Platforms?

You're correct: BYOL is allowed, but only in specific, tightly regulated contexts.

Examples:

Azure, AWS, Google Cloud, Oracle Cloud Infrastructure: These are Microsoft-licensed partners under the SPLA (Service Provider License Agreement) or equivalent.

Customers must already own qualifying licenses with Software Assurance or certain Volume Licensing agreements to bring their own Windows license.

These are enterprise/organizational arrangements, not general consumer distribution permissions.

What Microsoft Offers for VM Distributors (Legit Paths)

Microsoft Volume Licensing or Enterprise Agreement You could technically provide pre-activated Windows environments to users within your organization or under strict enterprise terms, but not resale to the public.

Service Provider License Agreement (SPLA) This allows hosting Windows Server VMs, but does not cover Windows 10/11 Pro or Enterprise as a client OS for redistribution.

Azure Virtual Desktop (AVD) This is the officially sanctioned way to distribute managed Windows VMs to users. Must be hosted on Azure.

What's really going on with the sources

Tom's Hardware / Microsoft Q&A / Forums: Community answers, helpful, but not legally binding.

Oracle/Google Docs: They’re referring to Windows Server or Windows Enterprise BYOL, and only in the context of licensed, cloud-hosted enterprise environments.

"No Windows license fees on Google if BYOL": True, only if the customer has a qualifying license (e.g. Volume License with SA). You cannot legally copy or redistribute Microsoft's binaries as a third party just because activation hasn’t happened yet.

Concrete Answer

No, Microsoft does not permit independent businesses to distribute unactivated Windows 10 Pro VMs to third parties, even with clear disclaimers and a BYOL policy

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Unactivated Windows 10 VMs in a Preconfigured Virtual Machine Product

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