Ok, a few developments since yesterday. I've had an answer from Microsoft, but have also found the EULA for this installation of windows.

Microsoft's response:
"This is not covered under the OEM licensing. From a licensing
perspective Microsoft views virtual machines as separate computers - and
hence the OEM license is bound to the physical computer and can't be run
in the virtual machine."

However, this opinion would not appear to be supported by the text of the EULA, hence my reply to Microsoft:

"I'd be very interested to hear where exactly in the EULA that restriction is mentioned.

From my own reading of the EULA there would appear to be no such restriction, in fact the definition of the computer the licence is attached to seems quite specific:

"The term "COMPUTER" as used herein shall mean the HARDWARE, if
the HARDWARE is a single computer system, or shall mean the
computer system with which the HARDWARE operates, if the
HARDWARE is a computer system component."

And the licence granted similarly clear:

"you may install, use, access, display and run only one (1) copy of the SOFTWARE on the COMPUTER."

That would appear to be saying that I can run one copy of this software on that computer. I do not see any restrictions on what other software I can run on that computer, nor a restriction on the specific method I choose to employ to run the SOFTWARE on that COMPUTER.

So it would appear to me that unless Microsoft can say where in this licence these restrictions occur I'm quite within my licence to do this. Of course, if this is not the case I would expect Microsoft to be able to correct me on this."

I'm waiting for a reply from Microsoft, but to me it seems quite clear that my licence does not preclude me from running a virtual machine in this way, regardless of what Microsoft would like us to think.

Ross

Aaah, but that's exactly my point; a virtual machine doesn't contain it's own hardware. The HARDWARE microsoft refer to is the original hardware purchased with Windows. The virtual machine is a software package and it's use or otherwise is not mentioned in the EULA.

The point is that even though VMware emulates a computer, the EULA has to go by it's own particular definition of HARDWARE.

That means that your argument isn't applicable given the original EULA text. HARDWARE and COMPUTER are defined in the EULA to mean the original computer that the OEM software was purchased with:

"IMPORTANT-READ CAREFULLY: This End-User
License Agreement ("EULA") is a legal agreement between you
(either an individual or a single legal entity) and the
manufacturer ("Manufacturer") of the computer system or
computer system component ("HARDWARE") with which you acquired
the Microsoft software product(s) identified on the
Certificate of Authenticity ("COA") affixed to the HARDWARE"

"The term "COMPUTER" as used herein shall mean the HARDWARE, if
the HARDWARE is a single computer system, or shall mean the
computer system with which the HARDWARE operates, if the
HARDWARE is a computer system component."

So HARDWARE for the purposes of this agreement is specifically the computer I bought that has a COA sticker attached to it. The HARDWARE is a single computer system, hence the first sentence of the 2nd paragraph applies and the COMPUTER is that particular HARDWARE. In this case my Dell computer. You could not argue that VMware was HARDWARE by that definition, especially since it wasn't included in the original purchase.

Furthermore, even if I were to ignore this and accept your argument that VMware is hardware, it's irrelevant. The EULA doesn't preclude me from adding additional hardware to the original machine (any clause like that would prevent upgrades and would have been rediculous). That means that even if we define VMware to be hardware, since I'm still running the SOFTWARE on the original HARDWARE, I'm in compliance with the licence, specifically with the line:

"you may install, use, access, display and run only one (1) copy of the SOFTWARE on the COMPUTER."

Now since I'm in compliance with that, the only other problem I could face would be if I'm breaking the conditions of any other clause in the EULA. Unless anyone can point out a specific clause that I am in violation of, I believe the EULA holds and my licence is valid.

If anybody does want to check this for themselves, the EULA can be found as EULA.TXT, usually in the i386 folder of the original Windows media.

Ross