OLE (Object Linking and Embedding) allows embedding content from one application (like an Excel spreadsheet) into a document from another (like Word). For the embedded OLE object to open and function properly, the source application used to create it must be installed and accessible on the receiving system. OLE relies on specific integration paths between applications on the same Windows system. If the required application isn't present, the object cannot activate, edit, or sometimes even display correctly.

A common example is embedding an Excel chart into a Word document. The chart appears visually in Word. However, double-clicking it to edit requires Excel on the target machine. Similarly, a PowerPoint presentation containing an embedded Visio diagram will not allow editing of that diagram unless Visio is also installed on the computer opening the presentation. This dependency is central to how OLE functions interactively.

The primary advantage is seamless editing within compound documents. However, the significant limitation is the strict dependency on having the exact source application available, leading to failure on systems without it. Version mismatches or security restrictions blocking activation can also cause issues. This inherent fragility makes OLE unreliable for sharing documents across diverse environments and is a key reason modern platforms favor cloud-based collaboration or embedding self-contained objects like PDFs or static images for wider compatibility.