diff --git a/cloudbaseinit/osutils/base.py b/cloudbaseinit/osutils/base.py
index 4ccd3530..f22bf8f4 100644
--- a/cloudbaseinit/osutils/base.py
+++ b/cloudbaseinit/osutils/base.py
@@ -17,6 +17,7 @@
 import base64
 import os
 import subprocess
+import sys
 
 
 class BaseOSUtils(object):
@@ -35,12 +36,17 @@ class BaseOSUtils(object):
         b64_password = base64.b64encode(os.urandom(256))
         return b64_password.replace('/', '').replace('+', '')[:length]
 
-    def execute_process(self, args, shell=True):
+    def execute_process(self, args, shell=True, decode_output=False):
         p = subprocess.Popen(args,
                              stdout=subprocess.PIPE,
                              stderr=subprocess.PIPE,
                              shell=shell)
         (out, err) = p.communicate()
+
+        if decode_output and sys.version_info < (3, 0):
+            out = out.decode(sys.stdout.encoding)
+            err = err.decode(sys.stdout.encoding)
+
         return (out, err, p.returncode)
 
     def sanitize_shell_input(self, value):
diff --git a/cloudbaseinit/plugins/windows/licensing.py b/cloudbaseinit/plugins/windows/licensing.py
index 96820314..a493d64a 100644
--- a/cloudbaseinit/plugins/windows/licensing.py
+++ b/cloudbaseinit/plugins/windows/licensing.py
@@ -46,7 +46,7 @@ class WindowsLicensingPlugin(base.BasePlugin):
         slmgr_path = os.path.join(slmgr_dir, "slmgr.vbs")
 
         (out, err, exit_code) = osutils.execute_process(
-            [cscript_path, slmgr_path] + args, False)
+            [cscript_path, slmgr_path] + args, False, True)
 
         if exit_code:
             raise exception.CloudbaseInitException(
diff --git a/cloudbaseinit/tests/osutils/test_base.py b/cloudbaseinit/tests/osutils/test_base.py
new file mode 100755
index 00000000..d47cc0fd
--- /dev/null
+++ b/cloudbaseinit/tests/osutils/test_base.py
@@ -0,0 +1,56 @@
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright 2014 Cloudbase Solutions Srl
+#
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+import mock
+import subprocess
+import sys
+import unittest
+
+from cloudbaseinit.osutils import base
+
+
+class BaseOSUtilsTests(unittest.TestCase):
+
+    def setUp(self):
+        self._base = base.BaseOSUtils()
+
+    @mock.patch('sys.stdout')
+    @mock.patch('subprocess.Popen')
+    @mock.patch('subprocess.PIPE')
+    def test_execute_process(self, mock_PIPE, mock_Popen, mock_stdout):
+        args = [mock.sentinel.fake_arg]
+
+        mock_p = mock.MagicMock()
+        mock_out = mock.MagicMock()
+        mock_err = mock.MagicMock()
+        mock_Popen.return_value = mock_p
+        mock_p.communicate.return_value = (mock_out, mock_err)
+
+        response = self._base.execute_process(args, shell=True,
+                                              decode_output=True)
+
+        mock_Popen.assert_called_once_with(args, stdout=subprocess.PIPE,
+                                           stderr=subprocess.PIPE, shell=True)
+        mock_p.communicate.assert_called_once_with()
+
+        if sys.version_info < (3, 0):
+            mock_out.decode.assert_called_once_with(mock_stdout.encoding)
+            mock_err.decode.assert_called_once_with(mock_stdout.encoding)
+            self.assertEqual((mock_out.decode.return_value,
+                              mock_err.decode.return_value, mock_p.returncode),
+                             response)
+        else:
+            self.assertEqual((mock_out, mock_err, mock_p.returncode), response)
diff --git a/cloudbaseinit/tests/plugins/windows/test_licensing.py b/cloudbaseinit/tests/plugins/windows/test_licensing.py
index 1894ceec..86cb4309 100644
--- a/cloudbaseinit/tests/plugins/windows/test_licensing.py
+++ b/cloudbaseinit/tests/plugins/windows/test_licensing.py
@@ -64,7 +64,7 @@ class WindowsLicensingPluginTests(unittest.TestCase):
             get_system32_dir_calls.append(mock.call())
 
         mock_osutils.execute_process.assert_called_once_with(
-            [cscript_path, slmgr_path, 'fake args'], False)
+            [cscript_path, slmgr_path, 'fake args'], False, True)
         self.assertEqual(get_system32_dir_calls,
                          mock_osutils.get_system32_dir.call_args_list)