Object Linking and Embedding (OLE) focuses on document formats rather than on an application's ability to exchange data, as implemented using the DDE approach. OLE is concerned with sharing functionality as opposed to sharing data. The better the application of OLE, the less the concern with programs as opposed to their data.
All OLE transactions involve a client application and a server application. The server creates the embedded or linked document and is activated when any activity beyond display is required; the client packages and renders the object within its own document.
OLE objects are packaged within client documents either statically (embedded) or dynamically (linked). The entire contents of an embedded object, including references to the server application, are included in the client document.
OLE defines a format for compound documents which contain multiple forms of data. The data formats are understood and managed by multiple applications. The application uses various combinations of data to construct a compound document.