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Ten Things You Need to Know About Microsoft Software Licensing



Microsoft software licensing is a complicated subject, but understanding just a few key concepts can help you get the best value from your Microsoft investment.

Here are the top facts to get you started:

  1. Microsoft sells through a global network of resellers.  Most medium and large sized companies and government agencies have volume licensing agreements which cover all their Microsoft products. This makes it easy to add new products and get the best discounts available. Your reseller will offer the best discount and can add products to your volume licensing agreement where applicable.
  2. Volume licensing is available for small and large customers. Microsoft segments its programs for organizations from 5-250 licenses (Open Value, Open Value Subscription, Open License and Microsoft Online Services) and 250+ licenses (Enterprise Agreement, Microsoft Products and Services Agreement, and Select Plus).  
  3. Azure is sold based on actual usage.  Microsoft Azure and Azure Government are subscription services which allow you to scale resources up and down as needed.  Therefore, your bill is based on actual usage, like a water or electricity bill.  The Microsoft Azure pricing calculator helps you predict the costs. 
  4. Some products are available in more than one licensing model. Historically, the most common model is perpetual licensing based on servers and named user client access licenses (CAL).  The fastest growing model is cloud subscriptions such as Office 365 and Dynamics CRM Online. 
  5. Software Assurance provides product version upgrades and other benefits. In addition to product support, you may be eligible for deployment planning services, technical and end-user training. 
  6. Original Equipment Manufacturer (OEM) licensing is for pre-installed software on hardware that you purchase.  For instance, your laptop or server may come pre-loaded with the operating system and other programs.  This license is good for the life of the hardware but may not be reassigned to new hardware. 
  7. Microsoft manages licenses through software keys.  These are the codes that you enter when you activate or install software.  Many laptops come loaded with a trial edition of Microsoft Office or other product  This is a functional version of the product which limits the time you can use it.  By entering a valid product key, the software license is changed from trial to the full product. 
  8. Microsoft Volume Licensing offers programs for government, education, healthcare, and nonprofits.   If your organization falls into one of these categories, you are eligible for special offerings and pricing.  For instance, U.S. government agencies are eligible for the Microsoft Government Cloud and qualified non-profits are eligible for Microsoft charity pricing. 
  9. Microsoft License Advisor is a web-based tool to help you research licensing options. You can create sample quotes for many Microsoft products. 
  10. Microsoft offers financing for volume licensing. You can spread out payments based on your business and financial needs. 
You don't have to become an expert on Microsoft licensing, but it helps to consult with one from your Microsoft reseller or services partner like InfoStrat.

Related posts: Microsoft Software Licensing for Non-Profits


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