Recommended Practices: Licensing Microsoft professional software
This is a multi-part series on recommended IT practices for organizations and their end-users. Additional parts will be included in upcoming newsletters.
Microsoft software licenses can be categorized by their function:
- User-oriented applications – Microsoft Office, Visio, Project, etc.
- Operating systems – Windows, Windows Server, Windows Mobile, etc.
- Server-based applications – Exchange Server, SQL Server, SharePoint, etc.
- Access to server-based apps – Client Access Licenses (CALs); user or device
Microsoft offers these methods for purchasing licenses from outside vendors, arrayed from least expensive to most expensive:
- Original Equipment Manufacturer (OEM)
- Open Volume Programs (OVPs)
- Fully Packaged Product (FPP)
Original Equipment Manufacturer
OEM is sold preinstalled on a hardware device, like a PC or a server. It is a non-transferrable license that must be retired when decommissioning the hardware device. For example: Most Original Equipment Manufacturers (Dell, HP, etc.) provide OEM Windows 8.1 licensing with their new PCs; these licenses end when the PC is retired or no longer functional.
Open Volume Programs
OVPs are volume-purchase options for transferrable licenses that can be either perpetual or subscription-based. (A perpetual license lives forever, but does not include version upgrades; subscription-based licenses provide version upgrades, but require periodic payment.) Open Volume Programs include:
- Open Business – For-profit, commercially oriented companies
- Open Government – Local, state, and federal agencies
- Open Charity – Non-profit, charitable organizations
- Open Value – Subscription-based licensing
OVPs requires an initial, minimum purchase of five licenses to establish an Open Volume license agreement; these agreements have a two or a three year term. With a valid Open Volume license agreement, additional licenses may be purchased in any quantity during the agreement term.
Fully Packaged Product
FPP (also known as Retail) comes packaged with documentation and installation media and is transferrable. Many small organizations purchase FPP licenses at their local retailer or online to enable licensing for Microsoft Office and similar products.
- Purchase one server and one server-application license for each server, whether virtual or physical.
- Purchase one CAL for each user or device that accesses the corresponding server application. For example: Microsoft Exchange Server requires one Exchange Standard CAL for each user.
- All new-installation licenses must be Full, rather than Upgrade, licenses; less-expensive Upgrade licenses can only be used to update existing Full
- When transferring a FPP or OVP license, it must be first removed from the former platform before being installed onto the new platform.
Some exceptions to these rules:
- One Windows Server Data Center edition license permits the licensing of unlimited, virtual Windows Servers on one physical host.
- SQL Server Enterprise and SQL Server Standard can be licensed by processor core, rather than by CAL, for mission-critical applications.
- One Exchange Enterprise Add-on CAL also requires one Exchange Standard CAL; however, not all users require an Exchange Enterprise Add-on CAL.
Some validation guidelines:
- OEMs should affix both a Genuine Microsoft Label (with hologram) and a Certificate of Authenticity (COA) that identifies the product and its license number to each PC with Microsoft Windows and to each server with Microsoft Windows Server.
- Valid OEM and FPP packages always ship with a Genuine Microsoft Label and a COA; valid media DVDs should have an identifying hologram.
Check licensing validity at Microsoft’s How to tell website.
- The licensing method selected should match the needs and financial requirements of the purchasing party. For details, see Microsoft’s Software Asset Management
- Purchase Microsoft licenses only from a trusted, Microsoft Certified Partner.
- Avoid any licensing deals that look too good to be true; they probably are.