Microsoft Licensing

In Five Easy Steps

Contents

Introduction

Step One:

The Basics

Step Two:

Taking Stock

Step Three: Foresight and Planning

11

Step Four:

Making Your Decision

13

Step five:

Buying Your Licences

17

Introduction

Acquiring IT solutions for your organisation is no easy task. Youve got to

meet todays demands whilst predicting tomorrows; all within a fixed
purchasing strategy. And because youll be acquiring software a nontangible asset your shareholders may not immediately see that what
youre purchasing is vital to the business. However, youre making an
important investment.
Across APAC, millions of organisations invest in Microsoft software to meet their
objectives, solve their problems and stay competitive, from desktop applications such as
Microsoft Office to operating systems like Microsoft Windows.
While these organisations rely on Microsoft to maintain their edge and their efficiency,
they dont actually buy our software, they buy the right to use it. This guide is designed
to explain and clarify the various ways to acquire licences for Microsoft products and
give you the confidence to make the right choices for your organisation.
Be confident that youre choosing the right licence for the software you want
Be confident that youre balancing financial and IT needs
Be confident that youre complying with the law
Essentially this guide is all about giving you peace of mind today and a clear reference
for the future. We understand that acquiring IT solutions is a challenge, and wed like to
help, long term.

Your solution, step-by-step

To make the whole licensing process as clear as possible, weve divided the information
into five easy steps. Stage by stage you can begin to grasp exactly how Microsoft
licenses products and how licensing works. You can also discover how to save your
organisation money through Microsoft Volume Licensing. The whole point is for you to
arrive, in five easy steps, at the solution your company can take full advantage of.

Step One: The Basics

Here we explain what Microsoft licences are and why they matter. We take you through our
different types of licences and what you need when you acquire Microsoft products.

Step Two: Taking Stock

Learn about the benefits of auditing your software and IT assets across the organisation and
how to do it.

Step Three: Foresight and Planning

How do you keep pace with ITs ever shifting demands? This section highlights the importance
of meeting todays software needs, while understanding short and long term acquisition
practices.

Step Four: Making Your Decisions

Using your IT audit and business plan as a launch pad, here we guide you through the software
purchase process and help you to make the best possible choices for your organisation.

Step Five: Buying Your Licences

Where do you go to buy licences and products? Step Five includes details on how to get in
touch with a reseller.

Step One: The Basics

What is a licence?
Software is basically intellectual property. So, when we sell to you, were not selling a product,
but the right to use it. This defines neatly what we mean by licence it is your right to use the
software. For example, when you buy a Microsoft Office CD in the shop as Full Packaged
Product (FPP), you are acquiring a physical copy of the program and a licence that allows you to
use it. The CD lets you load and install the program, but the licence grants you the right to run
and access it.

Microsoft issues two types of licence agreements, depending on how you

purchase
Microsoft Software License Terms (MSLT) Formerly known as the End User License
Agreement or EULA. This type of agreement comes with Full Packaged Products (FPP) that you
buy off the shelf from retailers and pre-installed software bought from Original Equipment
Manufacturers (OEM). The MSLT details the usage terms and conditions associated with the
product. Youll usually find this agreement printed in the product packaging and displayed on
screen during initial installation.
Microsoft Volume Licence Agreement When purchasing more than five licences for
Microsoft products, you will probably be advised to go for a Volume Licence Programme such as
Open, Select or an Enterprise Agreement. Product Licenses purchased through a Volume
Licensing program are governed by the Product Use Rights (PUR) together with the Microsoft
Volume Licensing program agreement. The PUR contains the product-specific terms and
conditions that govern how Microsoft products can be used in the Volume Licensing
programmes. It is the equivalent of the MSLT.
Both these types of agreement define product usage and the obligations of both Microsoft and
you. Naturally you are required to accept the terms and conditions before using your software.

Step One: The Basics

What your licence does

Your licence provides you with the legal rights to use and access the products and services that
we offer under that licence. The core function of your licence is to give you the legal proof that
you have the right to use what you have purchased. There are three areas to consider when
procuring software:

Desktop
This is your PC or laptop on your desk used to run applications. Every machine will need a
licence for its Operating System such as Windows 7 Professional and additional licences for
each application used - such as Microsoft Office 2010 and Visio 2010. In other words, each
desktop is likely to need several licences.

Server
Your organisation may also run server software. If so, there will be a licence requirement for the
Operating System such as Windows Server 2008 R2 or similar plus additional licences for
every server application you may use (e.g. Microsoft SQL Server, Microsoft Exchange Server,
Microsoft BizTalk Server, etc.). These licences allow you to run these services on the server
but exclude user connectivity.

Client Access Licence (CAL)

Like most organisations, yours probably has a mixture of servers and desktops, which clearly
need to be connected together. Every user that needs to connect, log on to, or access resources
on a server, will need a licence to access these services, called a Client Access Licence (CAL).
For example, if there is a need to connect to a server for file and print services, such as
Exchange Server, a licence is required to access these services i.e. an Exchange Server CAL.
CALs come with OEM server software, Full Packaged Product, or through a Volume Licence
Agreement. Your reseller can advise you on the best licence for you.
The illustration below shows the licences needed in a desktop and server relationship

1 x Windows Server CAL

1 x SQL Server CAL

1 x Windows 7 Professional
1 x Office 2010 Professional

1 x Windows Server 2008 R2

1 x SQL Server 2008 R2

Step One: The Basics

Hopefully you now know what you need, so the next section highlights how best to get
what you need from Microsoft.
There are basically four different ways to acquire your Microsoft products:

1. Buy boxed software known as Full Packaged Product (FPP)

2. Buy pre-installed software on a new PC, known as Original Equipment Manufacturer
(OEM) software
3. Buy your software in volume through a Volume Licence Programme such as Open
Licensing
4. Buy subscription licences to Microsofts cloud services

The table below compares the three first options

OEM

FPP

Volume Licensing

Customer
Profile

Organisations buying a
new PC

Organisations buying 1
or 2 licences

Organisations buying 5
or more licences

Key Benefits

Pre-installed on the
machine with technical
support from OEM.

Software, CD, manual

and licence terms in the
box. Licence
transferrable to new PC
(provided it has been
uninstalled from first
one)

Lower cost, flexible

options, simplified
licence management
and installation

Product Key Card (PKC)

can be purchased to
unlock pre-installed
versions of products
such as Office 2012

Payment
Terms

Paid for with PC

Paid in full at time of

purchase

Variety of payment
options depending on
programme

Restrictions

Licence lives and dies

with machine.
Product CD may not be
provided

Not cost effective for

most companies buying
more than 5 licences.

Programmes have
different max user
numbers, and not all
products are available in
all programmes

Difficult to administer
and manage multiple
boxes

Step One: The Basics

For people seeking software for an organisation, Volume Licensing provides clear advantages.
Thats why most of this guide concentrates on the features and choices that it brings.
Those clear advantages include:
Attractive pricing and predictable cost options

Improve
Cost
Control

Reduce
Management
Burden

Streamlined software licences with centralised purchasing

Access to Software Assurance gives access to spread payments

Maximise your hardware investments - Hardware licence reassignment
rights allow you to reassign non-Windows desktop licences and Software
Assurance within the organisation from one PC to another

Set price level for additional licences, reduce paperwork and reduce risk
of non-compliance
Additional product use rights to help standardise and speed up internal
deployment:
Reimaging rights - copy software onto multiple devices from one
standard image.
Downgrade rights allow customers to use a prior version of the
product
Add Software Assurance to benefit from latest software versions, 24
x7 support, home usage rights and learning.

Cloud services
If you chose not to run your software on-premise, or want a mixed environment, Microsofts
Cloud Services is a service hosted by Microsoft. The services can be purchased through
subscription licences to services such as Microsoft Office 365 and Microsoft Dynamics CRM.
Subscription licences are either per user or per device depending on the type of service. They
can either be purchased through the Microsoft Online Services Agreement (MOSA) or added
through some of our Volume Licensing Programmes (currently Enterprise Agreement, Enterprise
Subscription Agreement, Open Value and Open Value Subscription).

Weve talked about what licences are and the advantages of Volume Licence
Agreements, but naturally youll want to establish your exact software requirements
before buying. The next two steps are designed to help you audit and plan your IT
strategy, so that your purchases are compliant today and far into the future.

Step Two: Taking Stock

Know your IT assets

To work out what your best software options are, first take stock of your current technology this
includes software and hardware and the licences you hold. To help you do this, we
recommend you implement a Software Asset Management (SAM) process. This will help you
recognise what youve got, where its running, where it can best be utilised, what overlaps you
may have and whats needed in terms of licensing. By having policies and procedures to
manage procurement, delivery, deployment and support of all your software, you can learn
exactly what software you have. You will then be better placed to license what you need and to
maximise your assets.
Keeping an up-to-date and accurate record of your hardware, software and licences can benefit
your business in other ways too. For example, you will have the right information at hand if you
require support from a supplier; need details for an insurance claim or for auditing. This will help
you not to overspend on licences, avoid fines, unexpected charges and corrective licence fees.

Understanding what software you have

It is possible to perform a manual software inventory, but for larger organisations and for greater
accuracy, we strongly recommend the use of a SAM partner to perform this process.
1. Automatic inventories and SAM partners:
There are a variety of tools available to perform an automatic inventory of your company's PCs
and servers. To gain maximum benefit from SAM we strongly recommend that you consult a
dedicated SAM partner who will be able to interpret the data generated from these tools and
reconcile this against your purchased software licences most effectively. SAM partners are
advisers who offer a variety of services to help customers better manage their IT infrastructure
and achieve best practice.
For information on tools and partners visit:
https://partner.microsoft.com/40019038?msp_id=samservices

2. Manual inventories
If you choose to perform a manual inventory, we recommend you record at a minimum the
following:
Device (e.g. desktop PC, laptop PC, server, personal digital assistant, mobile phone)
Date of purchase
Serial number (where appropriate)
Operating system (e.g. Microsoft Windows XP)

Software packages (e.g. Microsoft Office)

Invoice and any related documentation (e.g. purchase order)

Step Two: Taking Stock

Managing your licences

Licences acquired through a Volume Licensing Programme are managed online through the
Microsoft Volume Licensing Service Center (VLSC). With this online tool you can manage your
licences for Open License, Open Value and Open Value Subscription, Select License, Select
Plus, Enterprise Agreement and Enterprise Subscription Agreements. You can use the VLSC to
download licensed products, access product keys, and manage your Volume Licensing
agreement and licence acquisition activity all in one online location. You can find the Microsoft
Volume Licensing Service Center at: https://www.microsoft.com/licensing/servicecenter
For Full Packaged Product and OEM (pre-installed software on a PC), we encourage you to
keep your own records of your software purchases, for example by keeping the original invoices,
the End User Licence Agreement (if applicable), and the Certificate of Authenticity (COA) on the
box.
For OEM or pre-installed software, the Certificate of Authenticity can be found on the chassis of
the PC.

Check that youre legally licensed

Volume Licensing - Its very straightforward to ensure that your Volume Licences are legal,
because they are now all purchased electronically you can use VLSC to manage these
agreements. Its still important however to keep hold of legal documentation for your software,
such as the invoice from your reseller.
OEM licences - Any PC that you buy should have an OEM licence, so make sure that you
record the licence as part of your purchase. To guard against buying counterfeit software,
always check new PCs for a Certificate of Authenticity (COA) label and documentation.

Youll find COA labels on the chassis of the PC, except in the case of some older machines,
where you should find the COAs on accompanying manual covers.
Its important to replace any COA that is damaged, and you can do this by contacting the
supplier who originally sold the PC.

FPP licences - Youll need to record the purchase of Full Packaged Product software too. You
need to keep the original invoice, the Microsoft Software License Terms (which is usually in
electronic form), the COA label (found on the box) and any other contents in the box.

Learn to spot counterfeit software at: http://www.microsoft.com/enus/howtotell/default.aspx

For detailed information on software piracy and your responsibilities, please visit:
www.microsoft.com/piracy
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Step Three: Foresight and Planning

In todays demanding and competitive business environment, your software needs are likely to
change rapidly. So having audited your current software and evaluated your current licences
and requirements, its time to consider how your IT infrastructure might need to evolve.

Planning for today, tomorrow and the future

To take full advantage of your best buying options, it pays to plan over one, three and five years.
Within that time there are many potential changes you should consider, and questions to
include:
How many employees will the business have?

Will your employees use several computers, a single computer, a desktop or a laptop?
Are you considering any projects that will impact on software use, such as hosting a website?
Will customer, supplier or partner demands mean that you need to upgrade or change
software?

Will hardware need replacing and upgrading?

How will you support your software implementation and management?
How will you ensure maximum ROI from your software?

Software maintenance and Software Assurance

The procurement of software is just the start of your solution, you also need to consider how to
get the maximum benefit from it over time. So beyond buying and getting it up and running as
fast as you can, you also need to maintain your chosen solution on an on-going basis. To get
the best returns and benefits from your software, a maintenance programme must integrate both
your business and technical demands. Like any healthy, growing organisation, what you really
need is a complete software licence procurement solution.
For Volume Licensing customers, Microsoft offers
a maintenance programme called Software
Assurance which can help you use and manage
your software. Software Assurance offers a broad
range of benefits in one programme, combining
the latest software with tools and resources to
help you deploy, manage, and use the software.
These benefits help increase the return on your
technology investment by supporting budget
predictability, lowering operating expenses,
improving productivity, and minimising downtime.
Customers who have purchased OEM or FPP
licences have the option of adding Software
Assurance through a Volume Licensing program
within 90 days of purchase.

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Step Three: Foresight and Planning

The table below provides an overview of some of the key benefits of Software Assurance.
Please note that not all benefits are available through all Volume Licensing programmes.
For more information visit: http://www.microsoft.com/licensing/software-assurance/default.aspx

Key Software Assurance benefits

New Product Versions

Provides new software version releases so you always

have access to the latest technology

Windows 7 Enterprise

Helps organisations increase desktop productivity by

enabling standardisation, improving security features and
multi-language support

Planning Services

Provides structured planning services from Microsoft

partners to enable efficient deployments of Microsoft
application, system and server products, and cloud
services

Training Vouchers

Provides in-depth technical classroom training for IT

professionals and developers

E-Learning

Offers self-paced interactive training designed for endusers and IT professionals

Home Use Program

Provides employees with the latest version of Microsoft

Office for their home computer, via low cost download

24x7 Problem Resolution Support

Provides around-the-clock phone and web incident

support for Microsoft server and desktop products

Spread Payments

Payment for licence and Software Assurance may be

spread across three equal, annual sums

There are many more Software Assurance benefits, go to

http://www.microsoft.com/licensing/software-assurance/check-your-benefits.aspx for
more information.

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Step Four: Making Your Decision

Following your auditing and forecasting, youre now in a good position to pinpoint your software
needs. Of course you might have discovered that you simply dont need any more licences, or
that you can meet your licensing demands by getting a few boxed software packages. However,
if you need more than five licences like most businesses, read on.

Its time to take a close look at your Volume Licensing options. To make this easier, weve
created a series of decision making steps.

To own or lease?
Do you need to own the rights of your software forever (perpetual), or will temporary rights meet
your needs (non-perpetual)? There is a case for temporary licensing if, for example, you dont
have the budget to buy licences outright, or perhaps if the software is only needed for a specific
project, or if the finance department dont want to recognise the software in their accounts.
The next choice is how would you like to pay for your software licences? You can either pay
upfront, pay over a set period of time like a hire purchase style, or you can lease. To find out
about your ideal agreement type, choose first between the perpetual and non-perpetual
sections.

The perpetual options

Perpetual licence options, where you own the licence forever, come in two types: those you pay
for in a single transaction and those you pay for over a period of time like a hire purchase
agreement.

Pay In a Single Transaction

If youre happy to pay up front, when software is needed, these perpetual licences give you the
right to use your chosen software forever.
Open License
Agreement

This is ideal for small to medium sized businesses (5 - 250 seats) seeking
an easy one-off transaction, with the option to buy more licences when
theyre needed. To be eligible for an Open Licence, you need to buy five or
more perpetual licences, but the agreement gives you the freedom to add
more licences over a two year period at the same pricing level as on the
original order. Note that the price of additional products ordered are not
protected, but will be priced at the current pricelist price. Software
Assurance is optional.

Select Plus License

Agreement

Aimed at organisations with 250 or more PCs with mixed software

requirements, and who want transactional licence purchasing. This
agreement runs for three years. The key feature is that it increases
purchasing flexibility with automatic price savings based on purchase
volume across the entire organisation. Software Assurance is optional.

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Step Four: Making Your Decision

Hire purchase
If you would like to spread the cost of your licences over a period of time, you should consider a
hire purchase type programme. Naturally, at the end of the agreement, you will own the right to
use the software for as long as you wish.
Open Value
(Company-wide or non
Company-wide option)

Choose the Open Value Programme, and you can pay for your licences over
three years and benefit from the very latest software versions. With Software
Assurance built in, plus the option to standardise your desktop on one or
more Microsoft enterprise products, Open Value is tailor-made for small and
medium sized businesses. Select the Company-wide option for discounts on
organisation-wide deployment and price protection on initially ordered
products.

Enterprise Agreement

If your organisation runs 250 or more PCs, the Enterprise Agreement gives
you the benefit of standardising all desktops on Microsoft technology. The
licences include Software Assurance, which gives you new version rights
and support. Budgeting is made easy because all initially ordered products
are price protected throughout the agreement.

Non-perpetual options
These options are especially suitable if you seek the lowest cost for obtaining Microsoft licences
and only the latest technology. You have the right to use the software for a fixed period, and at
the end you can choose to renew the agreement, buy the perpetual licence or simply stop using
the software.

There are two non-perpetual licence types, which both allow you in effect to lease your ideal
software.
Open Value
Subscription

This option suits organisations with at least five desktop PCs, who wish to
standardise on Microsoft software and are looking for the lowest up-front
costs. The advantage is that you only pay for the right to use your software
over a three year period, so you enjoy low entry costs and pay annually for
what you actually use. Open Value Subscription includes Software
Assurance and a choice of platform products for additional savings. The
price is also protected for duration of agreement on initially ordered
products.

Enterprise
Subscription
Agreement

This is very similar to the Enterprise Agreement and best suited for
organisations with 250 or more PCs. The key difference being that you dont
buy permanent use of the software. This agreement is both flexible and
offers further reductions.

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Step Four: Making Your Decision

Summary of Programs Relevant to Customers with up to 250 PCs
Open Value
(NonCompany
Wide)

Open Value
(Company
Wide)

Open Value
Subscription

OEM

FPP

Open

Customer Profile

Organisations
buying a new
PC or Server

Organisations
buying 1 or 2
licences

SMBs
wanting an
easy one
time
transaction

SMBs wanting to
simplify licence
management

SMBs wanting to
standardise
software across
entire business

SMBs wanting to
standardise
software across
business and
benefit from not
owning software

Key Customer Benefit

For new
desktop
purchases, preinstalled and
lives and dies
on the machine

Solution for
under 5 PCs
includes:
software, CD,
manual and
licence terms in
the box

Own the
licence at the
end of the
term

Simplified licence
management and
spread payments.
Own licence at
end of term

Simplified licence
management and
spread payments.
Own licence at
end of term and
helps standardise
version across
company

Reduces licence
costs with a
leased-based
model and move
software from
CAPEX to OPEX

Minimum Entry
Requirements

No entry level

No entry level

5 licences

5 licences

5 PCS

5 PCs

Ideal Customer Size

All sizes

Sub 25 PCs

5 - 250

25-250

25-250

25-250

Agreement Term

N/A

N/A

2 Years

3 Years

3 Years

3 Years

Licence

Licensing
Offerings
Available

Licence &
Software
Assurance

Optional SA

Optional SA
added through
VL within 90
days

Optional SA
added through
VL within 90
days

Optional SA

Payment Term

Paid in full at
time of
purchase

Paid in full at
time of
purchase

Upfront in full

Upgrade Option

Can add SA
through VL
Agreement

Some upgrades
available

Optional SA

Does Customer Retain

Licences After Expiration
of Agreement?

Dies with
hardware

Software
Assurance

Payment split
over 3 years or
upfront

Payment split
over 3 Years or
upfront

Annual payments

Renewal or
optional buy-out

Upgrade ONLY licences available (customer needs a base OEM or FPP licence
on EVERY machine to upgrade)

Windows Operating
System Licence Options

Only legal way to licence base

Windows OS licence

Windows Professional/ Business or greater version required to upgrade through

Volume licensing. Note that Windows Home SKUs (Basic/ Premium) are not
suitable for business customers

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Step Four: Making Your Decision

Choosing the right programmes
Consider OEM for Operating System Licences

Do you need to buy new

hardware?

Yes

Note: OEM/ FPP only legal way to acquire base Windows OS

licence. Upgrade only licences available through Volume
Licensing programs.

No

Do you need to purchase 5 250

licences

No

Less than 5: Consider FPP (retail)

More than 250: Consider Enterprise Agreement or
Select Plus

No

Open License: Offers volume-based pricing and

flexibility to acquire licences as needed

No

Open Value Non-Company wide: Includes

Software Assurance benefits such as rights to new
versions of licensed software and flexibility to
spread payments over three years

No

Open Value Company wide: provides additional

savings to customers that acquire at least one
platform software component

Yes

Do you want to stay current with

the latest Microsoft Software
AND spread licence payment
over three years?

Yes

Do you want to standardise on

Windows, Office or Microsoft CAL
suites?

Yes
Do you need the lowest upfront
costs or have fluctuating desktop
count, and/or do you want to
subscribe to Microsoft Software?

Yes

Open Value Subscription: an organisation-wide

program that delivers flexibility and short-term cost
reduction on non-perpetual licences

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Step Five: Buying Your Licences

Avoiding counterfeit software

As we write, there is no regulatory body covering IT resellers, and counterfeit software is still in
circulation. Some resellers deliberately sell counterfeit software, but others do so in good faith.
Buying from either could see you breaking the law.
When buying boxed software off -the-shelf, make sure it is from a reputable retailer. If you are
buying Volume Licences or licences that form part of a consultancy or support package, you will
need to be a little more vigilant for the reasons weve already discussed.
The good news is that by establishing a few facts, you can ensure that your reseller is offering
genuine Microsoft software.
Vitally, they must have specialist licensing expertise or access to someone who has.
They should be able to offer a choice of ways in which to purchase your licences.

Be particularly wary if a reseller claims to buy from a broker. They might be dealing in counterfeit
or illegally imported software, knowingly or otherwise.
If you are buying FPP or OEM licences always check for the Certificate of Authenticity (COA).

For more information on software compliance and details of how to contact us, please
visit: http://microsoft.com/piracy.

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Step Five: Buying Your Licences

We develop software...
...and because thats what we specialise in, we depend on our resellers to sell our software to
you, while offering appropriate advice and support.

Naturally, customer needs vary, and so do our resellers, ranging from independent consultants
to shops and large outlets that offer more extensive support and services.

Finding your ideal supplier

What you really need is a reseller who understands your businesses, aims and needs. So when
you shop around, look for the most fitting total solution rather than just the best price. Were
talking about value-added services such as Software Assurance and Software Asset
Management.
Like most businesses, resellers often specialise in certain markets and industries, so it could be
worth looking at some case studies to pinpoint someone with experience in your particular
sector.
For more information and a list of resellers we work with, please use our Pinpoint tool to locate a
reseller near you.

Need more help?

The Microsoft Licensing website contains comprehensive licensing information, from how to
choose your licence agreement to managing and maintaining your software assets. Visit
http://www.microsoft.com/licensing/

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Microsoft provides this material solely for informational purposes. Customers should refer to their agreements for a full
understanding of their rights and obligations under Microsofts Volume Licensing Programmes. Microsoft Software is
licensed, not sold. The value and benefit gained through use of Microsoft software and services may vary by customer.
Customers with questions about differences between this material and the agreements should contact their reseller or
Microsoft account manager. Microsoft does not set final prices or payment terms for licences acquired through resellers.
Final prices and payments terms are determined by agreement between the customer and its reseller. Eligibility for Software
Assurance benefits varies by offering and region and is subject to change. The Terms and Conditions of your Volume
License Agreement and the Terms and Conditions under which any specific Software Assurance benefits are offered will
take precedence in any case of conflict with the information provided here. For eligibility and current Programme rules, see
the Microsoft Product List.
2012 Microsoft Corporation. All rights reserved. Microsoft, the Microsoft logo, Lync, SharePoint, SQL Server, Visio,
Windows, Windows Azure, Windows Live and Windows Server are either registered trademarks or trademarks of Microsoft
Corporation in the United States and/or other countries. The names of actual companies or products mentioned herein may
be the trademark of their respective owners.

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