Microsoft Licensing Terminology:
- Perpetual License: One-time purchase, owned indefinitely.
- Subscription License: Recurring payment provides access for a set term.
- Client Access License (CAL): Required for users or devices accessing Microsoft servers.
- Software Assurance (SA): Offers support, upgrades, and training benefits.
- True-Up: The annual process is to adjust license counts based on actual usage.
- License Mobility: Ability to move licenses to cloud environments.
Microsoft licensing can be complex, particularly due to the specialized terminology used throughout the licensing ecosystem. Whether you are a business owner, IT professional, or just someone curious about Microsoft products, knowing these terms is crucial to making informed decisions.
This guide will explain the most important Microsoft Licensing Terminology in an easy-to-understand format using bold highlights, bullet lists, and real-life examples.
Microsoft Licensing Terminology Explained
Volume Licensing
Volume Licensing refers to the ability to purchase software licenses in bulk, which is typically suitable for medium-sized to large organizations. Microsoft offers discounts for buying more licenses, making this option cost-effective.
Example: A company with 200 employees opts for Volume Licensing to install Microsoft Office on all workstations. Instead of buying individual licenses, the company can buy licenses in bulk, thus reducing costs significantly.
Key Benefit: With Volume Licensing, organizations receive additional benefits such as Software Assurance and enhanced deployment rights.
Software Assurance (SA)
Software Assurance (SA) is an offering that provides added value to Volume Licensing customers. It includes upgrades, technical support, training, and deployment planning.
Benefits of Software Assurance include:
- License Mobility: Enables the transfer of certain licenses across physical servers or to a cloud environment.
- Upgrades: Allows users to access new software versions during their licensing term.
- Support and Services: Provides access to technical support and training services, making it easier to use the products effectively.
Per-User and Per-Device Licensing
Per-User Licensing and Per-Device Licensing define how the software is assigned within an organization.
- Per-User Licensing: This model allows a single user to access the software across multiple devices.
Example: Microsoft 365 Business uses per-user licensing, meaning one user can access Office applications on their laptop, desktop, and mobile devices. - Per-Device Licensing: This type of licensing is tied to a single device, irrespective of the number of users.
Example: Windows Server often employs per-device licensing, where each device connecting to the server needs a valid license.
Client Access License (CAL)
A Client Access License (CAL) allows a user or a device to access the services provided by a server.
Types of CALs:
- User CAL: A specific user can access the server from multiple devices.
- Device CAL: Allows multiple users to access the server from a single device.
Example: A company using Windows Server must purchase CALs for their users or devices to legally access the server resources.
Microsoft 365 vs. Office 365
Many people confuse Microsoft 365 with Office 365, but they refer to different things.
- Office 365: This cloud-based suite provides access to Microsoft Office apps like Word, Excel, and PowerPoint.
- Microsoft 365: This broader offering includes Office 365, Windows 10/11 Enterprise, and Enterprise Mobility + Security.
Example: Microsoft 365 is often chosen by businesses that need productivity apps (Office 365) and security management features for devices and users.
Subscription vs. Perpetual Licensing
Microsoft offers both Subscription Licensing and Perpetual Licensing.
- Subscription Licensing: You pay regularly (e.g., monthly or yearly) for continued access to the software.
Example: Microsoft 365 operates on a subscription basis, allowing access as long as payments are made. - Perpetual Licensing: You pay a one-time fee to own the software permanently. There are no recurring fees.
Example: Buying Microsoft Office 2019 with a one-time purchase is an example of a perpetual license.
How to Choose the Right Licensing for Your Organization
Selecting the appropriate licensing model is critical for optimizing costs and ensuring compliance.
Identify Organizational Needs:
- Size of Organization: Smaller organizations may benefit more from subscription models, while large enterprises can find value in Volume Licensing or Enterprise Agreements.
- Product Usage: If you require comprehensive management tools, Microsoft 365 is more suitable than Office 365.
Consult with a Licensing Expert: Consulting with a Microsoft CSP Partner can simplify decision-making by tailoring solutions specific to your needs.
Common Misunderstandings in Microsoft Licensing
The complexity of Microsoft licensing often leads to confusion. Below are a few common misconceptions.
- Office 365 and Microsoft 365 Are the Same
Reality: Office 365 focuses on productivity apps, while Microsoft 365 includes additional tools like security features and Windows OS licenses. - CAL Requirements for Cloud
Reality: CALs are generally required for on-premises servers like Windows Server. Licensing requirements are different for cloud-based services like Azure.
FAQ: Microsoft Licensing Terminology
What is Volume Licensing in Microsoft?
Volume Licensing is a cost-effective way for organizations to buy multiple software licenses simultaneously, making it suitable for medium to large enterprises.
What does Software Assurance include?
Software Assurance includes benefits like license mobility, software upgrades, technical support, and access to training services.
How does Per-User Licensing differ from Per-Device Licensing?
Per-User Licensing allows one user to access software on multiple devices, while Per-Device Licensing is tied to a specific device, regardless of the user.
Do I need CALs to access the Windows Server?
Yes, you need Client Access Licenses (CALs) for each user or device that accesses a Windows Server.
What’s the difference between Microsoft 365 and Office 365?
Microsoft 365 includes Office 365, Windows 10/11 Enterprise, and security management tools, while Office 365 primarily focuses on productivity apps.
Who should consider an Enterprise Agreement (EA)?
An Enterprise Agreement is ideal for organizations with 500 or more users or devices that need centralized and flexible license management.
What is a Cloud Solution Provider (CSP)?
A CSP is a Microsoft partner directly selling and supporting Microsoft cloud services like Azure and Microsoft 365.
Should I choose Subscription or Perpetual Licensing?
Subscription Licensing is best for flexible needs, while Perpetual Licensing is better for those wanting to own software with a one-time fee.
What are Azure Reserved Instances?
Azure Reserved Instances allow you to reserve cloud resources in advance for one or three years, providing significant cost savings.
Is Software Assurance necessary for Volume Licensing?
Software Assurance is optional but offers added value like upgrades, technical support, and deployment planning, which can be beneficial.
What is the True-Up process in Enterprise Agreements?
True-Up is an annual process for adjusting licenses based on changes in the number of users or devices in your organization.
Do CSPs provide technical support?
Yes, Cloud Solution Providers often provide direct support to their customers, making it easier to manage cloud services.
Can Office 365 be purchased without Microsoft 365?
Yes, Office 365 can be purchased as a standalone productivity suite without the additional features included in Microsoft 365.
What are the benefits of Volume Licensing for businesses?
Volume Licensing offers cost savings, ease of deployment, and access to Software Assurance benefits, making it ideal for larger organizations.
What is Select Plus in Microsoft Licensing?
Select Plus is a licensing program tailored for midsize and larger organizations. It allows more flexible purchasing options across departments.
