How Microsoft Licensing Works

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Microsoft logoWhen it comes to software licensing, Microsoft offers businesses various options to choose from. These include OEM (Original Equipment Manufacturer), Retail or FPP (Full Packaged Product), Open or Volume Licensing, SPLA (Services Provider License Agreement) and Microsoft Office 365. Knowing the key differences between these products will help you decide which one is the best fit for your organisation.

1. OEM (Original Equipment Manufacturer) – When you buy a new computer, it usually comes with a preinstalled Operating System and, occasionally, with a preinstalled Microsoft Office suite. This software, as well as any other pre-installed Microsoft software, is classified as OEM licensing. This type of licensing is very convenient, as you don’t need to worry about purchasing or installing any additional software and it generally works out cheaper than other forms of Microsoft licensing. There are, however, no transfer rights and usually no media/license keys supplied. This means that the software cannot be uninstalled and transferred to another computer (for example, when you decide to upgrade) and this can also cause problems should you need to reinstall the software on your computer later in time. Also, if you have a Microsoft Terminal Server, Remote Desktop Server or Citrix environment, these licenses cannot be used or counted towards your overall license count. 

2. Retail or FPP (Full Packaged Product) – Retail or FPP software can be purchased from a local retail store or online retailer and it usually includes a CD and license key. It is designed for consumers or small businesses with low-volume needs. Unlike OEM, you can uninstall and transfer Retail/FPP software to other computers should the need arise. Whilst this form of licensing is easy and quick to obtain, having to manage the different CDs and license keys for every computer in your business can be time consuming and inefficient. Also, you cannot use Retail/FPP software in a Terminal Server, Remote Desktop Server or Citrix environment. 

3. Open or Volume Licensing – If you have more than five users, or if you have a Terminal Server, Remote Desktop Server or Citrix environment, this is the ideal option for you. Microsoft Open/Volume licensing is delivered via a customer portal that you can easily log into to manage your licenses. You are also allocated one license key that you use on all computers, which means you don’t have to keep track of multiple keys for different computers. Microsoft also offer bulk purchasing pricing breaks, so the more licenses you purchase, the less you pay per license.

4. SPLA or Services Provider License Agreement – SPLA licensing is basically Microsoft’s monthly subscription offering for hosted environments. Therefore, if you have a hosted server environment, SPLA is the best option for you. With no upfront cost, you pay monthly for only the licenses you need and you also have ongoing access to the latest versions and software. SPLA licensing is also compatible with Terminal Server, Remote Desktop and Citrix environments.

5. Microsoft Office 365 – Microsoft Office 365 is Microsoft’s total cloud offering. All server components are hosted in Microsoft’s Singapore Data Centre, meaning your business needs fewer application servers (no need for Microsoft Exchange, SharePoint or Lync Servers). With Office 365, there are a range of purchasing choices – from individual components to full suite options.  It can be purchased either on a month-to-month basis or an annual subscription and you can mix and match plans depending on the individual user requirements. It should be noted that Microsoft Office 2013 which comes with some Office 365 plans cannot be installed in a Terminal Server environment similar to OEM and Retail/FPP licensing. However, there have been rumours of this changing with future Office 365 updates.

Purchasing software licenses is undoubtedly a business expense you can’t avoid and with Microsoft conducing regular licensing audits, it’s something that needs to be done right. If you are interested to know how Centrix can help you find the right Microsoft licensing option or any other managed IT services or IT outsourcing services in Sydney, CONTACT US for a free expert IT consultation.