Category: Microsoft Volume Licensing

Office and VL vs. Retail

The term full packaged product (FPP) refers to boxed, licensed software sold through distributors to resellers. Customers generally acquire FPPs through local retail stores and software retailers. Typically, each FPP includes one license, along with media and documentation, and is designed to meet low-volume needs.

Question:  My customer has found that Office Professional @ retail pricing is cheaper than Office Professional Plus in Volume License – why is this the case if Volume License is supposed to be cheaper?


A: First let’s look at the program application difference between Office 2010 Pro, Office 2010 Pro Plus and Office 2010 Std:

  Professional (Retail/ FPP)

ERP FPP $499.00

Professional Plus

ERP Open $508.00


ERP Open $373.00









































See the difference between how many programs you receive with the Professional Plus over the retail Professional. If they are not interested in the added benefits of the Extra Professional Plus programs then you should be looking at the Volume License Standard as this would be more cost effective then the FPP Retail.

Next look at all the added benefits that Volume License gives you over retail:

  Retail (FPP) Volume License
Good for: Home or business with less than 5 computers 5 or more computers or needs 5 up front  and more over 2 years
Media compliance Must show physical media, physical box and physical license key for each license install No physical compliance, all online automatically for administrator
Media procurement Hard media from box only, if this is lost or destroyed there is no replacement Online downloads are always available as long as the media is in Microsoft Life cycle
Product Key Must have individual product key and activation for each install 1 product key number can be used for the deployment of many licenses
Downgrade Rights None Included
Re-Image Rights None Included
Application Mobility license Varies with app Included in all desktop applications
Different levels of savings None Yes, varies on programs
Software Asset management Physical and manual Online and included


Volume license benefits are subject to volume license program terms and conditions. Please see the volume license chart for more information.


Microsoft Licensing Overview


Learning Objections

Provide the general Overview of:

  • Basic Licensing Concepts
  • Program Licensing
  • Product Licensing
  • Partner Tools and Resources

What is software?

Software is intellectual property, or IP, and buying a software license provides the legal right to install, use, access, display, run or otherwise interact with the software program.

Common ways to buy a license

There are four main ways in which customers commonly purchase software licenses.

  • Full Package Product, known as FPP at any retail store or reseller. Products such as Windows 7 or Office 2010 can be bought via FPP, and typically entitle the purchaser to one license and usually one install for that product, although exceptions do exist.
  • Often customers purchase license for software pre-installed on new PC’s by the Original Equipment Manufacturer, or OEM. This can be economical but there are some considerations. The Software lives and dies on the original hardware on which it was pre-installed, and it may not be transferred off the original hardware or reassigned to new hardware. Client products available through OEM can only be sold pre-installed on new hardware.
  • A third way for a customer to purchase multiple software licenses is through Microsoft Volume Licensing. Volume Licensing starts with as few as 5 licenses, making it easier and more affordable when your customer needs to run software on multiple computers within an organization. It also offers flexibility as your business shrinks or grows. This type of license is purchased through resellers, such as Value Added Resellers, or VARs, and Large Account Resellers, referred to as LARs.
  • Finally, Microsoft Online Services are subscription-based offerings that provide customers the benefits of the latest technology at reduced costs. The software resides outside of the customer’s IT environment, typically at Microsoft Data Centers. These licenses may be purchased from Microsoft or through partners.

Now that we understand how customers commonly purchase software licenses, let’s look at some important distinctions and focus on Volume Licensing.

Licensing Lifespan

Software licenses can be purchased on a perpetual or non-perpetual option. Non-perpetual is known as subscription-based.

Perpetual licenses are everlasting and valid provided the software is being used in accordance with the license agreement. FPP and OEM licenses are only offered on a perpetual basis.

Non-Perpetual, or subscription licenses are temporary, and provide the right to use the particular licensed product while the license agreement term is active. They are available only through specific Microsoft Volume Licensing programs.

Both perpetual and subscription licenses are available through Volume Licensing.

Volume Licensing

Volume Licensing offers a number of benefits:

  • To Begin with, volume discounts give customers attractive pricing with predictable cost options.
  • Second, Volume Licensing offers customers flexible options based on considerations such as payment structure, ownership of software, size and type of business, or a requirement for standardization.
  • Third, there are additional product use rights, providing greater deployment options including downgrade rights, reimaging rights, cross-language use rights and additional productivity use rights.
  • Forth, with Volume Licensing programs customers have the opportunity to buy Software Assurance, or SA.
    • SA provides a host of benefits including new version rights and a number of tools and services.

Licensing Programs

In this section we look at Volume Licensing Options and information to help your customer make the right licensing choice.

Volume Licensing Options

You can narrow down the licensing options suitable for your customer by asking a few simple questions, beginning with whether your customer prefers to own or rent licenses. Options for purchasing Volume Licensing are divided into perpetual and subscription based programs.

The second question is how many licenses are how many licenses are required, less than 250 or more than 250.

Customers needing as few as 5 licenses can choose Open License, which offers volume discounts, the option to acquire additional software products, and the flexibility to pay as you go. Or, Open Value Licensing, which Offers simple license management and better cost control with SA built in. The Open Value Company Wide program is offered for customers who want to standardize the licensing of the software on all their PC’s.

Customers with more than 250 PC’s can choose from options including Select, which offers established price levels for applications, systems and servers on a pay as you go basis.

Or Select Plus, which offers more flexibility, better asset management, and a way to balance growing technology needs with predictable costs.

Or the customer can enter into an Enterprise Agreement, which offers substantial cost savings over standard licensing price, simplified license and budget tracking and standardization across the enterprise.

Alternatively, Volume Licensing can be purchased on a subscription basis.

Open Value Subscription offers all the benefits of Open Value plus the lowest up-front costs with the flexibility to reduce total licensing costs when the total desktop PC count declines.

And Enterprise Agreements are also available on a subscription basis, enabling customers to grow or reduce the number of Desktops they have on an annual basis, providing great flexibility.

The Open programs family may be sold by any reseller. Select, Select Plus and Enterprise Agreements may only be sold by a LAR.

Many of these programs include Software Assurance. Open, Select and Select Plus programs do not include Software Assurance, but it may be purchased at the time of Volume License purchase.

You can see that different licensing programs are designed for differing needs of organizations.

Does your customer already have a licensing program?

When implementing a new solution, it is important to understand whether your customer has an existing licensing relationship. If the person you have the relationship with doesn’t know this, it may be necessary to ask the IT Manager or Purchasing Manager. If the customer has an Enterprise Agreement in place they are working with a LAR. If they do not know who that LAR is, they should ask their account manager.

Once you have established the status of the customer’s licensing environment, you can guide them in choosing the right program.

Programs for Customers with less than 250 PCs

There are three programs designed to benefit customers with less than 250 PCs in their organization.

Open License

Open License Provides perpetual licenses. You may purchase an Open License as a license only, a license with Software Assurance, or renew SA with an additional two year term. Payment is required when customer places an order.

Open Value

Open Value Licensing Program provides for perpetual licenses on a companywide or non-companywide basis.

Customers wishing to standardize all their PC’s in the organization can choose company-wide licensing, while customers whose licensing requirements can vary can choose non company-wide.

Software Assurance is included with Open Value licensing, and discounts are available for licensed purchases through this program.

Open Value Subscription

Open Value Subscription is a subscription based program which allows the customer to increase or decrease their license count on an annual basis to accommodate changes in desktop PC count. SA is included in this program and the annual payment plan along with the Up-To-Date credit for existing assets significantly lowers the up-front costs.


Benefits of Software Assurance

You can see that the inclusion of SA is a major decision point for determining which program to purchase. Let’s look at some of the Benefits of SA. Software Assurance provides a broad range of benefits, providing technology, services and support to manage the software lifecycle. There are about 20 benefits and we are only highlighting a few here.

Please note that Software Assurance benefits vary according to Microsoft Volume License (Ie. Windows 7, Office 2010 license). They also vary according to Microsoft Volume Licensing Program (Ie. Open Volume, Open Value, Select Plus).

With the New Version Rights benefit, your Volume License customers receive rights to new software versions for every license covered by Software Assurance. This benefit can help customers reduce software acquisition costs and simplify procurement and forecasting, while providing access to the latest upgrades.

Available only through SA, Windows 7 Enterprise offers additional valuable features for your customers, helping them address challenges such as protecting sensitive data, improving application compatibility, and simplifying IT management and deployment.

Additionally, SA includes the Home Use Program, which offers employees the latest version of Microsoft Office Suite for their home computer via a low cost download.

With SA, Customers can plan and prepare for efficient and successful deployment by leveraging comprehensive services delivered through prequalified deployment partners. Deployment Planning Services are available for customers deploying Windows 7, Microsoft Office SharePoint or Microsoft Exchange Server.

Finally, your Volume Licensing customers can access phone support for any Microsoft software, 24 hours a day, 7 days a week provided by Microsoft. The number of phone incidents granted is based on a customer’s Software Assurance expenditure.

Also, some product purchases qualify customers for free Microsoft E-Learning.

With the variety of options available, it is important to be able to guide a customer through choosing the appropriate licensing agreement.

Choosing the Right Program for your Customer

This flowchart can help you determine which licensing program is best for your customer.




















Let’s walk through it.

Begin by determining how many licenses the customer requires. If it’s not between 5 and 250, consider these options – customers requiring less than 5 licenses should make a retail or OEM purchase. Customers requiring 250 or more licenses should consider one of the programs designed for that purpose.

If the customer does require between 5 and 250 licenses, determine the flexibility desired. Does the customer want to stay current with the latest Microsoft software and spread the cost of license payments? If not, recommend the Open License Program, which can provide savings on retail prices and includes the flexibility to purchase licenses as needed.

If the customer does want to stay current and spread costs, determine the level of standardization required: Does the customer want to standardize on Windows, Office or Microsoft Server Products? If not, recommend Open Value Non-Company wide, which includes SA benefits such as rights to new versions of licensed software and the flexibility to spread payments over three years.

If the Customer does want to standardize, determine if they want to subscribe to Microsoft Software instead of having perpetual licenses. If not, recommend Open Value Company Wide, which provides additional savings to customers that license at least one platform software component.

If the customer does require the lowest up-front costs, or wants to subscribe to the Microsoft software, recommend Open value Subscription; an organization-wide program that delivers flexibility and the lowest up-front costs.

Microsoft Online Services

Microsoft Online services are the Microsoft products delivered as subscriptions services hosted by Microsoft and sold by Microsoft or partners.

With high availability, comprehensive security and simplified IT management, these hosted services deliver the flexibility and cost effectiveness that many businesses need today.

MOSP – Microsoft Online Subscription Program is the primary offering for small to medium sized organizations. The program is ideal for organizations with 5 or more users, enabling them to easily subscribe to use these online offerings with Microsoft Products they have already licensed,, rapidly deploy, and manage their licenses online. The commitment for these online programs is 1 year.



Product Licensing

There are nine licensing models within the Volume License framework. These are


  1. Operating Systems
  2. Desktop Applications


  1. Developer Tools


  1. Online Services


  1. Server Operating Systems
  2. Server/ CAL
  3. Processor licensing
  4. Management Servers
  5. Specialty Servers


Desktop Operating Systems (Win XP, Visa, Win 7 ect)

Before purchasing Microsoft Windows desktop License, customers need to understand some key facts.

Desktop Operating Systems are licensed per device. Therefore each PC must have its own full Windows desktop license. Under Volume Licensing, the desktop operating systems are upgrade licenses only. A fully qualified base license must be pre-installed (OEM) before you can put an upgrade on top. A desktop upgrade license obtained through a Volume License program lives and dies on the PC to which it was first assigned. It can-not be transferred to another PC. Once the license is assigned you may run a single instance of the desktop operating system on the licensed device.


Customers licensing their PC Desktop Operating Systems can take the opportunity to purchase SA, with some provisions.

If the desktop Operating System is purchased as FPP or OEM, SA must be purchased within 90 days of licensed purchase. If the purchase is through a Volume Licensing Program, SA must be purchased the same time you buy the license.

Purchasing SA on the desktop provides the right to install and run Windows 7 Enterprise in place of Windows 7 Professional, offering additional valuable features to help your customers protect sensitive data, improve application compatibility, and simplify IT management and deployment.

Desktop Applications

The next step is to license desktop applications. Microsoft Office 2010 suites available through Volume Licensing includes Office Standard 2010 and Office Professional Plus 2010. These desktop applications are licensed per device in Volume Licensing.

In Volume Licensing you may install more than one copy of Office on the licensed PC. Additionally, you may install any number of copies of any prior version of Office, or any prior component of Office on the licensed device.

Now that your customer’s desktop applications are appropriately licensed, lets look at how accessing Office through Remote Desktop Services impacts the licensing scenario.

Accessing Office though Remote Desktop Services

Customers may wish to allow end users to access Microsoft Office from a server, using Remote Desktop Services (Formally known as Terminal Server).

In this scenario, each device accessing the software installed on a network device must be licensed for that software. If the device can or will access Microsoft Office, it must have a Microsoft Office License. Additionally, each device remotely accessing the software must be licensed for the same or higher version of the software on the server. For Example – a device being used to access Microsoft Office Professional Plus 2007 can have a license for either Microsoft Office Professional Plus 2010 or Microsoft Office Professional Plus 2007, but not Microsoft Office Standard 2010.

Server Operating Systems

Server Operating Systems, including Small Business Server and Windows Server 2008 R2, require a license for every running instance on the server. Customers need to acquire a license for each instance of the server software they run on a Server. That instance may run on a physical machine or a virtual machine.

Each user or device accessing the services of the server, directly or indirectly, requires a Client Access License, or CAL.

Windows Small Business Server is designed for an organization with 5 to 75 users. It is an affordable, integrated solution that delivers a comprehensive network that includes file sharing, e-mail services, business applications and more. Each Small business Server instance requires a server license, and users and devices connecting to the Small Business Server each require a CAL.

Windows Server 2008 R2 is a full server product that can support networks with thousands of users and devices, along with many different business applications, such as e-mail and database services. These programs are however not integrated into the Windows Server 2008 R2 as they are with the SBS. Though as with the SBS each instance of the Windows Server 2008 R2 requires a server license to be assigned, and users and devices connecting directly and indirectly to the server each require a CAL.

Windows Web Server 2008 R2 is a Web application and services platform. Designed exclusively as an Internet-facing server, it helps reduce infrastructure costs. Organizations can use Windows Web Server to provide external access to internal web servers. In this case a server license is required but CALs are not. This server will be based on the Per Processor Model in which we will learn in a bit.


Client Access Licenses (CALS)

A customer will need to determine whether to purchase CALs on a per device or per user basis. Since the cost of each is the same, which the customer chooses depends on their specific deployment scenario.

In this scenario, there are two servers and 10 devices. There are four users accessing the services of the servers from a variety of devices, including desktops, laptops and mobile devices. If the customer purchases device CALs, they will need to purchase 10 cals, one for each physical device. Each physical device will then be permitted to connect to any internal Windows Server in the organization.

Alternatively, if the customer chooses per user CALs, they will need to purchase only 4 CALs – one for each user, regardless of how many devices the user connects from. So in this instance, the per user licensing model is more cost effective for the customer.

It is important to note, that if the customer has previously licensed the CALs in a device or user mode – they must retain that consistency and cannot change it unless they have software assurance attached to the CALs.

Please remember to ask the customer which CAL model they require; as though they cost the same the SKUs are different.


A software developer is a special case; to ensure that the software being developed runs on all the desired platforms, the developer must test the product on each platform.

The developer license model is licensed on a per-user basis. One person can use developer tools such as Microsoft Visual Studio 2010 to design, develop, test or demonstrate his or her programs on any number of devices. Each individual who uses the software this way needs a license. Developer licenses are for design, development, test, and demonstration purposes only and cannot be used in live production or staging.


Microsoft Online Services

In addition to on-premise products, offered through Microsoft Volume Licensing, you can also offer customers a subscription licensing program for services provided online. MOSP (Microsoft Online Subscription Program) enables you to do this. The primary services offered online are:

Microsoft Exchange Online, which provides business critical messaging services including e-mail, voice mail, calendaring and contact storage.

Microsoft SharePoint Online, which provides rich, easy to use collaboration tools including document libraries, wikis and blogs, shared workspaces, process workflows, and internet portals.

Microsoft Office Live Meeting, which helps your customers effectively collaborate with colleagues, customer and suppliers – from almost any location.

Microsoft Office Communications Online, Which provides instant messaging and presence awareness in a secure environment and increases productivity by facilitating rapid connections between people.

These services can be subscribed to individually, or customers can benefit from significant cost reductions by subscribing to a suite of online services.


Windows Azure Platform online service

In addition to hosted business applications, Microsoft Online Services also provides for development, service hosting and service management environment: the Windows Azure Platform.

Windows Azure is a set of cloud computing services that serves as the development, service hosting and service management environment for the Windows Azure Platform. The Windows Azure Platform is a set of cloud computing services that can be used together or independently to enable your customers to:

  • Use existing skills and familiar tools to develop cloud applications.
  • Scale quickly to respond to changes in customer requirements
  • Rapidly reach markets and pay on a consumption basis

Windows Azure is currently licensed under the MOSP. There are two Categories of licensing offered:

Consumption –Based offering which provides Windows Azure platform capacity on a Pay-as-you-go basis, and the commitment-based offering which provides a base level of Windows Azure platform capacity on a pay-monthly basis.


Licensing Tools and Resources


Microsoft Online customer portal

is an online tool that enables your customers to manage the online service subscriptions that they purchase through MOSP.

Microsoft Volume License Service Center

is the single location for customers to view licensing information, download Microsoft software and manage Volume Licensing benefits and subscriptions.


Some useful resources available for volume licensing customers:

Microsoft Product list, which shows which products are available through Volume Licensing Programs, updated Monthly.

Product Use Rights, or PUR – Provides information about the use rights for products currently offered under Microsoft Volume Licensing Programs, updated quarterly.

Service Provider Use Rights, or SPUR – provides information about the use rights for products currently offered under the Service Provider License agreement.


What we covered

  • Basic Licensing Concepts
  • Program Licensing
  • Product Licensing
  • Partner Tools and Resources









SPLA – Service Provider License Agreements – is designed for third parties who provide hosted services for Microsoft software, such as internet service providers who host customers’ websites. We do not have SPLA. However, we may sell Microsoft products to SPLAR (Service Provider License Agreement Reseller) – It is important to note that when a SPLAR calls for software they are the licensee, not their end user to whom the services are provided. Remember, these resellers are the only Microsoft offerings that give the reseller the rights to license Microsoft software for third party hosting.

ISV – Independent Software Vendor – offers a way to provide end users with a unified solution by allowing ISV’s to integrate Microsoft licensed software into other applications then distribute the unified solution to end users. You will hear this as part of the Dynamic Product line. Zone’s can only sell Dynamic CRM (Customer Resource Manager), customers must seek out an ISV for any other Dynamic Solution. We are not an ISV.