Paying attention and choosing the right type of Microsoft license is essential for a company to avoid disruptions and have stability in its operations. If it is not licensed, the software may become unstable and cause performance issues, such as stopping its operation.
On the other hand, licensed software provides security to the organization, since it is subject to security certifications, audits and efficiency tests. Licensing is also essential for companies to avoid the risk of fines and the fear of inspection, as well as ensuring lower maintenance costs.
Especially for organizations that use products offered by Microsoft, such as the Windows system, it is necessary to identify the best licensing model to be contracted.
What are Microsoft’s main licenses?
Microsoft licenses can be divided into several groups, such as: Basic, Standard and Premium. In addition, it is important to analyze which license and which tool you intend to have in your business, which could be for Microsoft 365, Teams, Windows 11 or other platforms.
Microsoft licenses and their differences
To better guide the choice of a Microsoft license, it is necessary to initially analyze whether there is a search for cloud solutions.
Options for perpetual licenses, with the right to benefit for the rest of your life, or subscription licenses , in which subscription is done as a rental, should also be considered. A third factor to be observed is the possibility of transacting the number of licenses during the contract period.
To serve customers with different profiles, Microsoft offers different software acquisition options. Each license model is adapted to an organizational structure, which provides a wide range of options.
1. CSP (Cloud Solution Provider)
As one of Microsoft’s most modern licensing models, CSP was developed to meet the growth of cloud solutions. In this model, the customer purchases cloud licenses with the possibility of monthly payments and fluctuating number of licenses each month.
Depending on the need, whoever purchases CSP may increase or reduce the number of licenses offered during the contract period.
In CSP, the software distributor assumes responsibility for the life cycle of the customer’s Online Services, ranging from provisioning to direct billing, support and management. In addition, it has the ability to integrate its own services, increasing the resources offered.
One advantage of this type of licensing is that it generates a predictable cost, so you can include it in your fixed expenses and have greater control over payment, which can even be made by bank slip.
Another benefit is the commitment-free subscription. Since there is no penalty, you can have a single contract for all Microsoft Cloud solutions that you purchase.
2. OEM (Original Equipment Manufacturer)
Newly purchased computers with pre-installed software, such as Windows, are OEM licensed. In this case, the software is an integral part of the machine.
The software license for the OEM model is only valid on the machine that was used to install it. This implies that if the license holder switches computers, they will have to buy a new license because it cannot be transferred to another computer.
Generally, OEM-licensed software is not intended for direct sale to end consumers. It is made, or adapted, preferably for automakers.
Basically, OEM is a term used when a developer makes a subsystem, component or part of a product or program for another organization.
Laptop and computer manufacturers such as Dell, Sony, Philips and many others use OEM licensed software in their products. These licenses, sold directly from manufacturers, allow the software to be pre-installed on computers without the consumer having to purchase a separate license.
The prices of these programs tend to be different due to the large volume of purchases that automakers make for their products.
3. FPP (Full Packaged Product)
Also known as “box licensing,” FPP is a software sales method that involves purchasing products in complete packages, usually in physical boxes, that include all necessary components, such as CDs, DVDs, manuals, and license keys. Currently, this model is no longer widely adopted, as Microsoft offers downloadable solutions.
In FPP, the installation of this software is only allowed on one machine. Therefore, FPP is more suitable for small companies, which use up to four computers.
From five machines onwards, organizations find more advantages in using volume licensing, as it allows installation on a larger number of computers at more affordable prices.
Furthermore, this type of licensing does not allow the use of previous versions of the purchased program.
FPP is typically the most expensive of all Microsoft licensing types. However, it can be purchased in any quantity, with no minimum licensing or purchase restrictions.
4. ESD (Electronic Software Delivery)
In an alternative that offers more practicality to the home user, Microsoft offers ESD as a model to replace FPP and avoid the need to purchase the box. To this end, this licensing, with features similar to the Full Packaged Product, is offered via download.
This type of licensing brings some advantages, such as agility, ease and flexibility in acquiring the product with its license, which can be done at any time and place, as long as you have access to the web. There is also the convenience of not having to store the physical media, which can get scratched, broken, lost, etc.
It is worth noting that the lack of physical media reduces costs with logistics, inventory and the media production material itself. This helps to reduce the price of the software and also helps the environment.
5. GGK (Get Genuine Kit)
This type of physical license consists of the installation media, documentation and an authenticity label. It is intended for installation on computers that have already been notified of some irregularity in relation to piracy and need to be adapted.
Volume licensing
Volume licensing is recommended for small and medium-sized businesses that require more than five licenses or more than one type of software. This format offers cost advantages.
The organization only pays for the software license, whereas in the FPP licensing model, media, a user guide, and other items that come in the packages are included.
Authorized distributors provide more customized purchasing options, as well as optimized software management.
In some Volume Licensing programs, you can purchase Software Assurance, a comprehensive maintenance option that can help you maximize your software investment.
It integrates the program with partner services, IT tools, telephone support, among other benefits.
You can opt for Software Assurance at the time of purchase, which allows you to enjoy its benefits immediately and for the duration of the licensing contract.
Depending on the software and volume licensing chosen, there is the possibility of receiving media, such as complementary media, as well as product support and documentation separately.
Licensing for small and medium-sized businesses
For small and medium-sized businesses, Microsoft offers three programs: Open License, Open Value and Open Value Subscription. When deciding which one to use, the vendor itself recommends that the following criteria be evaluated: the size and type of the organization, the products that will be licensed and how these products will be used.
Among these programs, there are alternatives that include the purchase or rental of licenses, in addition to the possibility of contracting a support plan called Software Assurance.
Open License
Considered an entry-level program, Open License is recommended by Microsoft for small organizations that pay as they go.
The acquisition of perpetual right to use the software at a significant discount is made through a one-time payment.
It is worth noting that purchasing perpetual use gives you the right to benefit from the software for the rest of your life. However, there is the disadvantage of not offering updates and maintenance support.
If you want to ensure maintenance and support, you can use Software Assurance, which provides the right to all software updates during the term of the Open License agreement. This option also provides telephone support, partner services, training and IT tools.
Open Value
In the Open Value program, Software Assurance is already included, with technical support and training. You can make updates at any time, without the need for new contracts.
The Open Value license is ideal for companies that want to customize their platform and standardize their IT infrastructure. It is also recommended for those that want to maximize their investments with Software Assurance.
One advantage is that you can update your program at any time after updates are made available. All this without having to monitor versions, buy software or enter into new contracts.
Open Value Subscription
Microsoft recommends the Open Value Subscription for those looking for the possibility of increasing or reducing the number of licenses annually, which can be important to keep up with the company’s demand.
If the number of employees changes, the organization may adjust the number of licenses on the contract anniversary date. In this model, the standardization of the technology park of the company that will use it is required.
Unlike the Open License and Open Value models, licenses are not perpetual in the Open Value Subscription program. In this version, the software is not purchased, but rather the license is subscribed to or rented.
Licensing for large corporations
To meet the demands of companies with 250 or more employees, Microsoft offers licenses designed for large corporations. Since July 2016, one of these programs, called Select Plus, has been discontinued.
As of that date, Microsoft stopped accepting orders and renewing software insurance contracts under this program.
1. MPSA
As a replacement for Select Plus, Microsoft recommends the Microsoft Product and Services Agreement (MPSA). Also offered for 180 or more computers, this program includes online services, which influence the price paid by the customer.
To join the MPSA, there is no need for an initial purchase commitment. This payment can be made upfront, annually or in short installments. This is a transactional model, with an annual purchase commitment based on points.
MPSA is presented by Microsoft as “the easiest way to acquire all cloud services and software” . Through it, the company can choose to deploy in the cloud or create a hybrid environment.
Acquisition can be done by different organizational structures, with divisions within the company or by departments.
2. Enterprise Agreement
An alternative for companies with more than 500 users or desktops, the Enterprise Agreement is intended for organizations that wish to standardize the computers in their corporate environment with one or more specific Microsoft products, paying a special price for this acquisition.
This is a manageable volume licensing program that allows you the flexibility to purchase cloud services and software licenses under a single agreement.
It is important to mention that the Enterprise Agreement allows your company to subscribe to software licenses instead of purchasing them.
It is worth noting that the Microsoft Azure Enterprise Agreement also gives consumers access to the Enterprise Portal, a beneficial feature for those who manage multiple subscriptions or accounts.
3. Government Open License Program
Microsoft offers volume licensing programs for small, medium and large government agencies at special pricing. There are Open License, Open Value and Open Value Subscription options as well as Enterprise Agreement and MPSA options.
4. Academic Licensing – Education Enterprise Subscription
Among the licensing options offered, Microsoft offers some for educational institutions. The alternatives include two types of programs: subscription and perpetual.
In subscription licensing, the academic institution has the right to use the licensed products during the license period, as well as updates.
In the perpetual program, software licenses are acquired so that there are rights to the software even after the end of the licensing period.
5. Licensing for healthcare organizations
Among the volume licensing options, Microsoft also includes healthcare organizations, which are divided between private, government and academic institutions (health systems and laboratories exclusively owned and operated by users that meet the requirements established by Microsoft itself).
6. Programs for NGOs
Through volume licensing, Non-Governmental Organizations can purchase multiple software licenses at reduced prices, rather than purchasing many software packages.
In this case, the organization only acquires a complete software package and enough licenses to cover all the other machines it has. To do this, the institution must be registered with this feature and comply with Microsoft standards.