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Microsoft Licensing FAQ

By Joshua Erdman
Digital Foundation, inc.

What is an EULA?

EULA stands for End User License Agreement. Every time you install software you are asked to accept the EULA. The EULA is full of restrictions on how, where, and on what machines you can use the software. It may also give the software vendor permission to inspect the use of their software on your network and also allows them to pursue any legal action against anyone who breaks the EULA, but I am no lawyer. I have yet to read an EULA from beginning to end. I have heard stories of some spyware software companies where their EULA gives them permission to install whatever they want on your computer.

The unfortunate thing is that you get a different EULA for each piece of software you install from every company. It is unreasonable to believe that you could provide the time (or experience) to read each one and then understand what they actually say. So to be on the safe side, use your software legitimately and only from legit software companies.

What is Software Assurance?

Software Assurance is a Microsoft 'Subscription' that allows you to get free upgrades to the next software version without having to buy another license. As of July 2002, Microsoft has stopped selling upgrade versions of software in their volume licensing plans. If you purchased bulk copies of Office 2003 and then Office 2007 became available, without Software Assurance you must buy another license to be able to use the new version, upgrades do not exist anymore.
Read more about Software Assurance from Microsoft at http://www.microsoft.com/licensing/programs/sa/.

Who is my Software Advisor?

Software Advisors are people or businesses that are Microsoft Partners participating in the Open Value Licensing Plan. They are trained in Microsoft Licensing Basics and are also professionals with maintaining the software they sell. A software advisor does not necessarily work for Microsoft, and they are probably your best tool to help with licensing.

Digital Foundation is a Microsoft Software Advisor. If you are interested in purchasing Open Value Licenses or need consultation for Microsoft Licensing, please visit:
http://www.digital-foundation.net to contact us.

Why are Open Value Licenses more expensive?

Open Value licenses require Software Assurance, which is a special 'subscription' plan that includes free upgrade versions and is packaged with other benefits such as training vocuhers, support programs, and even special employee take-home licenses. The initial investment for an licenses with Software Assurance (SA) is more expensive because it include the license AND the 'subscription' of 3 years. Open Value also provides the option to pay annually over 3 years and the lower cost of renewing your Software Assurance. After the end of your 2 year Open Business Agreement or 3-year Open Value agreement, you only have to pay renewal fees which is typically 60% of the original cost.

Can the software I use at work be installed on my computer at home?

This depends on the License and the Licensing Plan that your business has with Microsoft. Open Value includes a benefit for 'Home Use' rights where employees can obtain a special 'Home Copy' of the software they use at the office. This is only for software purchased within the Company Wide Option. Read more about Open Value Licensing in the Open License Article.

What is a CAL?

A CAL is a Client Access License. This type of license grants one network user or device permission to access a network service (such as a SQL or Exchange Server). There are also different types of CALs for each service.

What is the difference between per seat, per server, and per processor?

The Per seat licensing model refers to the total number of computers allowed to connect to the service on that machine. Each connection is called a Client Access License. In per seat mode a single CAL for each workstation can be used to access multiple servers in per Seat mode. This is usually the most economical option

In Per Server licensing, each CAL is dedicated to that specific server (think of this as concurrent connections).

In per Processor mode, no CALs are needed to connect to the server. The right to access the server is covered by the (more expensive) Software License itself.

Refer to http://www.microsoft.com/licensing for more information.

What is the difference between a Device CAL and a User CAL?

A Device CAL is specific to a workstation whereas a User CAL is specific to a user. For example, if you have one user connecting to a SQL server from 2 different machines, you would need 2 SQL Server Device CALs or 1 SQL Server User CAL.

What is the difference between an OEM License and a Retail License?

An OEM license allows you to use the software that came with your computer but the software can never be transferred to any other machine. Retail Licenses can be transferred provided that the software is only installed on one machine at a time. OEM licenses are typically cheaper than Retail licenses.

What is the Company Wide Option?

In the Open Value program, licenses for Microsoft Office and Windows can be purchased on an incremental basis or all at once using the Company Wide option. Company Wide gives you great discount (up to 23%!) but you are making the commitment to pay for one license for every Windows based workstation you have.  Company Wide also qualifies you for Employee Home Use Rights and Employee Software License Purchasing Discounts.

Do I need to purchase an additional license for a backup server?

Microsoft calls this a 'cold server' license. It means that you might have built a spare server that you keep turned off and only to be used in the event of disaster recovery. This 'cold server' license is provided to you for free provided that you maintain your software assurance.

I am a software reseller, what are the rules for reselling volume licenses and OEM licenses?

Microsoft has a quick reference guide available for you: http://www.microsoft.com/piracy/partners/YourPC_do.mspx.

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Article last reviewed: 06/10/2008


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Related Articles:
MS Licensing Guide
Bulk Licensing