Executive Summary

Microsoft offers three major families of volume licensing programs for business organizations. These programs present a wide array of choices that can impact an organization’s IT operations, budgets, and plans.

Designed for enterprise architects, corporate business managers, and IT managers, this report helps answer the question “What’s the best way to purchase the licenses I need?” The report explores the volume licensing programs in detail, highlighting similarities and differences across the programs, as well as their benefits and pitfalls. It also helps customers to understand how licensing choices affect the size and timing of license payments, the sales channels and documentation requirements, and the effort required to ensure license compliance.

This 44 page report is part of a larger series of Directions on Microsoft Licensing Outlines and should be used in connection with the Directions on Microsoft Enterprise Software Roadmap.

Introduction

Microsoft’s volume licensing programs are a potent tool for saving money on software purchases, reducing the cost of managing software, enforcing corporate software standards, and accessing products and services unavailable any other way.

Types of Plans

To meet the requirements of many different types of businesses, Microsoft offers three major families of volume licensing plans:

• Open plans, which offer moderate discounts, can be used for small purchases, and require no long-term commitments
• Select plans, which provide greater discounts but are more complex and require high purchase volumes
• Enterprise Agreements, which license all client PCs in an organization to use common desktop software.

These plans cover everything from small organizations with two or three computers and half a dozen employees to global enterprises.

In general, these plans represent an ascending scale of volume in software purchases. As a rough guide, Open can be used by organizations of any size, starting with a single-PC office and including midmarket customers with as many as 1,000 PCs; Select is useful to organizations with 250 or more PCs and to organizations with many servers and server-based applications; and Enterprise Agreements are available for organizations with 250 PCs or more and focus primarily on licensing all computers in an organization for the latest versions of Windows and Office.

These plans differ from each other in many important respects, and choosing the right plan requires care. Choosing the wrong plan could lead to overlicensing and extra costs or could require organizations to track software manually on each computer, which could create difficulties in proving that the organization is legally licensed for all the software it is using. In many cases, a company cannot achieve optimal software licensing with a single plan. Many organizations, especially large companies, use at least two of Microsoft’s volume licensing plans simultaneously.

Benefits

• Greater flexibility in software deployment, particularly for desktop software
• Easier license administration, including information on current license inventory, and opportunities to aggregate purchases to achieve greater discounts
• Access to certain Microsoft products, such as special desktop management and virtualization products, that are available only through volume licenses.

Making Choices

• Budget and payfor present and future software purchases
• Maintain a consistent client software configuration across their organization to reduce help-desk costs and ensure workgroup compatibility
• Track actual use and deployment of software that they have licensed from Microsoft to guide future purchase decisions and avoid licensing violations
• Balance a need for centralized license management and standardization, to contain costs and IT complexity, with a need to give operating units or outsourcers autonomy to make appropriate software purchase decisions.

This report is focused on addressing the question “What’s the best way to purchase the licenses I need?” It is intended to help readers with the following issues:

• Understanding key Microsoft volume licensing concepts and terminology
• Choosing the right Microsoft volume purchasing plan for their businesses
• Matching their software spending to their requirements and budgets, and the tradeoffs, if necessary, that they will make
• Evaluating Software Assurance, Microsoft’s upgrade rights and maintenance licensing offer
• Working with Microsoft resellers, the main source of licenses and licensing advice for most customers
• Looking ahead and timing purchases of licenses and SA to reduce costs and maximize the benefits from Microsoft’s licensing programs.

This report is part of the Directions on Microsoft Licensing Outlines series, which cover rules and purchasing considerations for specific enterprise products (i.e., “What licenses do I need to buy?”) as well as other Microsoft licensing topics. These reports are available to subscribers at http://www.directionsonmicrosoft.com/DOMIS/licensing/archive/archive.html; others can view extracts at http://www.directionsonmicrosoft.com/licensing.html. This report on volume licensing programs also supplements the Directions on Microsoft Enterprise Software Roadmap, which provides crucial intelligence about changes to Microsoft product lines that bear on licensing decisions.

What's Ahead

This 44 page report is divided into the following chapters:

“Why Buy Through Volume Licensing Programs?”  describes the advantages of volume licensing in detail, covers factors that purchasers need to consider when selecting a volume licensing plan, and introduces some of the basic concepts, terms, and features that are part of all or most Microsoft volume licensing plans.

Open License Programs”, “Select License Programs”, and “Enterprise Agreements ” explains how each of these plans (and their variants) work, the customers for whom each is most appropriate, and their advantages and drawbacks.

“Software Assurance” explains costs, payment schedule, and other aspects of Microsoft’s Software Assurance (SA), a subscription offering that provides upgrade rights and other benefits. SA is automatically included when organizations purchase products under some volume plans and is an add-on option for licenses in others.

“Resources” lists additional sources for further information on selected topics.

This report focuses primarily on business-oriented volume licensing plans and does not cover volume licensing plans for nonprofit organizations, educational institutions, or governments. These organizations have special pricing and volume plans tailored for their needs, and they should contact their local Microsoft office or a licensing reseller for assistance with volume licensing. (For a list of Microsoft Web sites about licensing options in different countries and languages, see http://www.microsoft.com/licensing/index/worldwide.mspx.)