New License Rule for Contractor Access

• Contractors and other nonemployees who access an organization’s Microsoft systems face new licensing rules in Oct. 2024.
• Costs will fall for some part-time contractors but go up for full-time, remote temporary workers.
• The rules have not changed for almost 20 years, so organizations should review longtime licensing practices.
• Affected Enterprise Agreement customers should ask for clarifications or exceptions in renewal negotiations.

In Oct. 2024, Microsoft will publish the first material change to the definition of “external user” in almost 20 years.  External users are nonemployees who access an organization’s instances of products such as Windows Server, Teams, and SharePoint  (online and server).  In some cases, external users can be licensed at lower cost for these and other products, so the change could affect customers’ costs and trigger changes in licensing practices. The accompanying chart summarizes where the changes will have the biggest impact: contractors and other agents who access an organization’s Microsoft systems to do work for the organization.