Outsourcing and Volume Licensing

Outsourcing is a popular choice among customers for whom IT management is secondary to their main line of business. This report does not cover licenses used by application service providers who host applications and charge customers on a monthly or quarterly basis. However, conventional volume licenses are often part of outsourced IT services, such as those provided by managed service providers.

Who owns the licenses when a company contracts with another organization to run its internal IT infrastructure?

In general, licenses acquired through volume licensing are intended for the internal use of the customer. “Internal use” refers to software used to conduct the customer’s own business, including communication with external partners or customers. When the customer engages an outsourcer to manage its IT infrastructure in some way, the customer can use several options, including a managed services agreement, an Outsourcer Enrollment, or a Services Provider License Agreement (SPLA).

In a managed services scenario, a services provider simply manages all or part of a customer’s IT using the customer’s own licenses, which the customer purchases from Microsoft, usually through a volume agreement. The licenses must run on dedicated servers and cannot be used by any customer other than the one who owns the licenses. No formal agreement is signed with Microsoft, but the customer and outsourcer should document their relationship and the licenses that the service provider is using.