Bravo Reference: Microsoft Licensing Basics

by Sam C. Chan


First Published: November 10, 2005
Updated: June 19, 2007

Software is intellectual property, like a book or a music CD. A software product license grants you the legal right to run a software.

Microsoft License Types

  • Volume Licensing for Organizations (VLP)
    Offers substantial cost savings if you purchase five or more licenses.
  • Original Equipment Manufacturers (OEM)
    Products come pre-installed when you purchase a new computer.
  • Full Packaged Product (FPP)
    Shrink-wrapped boxes of licensed product purchased from software retailers.
  • Independent Software Vendors (ISV)
    Allow companies to embed Microsoft software with their own applications to create integrated solutions.
When most business users and resellers talk about "licensing," they're actually thinking of volume licensing, which is what we'll focus on here. 

Volume Licensing Overview

Benefits of Licensing Benefits of Software Assurance
  • reduce cost of software acquisition
  • better software licensing management
  • eliminates need for product activation (XP)
  • in-house volume activation server (Vista)
  • software upgrades
  • spread payments annually
  • tech support
  • deployment & monitoring tools
  • access Microsoft source code
  • training

Volume Licensing Programs

Microsoft Software License Type Client Size Client Type Customer Profile
Software Assurance
Available with all license types 5+ Corporate, academic, charity, government Upgrade plan.
Software Advisor Available with Open License Value 5 - 250 Corporate, government As a Microsoft Software Advisor your organization will be rewarded for its assistance to small and medium business customers ("End User Customers") in assessing Microsoft technology and acquiring Microsoft Open License Value Software.
Open License 6.0 Open Business
Open Volume Open Value *
Multi Year Open**
Open Subscription Licensing (OSL) **
5+ Corporate, academic, charity, government Designed for customers who desire an easy, one-time transaction process with the flexibility of acquiring licenses from a broad reseller channel, with the ability to spread payments annually.
Select License 6.0 Company-wide Option 250+ Corporate, academic, charity, government Designed for medium, large, and multinational organizations with mixed Microsoft license requirements, decentralized purchasing, and the ability to forecast purchases.
Enterprise Agreement 6.0 Enterprise Agreement
Enterprise Subscription Agreement
250+ Corporate Designed for medium, large, and multinational companies that are interested in standardizing their enterprise and value the benefits of centralized purchasing.
Academic Licensing All license types No minimum Academic institutions of various sizes Four Volume Licensing solutions that are designed to meet the specific needs of education institutions.
* Available in USA, Canada, Japan, Malaysia, New Zealand, Singapore, and Australia only.
** Available in Microsoft Europe, Middle East, and Africa (EMEA) only.


Notes for Consultants and Clients

Open Business
  • Require 5 licenses minimum to get an "authorization"
  • combined server/application pools
  • No minimum on subsequent orders (single license OK)
  • Authorization expires after 2 years of inactivity
  • Optional Software Assurance (SA)
Open Volume
  • 500+ points to qualify
  • server pool & application pool
Open Value
  • Direct w/ Microsoft
  • Partner as agent
  • Payments over 3 year period


See also:

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