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Microsoft Licensing

Posted on 2012-03-27
Medium Priority
Last Modified: 2012-04-04
We would like to know what most people are doing when it comes to purchasing Microsoft Software.  We know that there are OEM Licensing and Volume Licensing but what are most people using?
Question by:Amerilabdvickers
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Expert Comment

by:Frank McCourry
ID: 37772642
OEM Licensing is good when you are purchasing a single use system that you have no intention of upgrading or replacing.  Volume licensing is the best option for perpetual use, re-usable licenses.  

We use both.  It depends.

Expert Comment

ID: 37772674
There are the standard one use license...I believe they call them upgrade license. You would use it if you have a bare hard-drive or something like that. It can only be used on that one machine, but I believe you can re-install and everything.

OEM is only meant to be installed once, and THAT'S it. can't move it to another HD or anything legally speaking.

Volume license is great for businesses.

As far as who's using what the most?

Businesses would use the volume license preferably, home users would use OEM and standard upgrade.
LVL 40

Assisted Solution

als315 earned 1000 total points
ID: 37772856
There are more then two options. For every computer you should have OEM or Box license for Operating system (GGK and GGS are kind of OEM license). OEM license could not be moved from old computer to a new one, when BOX could. It could be activated on a new HDD, but you can't change motherboard (but even motherboard could be replaced during computer warranty). OEM license could be sold only with computer. BOX - separately. They also have different price, of course.
Server OS and Office applications license could be OEM, BOX and corporate (OV, VL, OVS). OEM and corporate licenses could be downgraded (you can use Windows XP on a computer with license to WIndows 7), but downgrade of OEM licenses shoud be done by computer supplier (GGS license could be downgraded yourself).  
OEM and Box licenses are similar. You can calculate different corporate programs here:
For every product you can buy Software assurance (you will be able to use latest a
In my company we are using OEM licenses for Windows and corporate licenses for server and office products (sometimes OV program)
LVL 28

Accepted Solution

jhyiesla earned 1000 total points
ID: 37772864
Basically the other two are correct; it depends.

Here's a look at our environment. Typically we purchase the current shipping version of Windows OEM with the PC; that is the least expensive way to purchase Windows. BUT we do NOT typically upgrade Windows once it's purchased. This means that we can have two or even three versions of Windows in our environment, but mostly that's not been a problem for us. We do not find that it increases our TCO.

We used to do the same with Office and could have several different versions of Office running. Again, we typically don't upgrade versions of Office unless we need to do so.  At least for Office, if you have a need to have all of your PCs running the same version, then it pays to buy Office through an Open or Select License (check with your VAR) AND get Software Assurance. As long as you pay the SA fee each year you have "free" upgrade access to whatever new versions come down the pike.

With our servers we used to by the servers as we needed them and get SA on the CALs only. Since that's typically the more expensive part in a larger environment it paid for us to do that.  We finally got large enough that an Enterprise Agreement made sense. With the EA it costs a lot up front, but again you can get new versions of everything in your EA as long as you continue to pay the SA fees.

There is not much cost savings for smaller organizations unless you get the SA or are content with OEM versions of the OS and perhaps Office.

If you have more than a handful of machines, sit down with a VAR (not MS) and seriously discuss your options and the costs.  Don't get hung up on terms like TCO or accept typical MS assumptions about your environment. Look at your real needs and how you really do business and have the VAR help sculpt something in that world.

MS tried to feel me EA for years, but because of how we do business it never ever made financial sense no matter how the sliced it.  What eventually pushed us over to EA was the need to have SharePoint and the cheapest way to get that was an EA and that just brought over other pieces of the Core with it.  Overall I'm not sure we're saving much if anything, but it did bring some stability to our licensing.
LVL 96

Expert Comment

by:Lee W, MVP
ID: 37773709
When it comes to servers, in my opinion, NO ONE should be buying OEM licenses EXCEPT if you are getting Server 2008 R2 Foundation Edition OR Windows Storage Server (and the only reason those are exceptions are that they are only available via OEMs).

Why?  Very simple:  While I *BELIEVE* you can virtualize them, you can never move the virtualized system off the hardware it was sold with.  This means that if you want to implement a VM cluster or a BDR, you CANNOT without purchasing a new server license.  And with OEM licenses dieing with the hardware, I know many people who can and want to re-use the license later.

Windows client operating systems have NO CHOICE.  You MUST get OEM.  There is no Volume license for client systems without operating systems.  The VL license you buy for Windows is an UPGRADE license and/or SA.  That said, all but the smallest of businesses should get at least ONE volume license so that they can re-image the workstations.  Re-imaging rights are ONLY part of volume licensing and are, in my opinion, well worth the 1-5 license minimum purchase to obtain.

Office depends on the needs.  ONLY Volume licenses can be installed on a remote desktop server (RDS/Terminal Server).  OEM licenses are often significantly cheaper, but do you want to keep purchasing office new every time you get a new PC?  I prefer a volume license of Office whenever possible, but for the smallest of businesses, I'll get OEM - warning them first.

Software Assurance is an upgrade that adds features.  Think about - few if any products Microsoft offers come in an "upgrade" SKU anymore.  Software assurance costs, roughly 150% of the cost of a standard volume license - so if Office standard is $400 then Office Standard with SA is $600.  Give or take.  Among the benefits of SA is the PREPAID upgrade (without SA, you're paying another $400 when the next version comes out, if you want it), the ability to offer employees a copy for a nominal fee for use on their home computer (this CAN increase productivity, especially for workers you want to be able to telecommute), and even a training session.  Few people are aware of these benefits and fewer still take advantage of them.  When you realize what you're getting, it's really not a bad offering... but it can add up.

Just remember, the ADDED RIGHTS Volume License is giving you is intended to INCREASE it's value to you.  The concept being that if you can get more work done because you KNOW how to use the software (Office training), because you can work at home (office license for home use), and because you'll get the next version when it's released with even more capability, you'll be able to work smarter and generate more money for your company - which is why Microsoft charges more for it - under the idea that you'll make more, they want a small cut of that extra profit.  (at least that's my understanding).

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