Last updated:
22 October 2006;
Supplements this
Knowledgebase Article.
Overview of Licensing Options for
Windows and Office
Microsoft's
Licensing Site is the authoritative and comprehensive guide to
understanding licensing of Microsoft products. Unfortunately, the licensing of
commercial software is not simple or straightforward. There are many
options and conditions and criteria, and this makes it rather daunting for individuals and small
business users to find their way through the complicated scenarios.
When in doubt, contact Microsoft or its authorized representatives to ensure
that you understand the eligibility requirements and the implications of licensing for your specific
environment. This document is intended to provide a
broad overview of the options available today for licensing the Windows
operating system, and the Office productivity suite. It does not cover every
single licensing option -- just the common/popular ones.
Individual OS License Programs:
Volume OS License Programs:
Special License Programs:
Be advised that the installation keys for each type of
license will only work with the appropriate media. OEM keys
will only work with OEM media -- not with Retail or Volume
Licensed media. The same is true for every other combination of media
and installation keys.
There are two retail licenses:
Full Retail and Upgrade Retail
Both versions can be used to create a clean install, although
the Upgrade version will check for the existence of a previous, qualifying
OS (either on disk or via CD). When you use an upgrade license, you are not
free to sell or otherwise transfer the qualifying upgrade product to anyone
else. An
upgrade license does not represent a separate product -- it is a
continuation of the previous license.
Outside of
the upgrade scenario, a Retail License is transferable to a
separate machine, quite unlike the OEM License. To
transfer an Upgrade Retail License, you'd have to also transfer all of the
qualifying OS products tied to that license.
For example, if you were
to license a copy of Windows 95, and then
purchased an upgrade license to Windows 98, and
later purchased an upgrade license to Windows 2000 Pro,
you could not transfer any of those licenses without
transferring them all at once, and as a single entity
(at which time you would no longer qualify for an
upgrade license to XP or the next desktop version of Windows).
NOTE: All individually licensed versions of Windows XP/2003 and
Office XP (including Retail) require
Product
Activation.
OEM = Original Equipment Manufacturer, such as Dell,
IBM, HP/Compaq, etc.
An OEM license is a lower cost license that is obtained
when the OS is purchased in conjunction with some hardware. Typically,
this hardware is an entire computer, but other qualifying hardware are hard drives, CPUs, motherboards and video cards.
OEM licenses come with no phone support
from Microsoft (the web is always an option) and can only be
used for clean installations (not upgrades).
Furthermore, OEM licenses are bound to the hardware they were purchased
with, and
cannot be transferred or resold once
installed. If you purchase a
Gateway system, for example, the operating system license that comes
with the computer is forever bound to the computer. You cannot
transfer it to another machine, and if you ever choose to obtain and install
a retail Windows license on this machine, you will not be able to use the
OEM license anywhere else.
NOTE:
All individually licensed versions of Windows XP/2003 and Office XP
(including OEM) require
Product
Activation.
NFR = Not For Resale
NFD = Not For Distribution Products
bearing these licenses are usually provided free or through contests, seminars,
promotions, etc. A
NFR product cannot be resold, although it may be given away
if it has not been opened or installed and contains all necessary licensing
information along with the original
packaging. A NFD product cannot be
given away or sold. If you have no use for it, then its next home will be
in a garbage can somewhere. This usually applies to promotional copies
of Windows or Office that Microsoft makes available at seminars.
Be advised that certain
subscription-based licenses must be renewed or removed at the end of their
terms. The ActionPack
licenses operate in this fashion, whereas MSDN
Subscriptions are provided with perpetual licenses.
There is a
Microsoft Knowledgebase article addresses the licensing of the
Action Pack.
NOTE:
All individually licensed versions of Windows XP/2003 and Office XP
(including NFR and NFD) require
Product
Activation.
All versions of Windows XP/2003 and Office XP licensed under a Volume Licensing
program are exempt from
Product
Activation. This
includes Volume Licensing of Academic
editions. Products under a volume license are commonly referred to as Corporate Editions.
Volume licenses allow qualified corporations, schools, small
businesses, and other organizations to obtain OS licenses (and
licenses for other Microsoft product) at a discount, and with easier tools to
manage and deploy the licenses. Additionally, there is no requirement for
individual activation, as with the individual licenses, although there is
still a corporate/enterprise level activation that occurs as part of the
online license management. There are
several volume licensing plans which are appropriate for
organizations of different sizes, from small businesses to large
enterprises.
There are several MSDN Subscriptions available, ranging from a few
hundred dollars to several thousand dollars. This product is aimed at the
development community and provides access to SDKs
(software development kits) as well as multiple licenses of desktop
and server OSes, plus other BackOffice tools (e.g.
Exchange, SQL Server). Although multiple licenses are involved, it
is still considered an individual license product as all of the licenses
must be used by one individual, and cannot be used in a production
environment. The product comes with support, but only for development
environments. Additionally, many of the server products have
hard-limits of 10 inbound user connections, making them thoroughly
unsuitable for most production environments.
MSDN Subscriptions provide perpetual licenses.
If you choose not to renew the subscription, you are still entitled to use the
software that was obtained during the subscription period, but you will not
have access to any new software or the MSDN Subscription area of the
MSDN website. This is not true of
ActionPack
licenses.
NOTE:
Although MSDN licenses are considered Volume Licenses, they still require
Product
Activation.
Academic licenses are different from the other licenses in
that their only distinction is licensing, not physical product. You can purchase Academic licenses of both Retail
and MSDN products, and you can purchase Academic Licenses
under a volume license -- which eliminates individual activation issues.
Academic licenses are intended to be used in an educational
environment or by those attending educational institutions, and is only
valid for the time that one qualifies to be a member of the educational
facility in question. An Academic edition of a Microsoft product can be upgraded to a
different license type at any time,
and it is not different in any physical way from the non-Academic editions
of the software in question. NOTE:
All individually licensed versions of Windows XP/2003 and Office XP
(including individually licensed Academic editions) require
Product
Activation. Volume licensed editions do not require
Product
Activation.
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