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Microsoft LicensingIn Five Easy Steps

Please go to www.microsoft.com/uk/preferences if you wish to review your communications preferences with Microsoft. Registered Office: Microsoft Limited, Microsoft Campus, Thames Valley Park, Reading,RG6 1WG. Registered in England No. 1624297. VAT No. GB 724 5946 15. © 2004 Microsoft Corporation. All rights reserved. Microsoft and the Microsoft logo, are either registered trademarks or trademarksof the Microsoft Corporation in the United States and/or other countries. All other logos, product names and company names mentioned herein may be trademarks of their respective owners. All informationcorrect at time of going to print (September 2004).

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Introduction 2

STEP ONE

Learning the Basics 4

STEP TWO

Taking Stock 8

STEP THREE

Business Planning 12

STEP FOUR

Making a Decision 14

STEP FIVE

Buying Your Licences 20

Glossary 22

The acquisition of any IT solution within an organisation can be perplexing. Trying to purchase for today’s

requirements, but also predicting tomorrow’s demands, within a rigid purchasing strategy can certainly be a

challenge, made even tougher when you are purchasing a non-tangible asset such as software. Your shareholders

may not immediately view this software purchase as an asset, but it is a vital business acquisition, obtained to

improve productivity, or to resolve issues and processes within the company, that will certainly interest them.

Hardware has for many years been seen as the physical asset of an IT infrastructure, accounted for within the

financials of the company, it can be seen on every desk and in every computer department. But as we all know,

hardware is only part of a business solution as it can accomplish little without software.

It is therefore easy to overlook software when considering your organisation’s key assets. Financial analysts

have often viewed assets as being tangible and visible to the organisation and will show on the financial balance

sheet. Yet more people are now seeing the business advantages of viewing a new form of asset called ‘intangible’.

Intangible assets may not appear on the balance sheet but add value and productivity to any business, such as

a process and staff productivity. Software is now being considered by many analysts as one of these intangible

assets. Just as hardware is tangible, software is intangible but both are assets.

Your IT investment and your procurement of technology solutions will be an enabler for your organisation,

opening doors and streamlining actions. This is an important investment. Millions of UK organisations buy

Microsoft® software to achieve their business objectives, solve business problems and gain an edge in today’s

competitive environment. From desktop applications such as Microsoft Office, to operating systems such as

Microsoft Windows® for PCs and servers, customers purchase Microsoft products to fulfil their business needs.

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In actual fact, organisations actually don’t buy our software. Most software companies, including Microsoft,

sell the right to use the software. Thus the item that Microsoft sells is the right to use their products – a licence.

There are a number of ways to acquire licences for Microsoft products, which this guide will explain,

enabling you to feel:

• Confident that you’re getting exactly the right licence for the software you need

• Confident that you’re not paying too much for it

• Confident that you’re complying with the law

We hope that it proves a useful reference for the future, as well as giving you peace of mind today.

What’s in the guide?This guide has been written to provide clarification on how Microsoft licences its products and to help you

understand how you can gain advantage by knowing how licensing works. Furthermore we discuss how your

organisation can save money by examining Microsoft Volume Licensing. We’ve broken the process down into

five steps, which can help you make the right decision. They are:

STEP ONE: LEARNING THE BASICS

What are Microsoft licences and why they are important? We take you through the different varieties of licences

you can purchase, and how to obtain your licences when you buy Microsoft products.

STEP TWO: TAKING STOCK

This section explains the benefits of auditing your software and IT assets, why you should audit the software and

hardware you currently have throughout your organisation, and how to do it. We guide you through understanding

the products you have and use today to assist you in the correct purchase going forward.

STEP THREE: BUSINESS PLANNING

IT demands and expectations constantly shift. This section explains the importance of considering both your

current software needs but also near and long term acquisition practices, to ensure you optimise your purchasing

strategy. We guide you through the considerations of purchasing technology today, and how to take advantage of

the technology advances and business changes that are around the corner.

STEP FOUR: MAKING A DECISION

Based on your IT audit and business plan, this section guides you through the decision process when purchasing

software, helping you to make the most appropriate choice for your organisation. It also includes an overview of

some of the options available for developers and education customers.

STEP FIVE: BUYING YOUR LICENCES

This section explains where and from whom you should buy your products and licences. It gives some tips

on spotting dealers who may be selling counterfeit software, and includes a list of reputable resellers.

GLOSSARY

We have also included a reference section for acronyms and terms.

We hope you find the guide useful!

Finding out moreAs you make your way through the guide, you’ll see this icon appear from time to time.

It points you in the direction of further information on the Web.

INTRODUCTION

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What does your licence do?The function of the licence is to provide the legal rights to use or access the products and services that we

provide. That means that the main function of the licence is to provide you with the legal proof that you have

the right to use the software.

When considering your requirements there are three areas to view:

• Desktop requirements

• Server requirements

• Access requirements

Desktop requirements

The desktop is really the client machine in your environment. It is the PC or laptop that you use at your desk to

run applications. For every machine that you have you will require a licence for the Operating System (Windows XP

etc) and then additional licences for all of the desktop applications that you run on that desktop (Word, Excel etc).

This means you are likely to have a series of licences for the desktop.

Server requirements

You may also have server software in your organisation and just like the desktop these systems also require

licences. There will be a requirement for the operating system (Windows Server™ 2003 etc) and then additional

licences for the server applications you may use (e.g. Microsoft SQL Server, Microsoft Exchange Server, Microsoft

BizTalk® Server etc). This licence allows you to run these services on the server but excludes user connectivity.

Access requirements

When there is a mixture of servers and desktops within an environment there is obviously a requirement to

connect desktops and servers together. For every user that needs to connect, log on to or access resources on a

server there will be a requirement to have a licence to access these services, called a Client Access Licence

(CAL). The CAL is a licence to access a product. So if there is a need to connect to a server for file and print

services (for example), a licence to use an application on the server (such as Exchange Server) will also require

an Exchange Server CAL.

The requirements of a desktop and server scenario can be seen clearly in diagram 1 below:

CALs are included with OEM server software, Full Packaged Product, or through a Volume Licence Agreement.

Ask your reseller which licence is best for you.

STEP ONE: LEARNING THE BASICS

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What is a licence?A licence is the right to use, with reference to software, this means that a software licence is the right to use the

software. Software is essentially intellectual capital and as such we do not sell the product, but the right to use it.

When you buy software in the shops, you are purchasing a copy of the physical program (e.g. Microsoft Word CD),

and a licence that grants you permission to use it. It is the CD program that allows you to load or install the

product but it is the licence that grants you the right to run or access the software program.

There are 2 types of the licence agreement that Microsoft issues with its products, depending on how you

purchase your product:

• End User Licence Agreement (EULA) – the most commonly known agreement, it accompanies full packaged

products bought off the shelf from retailers, and pre-installed software, bought from Original Equipment

Manufacturers (OEM). This agreement generally either comes in the product packaging on paper and also

is displayed onscreen when the product is initially installed onto a machine.

• Microsoft Volume Licence Agreement – If you are purchasing more than 5 licences for Microsoft products then

you were probably advised to purchase a Volume Licence Agreement such as Open, Select or an Enterprise

Agreement (Details of these agreements can be found on page 16). These agreements comprise of 2

components, the schedule and the Product Use Rights (PUR). The schedule lists the products within your

agreement and its start and end date. The Product Use Rights are similar to the EULA except that it pertains

to software licensed through Microsoft Volume Licensing programmes.

Both types of licence agreement require you to accept the terms and conditions before you can use the product

and clearly define product usage and obligations expected by both Microsoft and you the customer.

1x Windows XP Licence1x Office 2003 Licence

1x Windows Server 2003 CAL1x Exchange Server 2003 CAL

1x Windows Server 2003 Licence1x Exchange Server 2003 Licence

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Volume Licensing

Most of our business customers will buy licences in volume, rather than single copies. Volume licences separate

the licences from the media (product CD, manuals, technical support, packaging etc), thus allowing you to buy or

subscribe to enough licences to install on your computers from a single CD. You can obtain discounts for buying

larger volumes of licences. Most of our business customers buy licences in volume (by which we mean more than

five), rather than single copies.

Licences purchased through Volume Licensing come with additional rights that are not included with FPP or OEM

licences. Downgrade Rights, for example, let you use any prior version of the software package for which you are

licensed. Rights to use other languages are a standard offering through Volume Licensing. Furthermore, with

Volume Licensing you are allowed to create a standard software image and deploy this image across multiple

machines on your network.

The bulk of this guide concerns the various options available when buying through Volume Licensing.

The advantages of Volume Licensing include:

• More flexibility. Just as you can purchase a car through different payment schemes, such as hire purchase,

lease or buy, you can choose from a variety of payment methods for Volume Licences.

• Easier management. No need to store multiple copies of boxes, CDs and manuals for a single piece of

software that you want to install on more than one machine. All Volume Licences are managed online.

• Lower costs. Volume Licensing can entitle you to various levels of discount, depending on the type and

number of licences you want

• Access to additional benefits for support, training, tools and increased productivity.

So far we have discussed what licences are and the value Volume Licence Agreements can bring. But before you

decide to buy, you need to establish what your software requirements are. The next two chapters will help you

audit and plan your IT procurement to ensure that you purchase successfully, for today and for the future.

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Now you know what you need, the next section describes how you can obtain Microsoft products.

There are essentially just three different ways to acquire Microsoft products:

• Buying boxed software, known as Full Packaged Product (FPP)

• Buying software that is already installed when you buy a new PC, known as Original Equipment Manufacturer

(OEM licensed) software

• Buying software in volume – Volume Licence Agreements

Types of licenceBoxed software

When you buy Microsoft software (in a box) off the shelf, either through a retail outlet or by mail order, you are

buying what is known as a Full Packaged Product (FPP). You receive a copy of the product on CD, supporting

manuals and a copy of the licence, known as the End User Licence Agreement (EULA).

The benefits of buying Full Packaged Product software include being able to transfer the software from one PC

to another (providing it is uninstalled from the first) and a limited amount of free support.

This is typically the most expensive way of purchasing Microsoft software, when compared to other methods.

With a new PC

Software that is pre-loaded onto a new PC when you buy it (for example Windows XP) is purchased under an

OEM Licence. An OEM (Original Equipment Manufacturer) builds new PCs and installs the software on the PC.

As the software is preloaded, you may not get the product CD, but you will receive a manual and EULA.

(Technical support is supplied by the OEM).

This can be the cheapest option, but there are restrictions to the licence. For example, you cannot transfer the

software from one PC and put it onto another, as you can with FPP.

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Auditing your licencesThere are a number of options available to you to help you audit your software.

1. DIY

Your audit can be as detailed as you need for your business. However, we recommend recording as a minimum:

• Device (e.g. desktop PC, laptop PC, server, personal digital assistant, mobile phone)

• Date of purchase

• Serial number

• Operating system (e.g. Microsoft Windows XP)

• Software Packages (e.g. Microsoft Office)

• Invoice and any related documentation e.g. purchase order

2. Software Inventory Analyser

Our Software Inventory Analyser is a quick way to check what software is installed on your computers, and can be

particularly useful if you work in a small or medium sized businesses. It’s free of charge, easy to use and works

whether you have a single computer or are part of a networked environment.

For more information on Software Inventory Analyser, please visit

http://www.microsoft.com/resources/sam/msia.mspx

3. SAM (Software Asset Management) partners.

SAM partners are independent organisations who offer a variety of services to help customers better manage

their IT infrastructure and achieve best practice.

For more information about SAM, contact your Large Account Reseller and/or go to

http://www.microsoft.com/resources/sam/default.mspx

Managing your licencesMicrosoft keeps records of licences bought through Volume Licence Agreements only. Volume Licence customers

can access a report of their licences through one of several online tools.

For licences purchased through the Open Licence programme, you should use the online tool eOpen.

To access information about your licences you will need your agreement number and a licence number.

For further information go to https://eopen.microsoft.com

For all other agreements you should use the Microsoft Volume Licensing Service (MVLS) website at

https://licensing.microsoft.com

For Full Packaged Product and OEM (pre-installed software on a PC), we encourage you to keep your own

records of your software purchases, for example by keeping the original invoices, the End User Licence Agreement

(if applicable), and the COA label on the box.

OEM or pre-installed software has a Certificate of Authenticity (COA), which is stuck on the chassis of the PC,

the original CDs and the documentation that accompanied the CDs.

For further information about what you need to keep for proof of purchase, visit:

http://www.microsoft.com/resources/howtotell/

STEP TWO: TAKING STOCK

Auditing your hardware and softwareTo work out what your best software options are, an audit of your current technology – both software and

hardware – and the licences you hold, is recommended. This will help you to do two things:

1. Establish whether there are any discrepancies between the software you are running and the software for

which you currently have licences

2. Understand exactly where you are now, so that you can take a more accurate view of what your current and

future needs are likely to be (see Step 3: Business Planning)

The basic steps in completing your audit are:

1. Establish the number of PCs, laptops and servers your organisation has in use and the type of software on

each machine

2. Compare the information against the number of legal software licences your organisation owns

3. Account for any licence deficiencies and buy additional licences to bring your organisation into compliance

By putting in place policies and procedures to manage procurement, delivery, deployment and support of all your

software assets, you can learn exactly what software you have. You will be better placed to license what you need

and to use your assets effectively.

Keeping an up to date and accurate record of your hardware, software and licences can benefit your business

in other ways too. For example, you will have the right information to hand if you require support from a supplier,

need details for an insurance claim or for auditing purposes.

On an ongoing basis, it represents the basis of a robust Software Asset Management strategy.

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How to check you are legally licensedVolume licensing

Volume Licensing purchases are now recorded electronically. Use MVLS (Microsoft Volume Licensing Services)

to manage your licences bought under Volume Licence Agreements. Open Agreement customers should use

eOpen (see above). You should still ensure, however, that you obtain and keep legal documentation relating

to your software purchases, such as invoices from your reseller.

OEM licences

Pre-installed OEM licences must be recorded as part of your PC purchases.

To make sure that you are not unknowingly buying counterfeit software, you should check new PCs for

Certificate of Authenticity (COA) labels, and the documentation that accompanied them.

COA labels can be found stuck to the chassis of the PC. If you have PCs older than 3 years, your machines

will probably not have COA labels. Instead the COAs should be on the manual covers. If the machines are

more than four or five years old the COAs can be found in the separate COA documents that came with them.

If your Certificate of Authorisation (COA) is damaged or needs replacing, you must request a new one from

the supplier that sold the PC.

FPP licences

Purchases of boxed software must also be recorded.

For software bought in this way you must retain the original invoice, the End User Licence Agreement

(nearly always electronic), the COA label and all the other contents of the box.

The COA label can be found on the top of the box. For software bought prior to the release of Windows XP,

it can be found on the side.

To find out how to spot counterfeit software please visit: http://www.microsoft.com/resources/howtotell

For detailed information on software compliance and your responsibilities please visit

www.microsoft.com/uk/piracy/

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Software maintenanceFollowing the purchase of the software asset, you need to consider its continual use as a solution, and how to

gain maximum benefit from it. Not only will you want to deploy this rapidly and effectively, but you will also want

to ensure that operational efficiencies are in effect. This means that in addition to your purchases, you should

also look to maintain the solution.

When you look for maintenance you will want maximum benefit and ROI on your software procurement.

A maintenance programme should integrate both business and technical needs to provide a complete

software licence procurement solution. These needs are outlined in the diagram below.

Diag 1 : Maintenance should include business and technical needs

The maintenance offering from Microsoft is Software Assurance, and is only available through Volume Licensing

programmes. Some products are available as upgrades through boxed products (FPP).

Please note: full versions of Windows operating systems are only available pre-installed on a new PC (OEM),

or as FPP. Upgrades are available through FPP or Volume Licensing.

For more information about Software Assurance go to:

http://www.microsoft.com/uk/licensing/software-assurance

Please also refer to Section 4: Making a Decision.

Securing your budgetTo ensure that you can secure the investment you need, it is advisable to base your IT recommendations on your

company or department’s business plan.

Successfully obtaining investment involves linking IT investment plans closely to business goals, so it is clear

to management that IT is supporting the objectives of the business.

As part of your software and hardware audit you should also look at the savings, in terms of management and

administrative time, which can be made by centralising your purchasing. For instance, some of our licensing

programmes offer the option to standardise on Microsoft software, while others enable you to ‘buy as you go’.

For more information, see Step 4: Making a Decision.

STEP THREE: BUSINESS PLANNING

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Your licensing needs are unlikely to stay the same forever. After auditing the software you are using, and evaluating

your current licences and licence requirements, you should consider how your IT infrastructure might evolve

moving forward. This should be based on expected usage with forecasts for growth of your organisation, as well

as any unrelated changes you can foresee in the way you manage IT.

Planning for the short, medium and long termPlanning your software and hardware over one, three and five years is the most realistic way of ensuring that you

take advantage of the best purchase options.

When you look at the potential changes you might face, your evaluation should include:

• How many employees you expect your business to have

• Whether your employees will be using a single computer, desktop or laptop, or they will be using multiple

computers (if they work from home, for example)

• If you are considering any projects which have an impact on your software use – for example you may be

thinking of hosting a website for your business

• If you need to upgrade or change versions of software to cope with customer/supplier/partner demands

• If you are considering replacing hardware or buying new hardware

• How you plan to support your software implementation and ongoing management

• How you plan to ensure that you are obtaining maximum ROI on your software investment

(e.g. employee training, support, tools)

MANAGEMENT

MANAGEMENTHow will you manage yourasset so that you have atransparent and true reflectionof your IT infrastructure?

INVESTMENTHow will you invest in your asset for optimal performanceand not only look at the initialROI but also further ROI byextending and enhancing your asset utilisation?

GAIN MAXIMUM BENEFITHow will you ensure that you are gaining maximum benefitfrom your asset? How will youdeploy it and extend it into your organisation?

SUPPORTHow will you support your asset during the implementationphase and then onwards on a daily basis?

INSURANCEHow will you insure against the future and against changes to your environments or software? How will you insure to gainmaximum competitive advantage when faster, more advancedproducts arrive?

TRAININGHow does your company trainyour employees to deploy,maintain and use your asset for maximum operationalefficiency and to gaincompetitive advantage?

LICENSINGHow will you acquire the rights to use the software and whatare the best finance terms forthat agreement? Does yourcompany want to minimiseupfront costs and have moreversatile accounting?

GOVERNANCEHow will you ensure that youdisplay good governance anduphold the most appropriateinternal and external practices?

SUPPORT TRAINING

LICENSING

GOVERNANCEINSURANCEGAIN MAXIMUM

BENEFIT

INVESTMENTSOFTWARE

ASSET

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Perpetual licence optionsOur perpetual licence options (those that let you own the licences forever) can be split into those where you buy

the software with a single transaction and those you can pay for over time, like a hire purchase agreement.

Buy

If you prefer to pay for your software on an ad hoc basis. These types of licences are perpetual licences meaning,

you have the right to use that version of the software forever.

Open Licence Agreement

For small to medium sized businesses wanting an easy, one-time transaction, and the flexibility to buy more

licences when required. To be eligible for an Open Licence you must buy five or more perpetual software licences.

The agreement gives you perpetual rights to use the software, and for two years you can add more licences at the

same rates of discount as the original order.

Select Licence Agreement

Aimed at organisations with 250 or more PCs that have mixed technology requirements, this agreement runs for

three years. The key feature is that discounts are flexible because they are based on the overall estimate of the

number of licences you need, which is adjusted annually to reflect your purchases against your estimate (forecast).

Hire purchase

For customers who would like to spread the fixed cost of the licences over a period of time (like interest free

credit). Again, at the end of the agreement, you will own the right to use the software for as long as you wish.

Multi-Year Open Licence Agreement

The Multi-Year Open Licence Agreement lets you pay for the licence over three years, and use the latest available

versions of the software. If a new version is released during the three year term of your agreement you can install

that version if you wish.

Enterprise Agreement

For organisations with 250 or more PCs. Called the Enterprise Agreement, this is for organisations who want all

their desktops to have access to the latest technology. Offering large discounts, the agreement is easy to manage,

with split payments and standardised software.

Non-perpetual licence optionsFor customers who would like the lowest entry cost to obtaining Microsoft licences, and are interested in using

only the latest technology. These types of licences give you the right to use the software for a specified period of

time, and at the end of that period you can then choose to renew the agreement, buy a perpetual licence or stop

using it altogether.

There are two non-perpetual licence types available, both of which equate to ‘leasing’ the software:

Open Subscription Licence

This is for organisations with a minimum of five desktop PCs who want to standardise on Microsoft software. The big

difference is that you pay only for the right to use the software for a three year period, which offers a low entry cost.

Enterprise Subscription Agreement

Again, similar to its perpetual counterpart (the Enterprise Agreement), the key difference being that you don’t buy

permanent use of the software. This agreement offers flexibility and further reductions.

We have summarised the options for businesses in the pull-out Programme Quick Reference Chart on the next page.

STEP FOUR: MAKING A DECISION

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Based on your audits and forecasts, you should now be in a position to identify the changes you wish to make.

It may be that you don’t need any more licences. It is also possible that you can meet all of your licensing

requirements by buying a few boxed software packages. If, however, you need to buy more than three or four

licences, it’s time to investigate your Volume Licensing options.

To help you identify the best Volume Licensing programme, we have broken down the options into decision

making steps:

Perpetual or non-perpetual?First you need to consider whether you want to own the rights to use the software forever or whether you want

only temporary rights to a product, depending on your business requirements. For example, you may consider a

temporary licence if you do not have the budget to buy software licences outright, if the software is only being

used for a specific project, or because your finance department does not wish to recognise the software in its

accounts.

Once you have decided whether you want perpetual or non-perpetual licences, your next choice is how you want

to pay for your licences – buy up front, buy over a period of time (like a hire purchase style scheme) or lease.

To find out which agreement may be suitable, please go to the relevant section (perpetual or non-perpetual).

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Four key factorsBefore you turn to the next section to find out about approaching a reseller, it’s a good idea to consider the

following four factors:

1. How many PCs will you be buying for?

Your audit (section 2) and business planning (section 3), will determine what, and how many licences you require,

if at all.

If you need to buy new PCs, OEM licences may be the best option.

Alternatively, you may be looking to standardise your desktops on all the same products, in which case you may

consider an enterprise wide licence programme (such as the Open Subscription Licence if you have more than

five PCs, or the Enterprise Agreement if you have more than 250). Alternatively, the Select Licence Agreement

enables you to choose which products you wish to install. The options are summarised in the Programme Quick

Reference Chart on page 16.

2. Do your want to lease or own your licences?

Leasing your licences (i.e. choosing non-perpetual licensing, for a fixed period of time) is a good option for

organisations who want a cheap entry into a Volume Licence Agreement. Leasing is also suited to organisations

who do not wish to own the software and who only want access to the latest software. If you decide to own your

licences (i.e. opt for a perpetual licence type), you will still be able to keep your software up to date with Software

Assurance.

3. How would you prefer to pay for your licences?

Your answer to this question will depend both on how much you are prepared to invest in one go, and your answer

to question (2). You can pay for your licences as and when needed (e.g. Open or Select Licence agreements), you

can pay in fixed annual instalments (e.g. Multi Year Open and Enterprise Licence agreements), or you can ‘lease’

your licences, as described above.

4. Do you wish to have access to the latest software versions, additional tools, support or training, to help you to

get the most from your software assets?

If you have a software procurement and deployment strategy, choosing a Volume Licence with Software

Assurance would offer both financial and productivity benefits. In addition to ensuring you benefit from the latest

technology, you can have access to benefits including tools and support that will help deployment,

implementation, training staff and software management.

Software Assurance is included with Enterprise Agreements, Open Subscription Agreements and Multi-Year Open

Agreements, but is optional with Open and Select Agreements.

For more information on our software maintenance programme Software Assurance, visit:

http://www.microsoft.com/uk/licensing/software-assurance/default.mspx

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Programme Quick Reference ChartFPP OEM Open MYO – MYO – OSL Select Enterprise Enterprise

License Volume Enterprise Subscription

Customer Organisations Organisations Small Small Similar to MYO Small and Large and Large and Large and profile who want to buying new PCs businesses businesses Volume but medium sized corporate corporate corporate

buy 1 or 2 wanting an wanting a aimed at business organisations organisations organisations licences easy, onetime flexible, simple, businesses wanting low that want that want to that want to

transaction ‘buy as much that would like cost entry flexibility to standardise standardise process with as you need’ to standardise purchase and their desktop their desktopthe flexibility purchasing their software pay for their software software, but do of acquiring scheme with licences as and not wish to ‘own’licences from the ability to when needed the software a broad reseller spread channel payments

annually

Customer Everything Software is Simple to use Significant Software Rental option Significant Have access to Have access to benefits the customer pre-installed and understand discounts Assurance (SA) preferred by price discount latest technology latest technology

needs is in on hardware available to is included in customer for benefits on all PCs on all PCs acrossthe box: customers on the agreement, possible tax across their their company software CDs, product orders giving the reasons, plus company for a at a significantlymanual and with the added customer instant the benefit of fixed cost. reduced costEULA benefit of split access to the SA being Licence reflecting their

payments, MYO latest technology included in the purchase is split non-perpetualincludes and support, the agreement, annually for licence typeSoftware plus competitive giving the ease of Assurance costs with customer instant budgeting

enterprise access to the discount latest technology

and support

Entry level No entry level No entry level 2 PCs 5 PCs 5 PCs 5 PCs Organisations Organisations Organisations with minimum with minimum with minimum of 250 PCs of 250 PCs of 250 PCs

Contract N/A N/A 2 years 3 years 3 years 3 years 3 years, with 3 years, with 3 years, with term 1 or 3 year 1 or 3 year 1 or 3 year

renewal options renewal options renewal options

Payment Paid in full at Paid for with PC Upfront in full Payment split Payment split Payment split Licences bought Payment split Payment split term time of over the 3 years over the 3 years over the 3 years with Software evenly annually evenly annually

purchase Assurance are split evenly annually. Licence only purchases are paid monthly in arrears

Upgrading Some Upgrades Optional Software Software Software Optional Software Software products upgrades available purchase Assurance Assurance Assurance Software Assurance Assurance

available through FPP (Software included included included Assurance included includedor through Assurance)SoftwareAssurancein VolumeLicensing

Does Yes Yes Yes Yes Yes No – unless Yes Yes No – unless theycustomer they renew or renew or ‘buyown software ‘buy out’ the out’ the licencesrights after licences agreement expires?

1918

Education and charitable organisations Our education licences are designed to suit the requirements and budgets of staff and students in universities,

colleges and schools. They can also be purchased by charitable organisations at similar prices. To see if you

qualify for educational licensing, please visit www.microsoft.com/uk/education/how-to-buy/do-you-qualify

For individuals, the Student and Teacher Licence for Office Standard offers easier and more affordable ownership

of Microsoft products.

For more information on licensing and eligibility for education and charitable organisations, and for a list

of resellers with specialist expertise in these sectors, please visit

http://www.microsoft.com/uk/education/how-to-buy/edu-licensing/

Please note that proof of status is required from any organisation wishing to acquire licences under these

agreements.

Developer options Software developers can buy software through the Microsoft Developer Network (MSDN).

Software bought as part of MSDN® Subscriptions is for development and test purposes only, and using it in

a live production environment is prohibited. The MSDN subscription is licensed per developer. Anyone in the

organisation can access that software, but for test purposes only.

There are several levels of MSDN subscription:

• MSDN Library – is an essential resource for developers using Microsoft tools, products, and technologies.

It contains a bounty of technical programming information, including sample code, documentation, technical

articles, and reference guides. MSDN Library is not a single licence and can be shared freely within an

organisation. Subscriptions must be renewed each year to continue to receive quarterly updates.

• MSDN Operating Systems – delivers continuous updates to the .NET Framework. With an MSDN Operating

Systems Subscription, you will have all the resources you need to develop custom Windows solutions and XML

web services.

• MSDN Enterprise – provides first and continuous access to Visual Studio® .NET Enterprise Developer,

Operating Systems, product updates and essential programming information for building applications

and XML web services.

• MSDN Universal – provides first and continuous access to Visual Studio .NET Enterprise Architect,

plus the complete set of Microsoft Operating Systems, Enterprise Servers, product updates and

essential programming information for building applications and XML web services.

Subscribers also receive a full version of Microsoft Office, for business or personal use.

If you need more than one MSDN Subscription licence you can save even more money by buying through

Volume Licensing.

For more information, please visit

http://www.microsoft.com/uk/visualstudio/howtobuy/msdnlicensing.asp

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Avoiding counterfeit software.At the time of writing there is no regulatory body that covers IT resellers, and counterfeit software continues to

circulate. As well as resellers who deliberately engage in piracy, some may sell counterfeit software in good faith.

Buying from either could land you in contravention of the law.

If you are buying boxed software off the shelf, please make sure it is from a reputable retailer. If you are buying

Volume Licences, or licences that form part of a consultancy or support package, you will need to be a little more

vigilant, for the reasons described above.

The good news is that by asking a few simple questions you can make sure that your reseller is offering genuine

Microsoft software.

Reputable resellers will have the following characteristics:

• First, and most importantly, they will have specialist licensing expertise, or access to someone who does

• They should be able to offer you a variety of ways in which to purchase licences

If your reseller claims to buy from a broker, probe further. There is a risk they may be dealing in either counterfeit

or illegally imported software, whether or not they know it.

How do I know I am paying a fair price for my software?A question we are often asked is what price a buyer should pay. Because we sell through resellers, this is

impossible to answer. They sell at prices they choose, and which we cannot legally influence. You will need to

compare the prices offered to you from different sources to assess if you are getting a competitive quote, just as

you would with other purchasing decisions.

And always bear in mind that if the price sounds too good to be true, it probably is.

Next steps: finding a resellerYou are now ready to start approaching resellers directly.

Please visit the web page at the address below for an up-to-date list of resellers who are Members of the

Microsoft Partner Programme, http://www.microsoft.com/uk/licensing/buy/where/default.mspx

Need help?The Microsoft UK Licensing website contains comprehensive licensing information, from how to choose

your licence agreement to managing and maintaining your software assets.

Visit: http://www.microsoft.com/uk/licensing

Microsoft Licensing HelplinePhone: 0870 60 10 100 – select the business option and select 3 for licensing.

Lines are open 8:00 a.m. to 6:00 p.m. Monday to Friday (except bank holidays).

Email: licensing@microsoft-contact.co.uk – we’ll respond to your email within 48 hours.

STEP FIVE: BUYING YOUR LICENCES

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We develop the software, resellers sell itWe specialise in developing software, and we depend on the reseller channel to sell it to our customers,

along with the appropriate advice and support.

Because your needs vary, we sell though a wide variety of resellers, ranging from independent consultants

to shops and large organisations that offer more extensive support and services.

If you would like to suggest ways in which we can make licensing even easier to understand,

please email us at licensing@microsoft-contact.co.uk

Finding the right supplier When choosing a supplier, it’s a good idea to look for a reseller that understands the issues facing your business.

It makes sense to shop around, not just for the best price, but for the most effective total solution. This includes

value-added services you may need, such as Software Assurance services and Software Asset Management

services.

Many resellers have expertise in certain markets or industry sectors. It’s worthwhile asking to see case studies

if you need someone with experience in your line of business.

For more information and a list of resellers we work with, please see ‘Next steps: finding a reseller’ on page 21.

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Downgrade Rights

The right to use the latest version of software and be licensed to run a previous version of the software in placeof the current version. This is available for software acquired through Volume Licensing programmes.

End User Licence Agreement (EULA)

Licence agreement that resides in electronic form on the computer on which the relevant software is installed.

Enterprise

Referred to in Volume Licence Agreements, and describes how customers can standardise their entireorganisation on Microsoft technology, often on a standard platform of Microsoft products.

eOpen

Online tool for Open Agreement customers, where they can obtain their Volume Licence Keys, manage theirlicences and activate their Software Assurance benefits.

Full Packaged Product (FPP)

Software bought from a retailer in a box. Contains software CDs, documents and a licence (EULA).

Home Use Rights

The right of a computer user to install software they use at work on their home PC. A feature of some (but not all)Volume Licence Agreements and a benefit of Software Assurance. Applies only to Microsoft Office Software.

Microsoft Developer Network (MSDN)

Subscription service that offers developers the latest versions of Microsoft software for development andpersonal use, as well as training and support. Available in five versions: MSDN Library, MSDN Operating Systems,MSDN Professional, MSDN Enterprise and MSDN Universal.

Microsoft Part Number

The unique number used by Microsoft, our licensed European distributors and the trade to identify licences forMicrosoft software.

Microsoft Partner

A company that sells Microsoft Software and has registered for the Microsoft Partner Programme.

Microsoft Software Inventory Analyser (MSIA)

A free piece of software for identifying which Microsoft software, which versions and how many versions arerunning on your network or computer.

Microsoft Volume Licensing Services (MVLS)

An online tool for Volume Licence customers where they can obtain their Volume Licence Keys, manage theirlicences and activate their Software Assurance benefits.

Operating System

The underlying software that enables a PC to run other programmes. Examples include Windows 2000, WindowsXP, or Windows Server 2003 for servers.

Original Equipment Manufacturer (OEM)

A company that builds and sells computers. Also used to describe the Microsoft OEM Licence, which allowscomputer makers to pre-install Microsoft software on the machines they sell.

Non-Perpetual Licence Agreement

A licence agreement that allows you to use the software for a finite time period, i.e. three years.

Per-Processor Licensing

For certain server products, licences can be obtained for each processor within a server, thus removing the needfor Client Access Licences (CALs) and enabling unlimited access to the server.

GLOSSARY

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Break-even analysis

Used in this guide to describe the way to work out whether you should buy server licences on a per-processor orCAL basis.

Business Software Alliance (BSA)

Not-for-profit organisation of which Microsoft, and many other software development companies are members.Exists to educate business and lobby government on the importance of software licensing.

Certificate of Authenticity (COA)

Document that proves the authenticity of Microsoft Software bought under FPP or OEM licences. Usually foundattached to a PC or software box.

Client

A computer or other networked device (e.g. mobile phone or PDA) that connects to a server.

Client Access Licence (CAL)

A licence necessary for a client device (e.g. computer, mobile phone or PDA) to connect to a server runningsoftware from Microsoft.

Desktop

A desktop or laptop computer.

Device

A computer, PDA or mobile phone.

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Perpetual licence agreement

A licence agreement that allows you to keep the software and use it indefinitely.

Portable Use Rights

A feature of some Microsoft Licence Agreements, Portable Use Rights allow you to install desktop software on a laptop computer as well as the desktop machine for which the software was purchased.

Processor

The central processing chip in a computer. Most computers have only one, but some more powerful workstationsand servers have more than one. See also Per-Processor licensing.

Reseller

A company that sells Microsoft licences, primarily to businesses in the form of Volume Licensing. Many offersoftware and licences with value-added services such as consultancy and support.

Retailer

A shop that sells boxed software.

Server

A powerful computer used to support a network of computers that depend on it for some applications and resources.

Software Asset Management (SAM)

An ongoing process of managing your software inventory.

Software Assurance

An extension to Microsoft licensing programmes that offers the opportunity to upgrade to new versions of thesoftware, spread payments and benefit from additional training, support, Home Use Rights and discounts. A standard feature of some Volume Licence Agreements.

Software platform

An operating system and family of productivity applications, e.g. Microsoft Windows XP Professional and MicrosoftOffice XP.

Transfer Rights

The right to transfer software from one PC to another. A feature of some Microsoft licence agreements.

Upgrade

Moving from an older version of Microsoft software to a newer one. In most cases it does not involve buying thefull version of the new product. Instead upgrade versions are available, at reduced cost or as part of an ongoinglicence agreement.

Value-added services

Services such as consulting and support, which many resellers sell in addition to software licences and hardware.

Vendor

Term used in the IT industry to describe companies that develop software for commercial sale, e.g. Microsoft. Not to be confused with resellers, who sell software to the customers who will use it.

Volume Licence Key (VLK)

A unique code that is required when installing Microsoft software using Volume Licence CDs. The VLK can befound on either a licence confirmation sent to the customer or on eOpen or MVLS.

Volume Licensing

The arrangement by which multiple copies of licences for software maybe purchased, starting from five licencesand/or two PCs.