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Understanding Your Licensing Options

Learn how you can best optimize your software assets and accommodate future growth in a cost-effective way.

Software licenses are often a large part of an organization's IT budget. If your company's software is not licensed correctly—whether you have too few or too many licenses—you can face potential compliance or budgeting issues. By defining and implementing a good SAM plan, you create transparency in your organization and help ensure compliance with licensing requirements.

Your SAM license inventory is an important step in the process. Your inventory tells you exactly what software you have and where it's being used. After you have this information, you must determine whether you are using your software budget in the most efficient way possible.

Learn more about performing a license inventory

To help you optimize and manage your software assets, it's important that you understand the different types of licensing that are available to your organization. In addition, you should learn what types of documents you need to keep, how best to organize your documents, and how your reseller can help.

What is Licensing?

If your company's workstations are networked, you will use a network server, and the workstations on the network will access that server's software to perform certain functions such as file and print sharing. To legally access the server software, a Client Access License or CAL may be required. A CAL is not a software product; rather, it is a license that gives a user the right to access the services of the server.

Due to the technical nature of server products, Client Access Licenses can be complicated.

Learn more about Client Access Licenses now

A software product license grants you the legal right to run or access a software program. In other words, you don't actually own your software; you own the license to use that software.

A license agreement, such as Microsoft Software License Terms (also known as the End User License Agreement, or EULA) governs the use of licensed software. License agreements typically allow the software to run on a limited number of computers and allow copies to be made for backup purposes.

Licensing Documentation

Software comes with its own media or documentation that serves as proof of license. It is important that you retain the appropriate documentation for the software that your organization uses. If you purchase licenses through Microsoft Store, the “Account” page lets you view details for all of your orders and find the product keys for the software you have downloaded. You can also print individual receipts for record-keeping.

Learn more about the Microsoft Store Account page

If you purchase through Microsoft Volume Licensing, you can view a “License Summary” that shows all of your licensed products, and a “Relationship Summary” that provides a comprehensive look at all your Volume Licensing agreements, Licensing IDs, and orders.

Learn more about Volume Licensing documentation

If you purchase Retail (also called Full Packaged Product or FPP), or if you purchase a new computer with software preinstalled, known as the Original Equipment Manufacturer (OEM) option, you should retain the following documentation to prove license ownership.

  • Software License Terms (also known as the End User License Agreement or EULA)

  • Certificate of Authenticity (COA)

  • Original media and manuals (if applicable)

  • Purchase invoice and/or receipt

Note: If you purchase Retail, you should keep documentation for each unit you purchase.

What Are Your Licensing Options?

Microsoft offers several types of licensing programs designed to meet your organization's needs. For smaller organizations that need fewer than five licenses, Retail (also called Full Packaged Product or FPP) is probably the fastest and easiest option for you. If you plan to acquire new PCs, the Original Equipment Manufacturer (OEM) option enables you to purchase software preinstalled on your computers. For larger organizations that need more than five licenses, one of the many Volume licensing programs will suit your needs and save you money at the same time.

Download the complete table of Microsoft licensing options (PDF file, 462 KB) 

What is Volume Licensing?

Volume licensing of software makes it easier and more affordable to run software on multiple computers within an organization. Volume Licensing programs allow you to pay only for the software license and avoid the costs of boxed software (media, user’s guide, and other packaging items). Additionally, by purchasing in volume, you have more customized purchasing options and improved software management for your organization.

Learn more about Volume Licensing

Use the online Microsoft License Advisor