Learn about the ISV Royalty Program:
Market Segment
The ISV Royalty Licensing Program offers all solutions-partner segments—including ISVs—a convenient way to license Microsoft products, integrate them into a software business application with a Microsoft ISV Royalty License and Distribution Agreement, and then replicate the business solution and distribute a fully licensed solution to their end users. As an ISV, you can integrate Microsoft licensed products into your business solution by including one or more Microsoft licensed product along with the software for your unified solution and distributing the solution by either:
- Copying it onto physical media, which is labeled and packaged as your unified solution.
- Preinstalling it on a computer system for distribution as part of your unified solution.
Program Requirements
To enroll in the ISV Royalty Licensing Program, your organization must meet the following eligibility requirements:
- Develop a unified solution. Develop a value-added unified solution that uses Microsoft licensed products and distribute the unified solution in a tangible medium.
- Provide technical support. You are responsible for providing technical product support to your end users for the Microsoft licensed products included in the unified solution. You must either acquire five technical product support incidents from Microsoft or from a Microsoft Gold Certified Partner, or you must enroll in the Microsoft Partner Program as a Certified Partner or Gold Certified Partner.
- Commit to royalty revenue. If you have a direct agreement with Microsoft, you must commit to pay a minimum US$15,000 in royalties through the ISV Royalty Licensing Program over the three-year term of your agreement. (See the Agreement Term section for important information about revenue commitments.)
- Comply with the Microsoft license terms. Incorporate any applicable Microsoft license terms into the end user agreement for the unified solution.
- Designate a licensed products distributor (where available). Work with an authorized ISV Royalty Licensing Program distributor to complete the ISV Royalty License and Distribution Agreement.
- Sign agreements. Complete the ISV Royalty License and Distribution Agreement, Microsoft Business and Services Agreement/Microsoft Business Agreement (MBSA/MBA), and credit application form (credit form required for direct agreements only). To obtain these documents, send an e-mail to the ISV Royalty Licensing Program team. If you have an agreement through a distributor (known as an indirect agreement), contact your distributor. If you have an MBSA/MBA through another Volume Licensing program agreement, you should work with your distributor to link the MBSA/MBA to your ISV Royalty License and Distribution Agreement. If you do not have an MBSA/MBA, you will be required to sign one the next time you sign an ISV Royalty License and Distribution Agreement. Submit these documents to your Microsoft Regional Operations Center (if you have a direct agreement) or distributor (if you have an indirect agreement).
After you have enrolled, the following are the key steps for participating in the ISV Royalty Licensing Program:
- Obtain master copies of Microsoft licensed products through Microsoft Worldwide Fulfillment (if you have a direct agreement) or through your distributor (if you have an indirect agreement).
- Integrate the Microsoft licensed products into your software application to create a unified solution.
- Ensure that the required Microsoft license terms are provided to and agreed upon by your end users.
- Sell and report on licenses for the unified solution distributed to your end users.
- Abide by copyright, trademark, and antipiracy obligations. You and your affiliates must abide by the requirements for preventing the piracy of Microsoft licensed products and must comply with trademark and logo use requirements, pass-through copyright, and similar notices.
- Report monthly on software licenses. Submit a monthly royalty report or a zero-use report for all licenses that you and your affiliates distributed to your end users. If an end user generated more than US$1,000 per month in revenue, you must include that end user’s name and address.
- Agree to participate in ISV Royalty Licensing Program audits. Microsoft, its designees, or both may review your records and facilities (including data centers) to verify compliance and may conduct on-location audits if needed. Microsoft may conduct this review for up to two years after the agreement ends.
- Comply with export requirements. You must comply with all applicable export laws and it is recommended that you obtain legal advice regarding the export laws applicable to your business. For informational purposes only, Microsoft has collected information on export requirements and other information, including United States export regulations, product Export Control Classification Numbers (ECCNs), and export-restricted products.
Products Included
Download the most recent
ISV Royalty Product List (updated quarterly) to see the wide selection of Microsoft products available for the ISV Royalty Licensing Program (does not include desktop operating systems, server operating systems, and online services).
Online Services
Microsoft Online Services are not offered through the ISV Royalty Licensing Program.
Software Maintenance Options
You can provide the option for your end users to upgrade to future product versions by acquiring embedded maintenance for a fee. Only new product versions released during the embedded maintenance coverage period are included. Licenses must be enrolled in embedded maintenance during the same month the license is originally acquired. Coverage can be renewed annually during the agreement term.
The ISV Royalty Licensing Program allows you to offer embedded maintenance to your end users for the unified solution. You are not allowed to offer embedded maintenance to your end users for only the Microsoft licensed product.
Your end users with licenses enrolled in embedded maintenance can obtain the upgrade software through you. You supply the Microsoft upgrade license to your end users as part of an upgrade to the unified solution. End users with licenses not enrolled in embedded maintenance who want to upgrade are required to acquire a new license.
License Type
The ISV Royalty Licensing Program offers perpetual licenses, which are everlasting and valid if the licensed product is being used in accordance with the license-agreement requirements. The ISV Royalty Licensing Program allows you to include Microsoft licensed products as part of your unified solution. Microsoft licenses the products to you, not the end user. You become the legal licensor of the entire unified solution, including the Microsoft licensed products that are part of your unified solution.
Licensing Offerings
Each Microsoft licensed product offered through the ISV Royalty Licensing Program has an associated set of use rights. The two types of use rights offered are:
- ISV license. This default license type enables you to integrate Microsoft licensed products and for them to be licensed as part of your unified solution. This license also allows your end users to use the underlying Microsoft licensed products with other applications, as long as the Microsoft licensed products are still licensed for your application.
- ISV run-time license. Some licensed products offered through the ISV Royalty Licensing Program are offered with additional restricted-use rights. In these cases, your end users:
- Can use these applications only with the unified solution with which they were acquired.
- Cannot use the Microsoft licensed products to run any other applications, to develop new applications, or in any other context independent of the unified solution with which the licenses were acquired.
The products that are currently offered with run-time use rights are Microsoft SQL Server, Microsoft BizTalk Server, and Microsoft Office Communications Server.
Monthly reporting and payment of perpetual licenses are based on actual use from the previous month.
All Microsoft server licensed products offered in the ISV Royalty Licensing Program are licensed in the server/client mode or in the processor mode. All Microsoft desktop PC and client products offered through the ISV Royalty Licensing program are licensed per device. For more information about the licensing model for a particular product, refer to the Microsoft license terms. Microsoft license terms are a set of rules that define how a particular Microsoft licensed product must be installed and used by your end users. Each Microsoft licensed product has unique license terms associated with it. You must incorporate the appropriate license terms for the specific Microsoft licensed products that you have included in your unified solution into the end user agreement for your own product. You can access electronic copies of the Microsoft license terms for the licensed products through
explore.ms (if you have a direct agreement) or request them from your
distributor (if you have an indirect agreement).
Licensing Fulfillment
The ISV Royalty Licensing Program does not include media kits. You can acquire media separately, for a fee. If you have a direct agreement with Microsoft, you can order media through the
Microsoft Order Entry Tool (MOET), which is the standard Web-based order-entry tool for the ISV Royalty Licensing Program (select New PO > Volume Licensing Purchase Order > Online). The list of media stock-keeping unit (SKU) numbers can be found in the price list. If you have an indirect agreement, you can order media from your distributor. Microsoft may change the process for ordering master copies of licensed products and software documentation from time to time with at least 30 days’ notice.
Pricing
To find out the price you are charged for each Microsoft licensed product offered through the ISV Royalty Licensing Program, refer to the price list on explore.ms (if you have a direct agreement) or contact your distributor (if you have an indirect agreement).
Payment Options
You must submit consolidated monthly royalty reports or zero-royalty reports to Microsoft (if you have a direct agreement) or to your distributor (if you have an indirect agreement), whether or not any royalties were incurred during the preceding month.
An authorized representative of your organization must certify that the monthly royalty report or zero-royalty report is accurate and complete. If you do not submit a report by the due date each month, then your organization is not compliant with the agreement. The information contained in the monthly royalty report is used to invoice you, in the applicable currency, for the royalties you owe.
- Monthly royalty reporting. The monthly royalty report must include the total number of licenses required for each licensed product that you licensed during the preceding calendar month and the countries in which your end users are located. If an end user generated more than US$1,000 per month in revenue, you must include its name and address. You are not required to include end user demonstrations, end user evaluations, your organization’s evaluation and testing of licensed products, or server administration and maintenance in your monthly royalty reports.
- Zero-royalty reporting. If your organization and its affiliates did not distribute any licensed products to your end users during the previous calendar month, you must submit a zero-royalty report.
Royalties are due for embedded maintenance at the time the license is enrolled. Embedded maintenance coverage (both new and renewing) is reported to Microsoft on the monthly royalty report along with all other license redistributions. Licenses can be enrolled in embedded maintenance only when your end user:
- Acquires the unified solution or an upgrade to the unified solution.
- Renews upgrade coverage that it previously acquired for the unified solution.
How to Distribute
After Microsoft approves the ISV Royalty License and Distribution Agreement, you can begin distributing Microsoft licensed products as outlined in the agreement.
- The ISV Royalty Licensing Program allows you to distribute Microsoft licensed products as part of a unified solution, not as stand-alone products.
- You are not allowed to lease or rent Microsoft licensed products without a separate agreement with Microsoft.
- Integration of a Microsoft licensed product with your unified solution must include the entire product, not just a portion of the product. Based on the functionality of your unified solution, certain features might not be used (for example, development tools), but the entire Microsoft licensed product must be integrated.
- Although you are allowed to create technically accurate documentation for the unified solution based on the information contained in the help files, the help files contained in the Microsoft licensed product may not be modified. This is to ensure that end users receive the complete Microsoft software package and a consistent end user experience, no matter where or from whom they acquire the software.
- Microsoft does not allow any features to be disabled, so that end users receive fully functional licensed products. In addition, disabling certain features might affect other parts of a licensed product that would be detrimental to it. However, you may configure licensed products in accordance with their software documentation.
If you would like to provide your unified solution as software services, you must sign a
Microsoft Services Provider License Agreement.
The ISV Royalty Licensing Program allows for worldwide distribution of the unified solution, subject to the United States export laws and subject to certain agreement provisions. Because Microsoft does not control to whom you distribute the unified solution, you are required to have agreements with all third-party business entities to whom you directly provide the unified solution for direct or indirect distribution (and not for sublicense) to end users.
Order and License Tracking
After Microsoft has received your ISV Royalty License and Distribution Agreement and credit application, you will receive a welcome letter that contains an agreement number.
Some Microsoft licensed products require
volume license keys to complete installation. Volume license keys are assigned to a company or organization and must be used for desktop PC or administrator installations of licensed products. To obtain an ISV volume license key and for a list of products that require volume license keys, see
explore.ms (if you have a direct agreement) or contact your distributor (if you have an indirect agreement).
Agreement Term
The ISV Royalty Licensing Program offers a three-year agreement term.
If you have a direct agreement with Microsoft, the minimum commitment is US$15,000 during the initial three-year term of the agreement. If you terminate the agreement less than 12 months after the effective date, the minimum commitment is US$5,000. If you terminate the agreement between 12 and 24 months after the effective date, the minimum commitment is US$10,000. Each Microsoft licensed product has a price per license assigned to it. The minimum commitment is calculated by multiplying the total number of units that you have sold of your unified solution by the price of the Microsoft licensed products that are included in it.
If you have an indirect agreement through a distributor, you are not required by Microsoft to meet a minimum royalty commitment.
Agreement Renewal Options
The ISV Royalty License and Distribution Agreement is nonrenewable. At the end of your three-year agreement term, you must sign a new ISV Royalty License and Distribution Agreement to continue to participate in the program.
