Answer to a question on how Microsoft Office is licensed in a Terminal Services environment and why OEM Office doesn’t cover it, in plain English

Earlier today I received a mail from a Partner stating they found Microsoft licensing to be “confusing and convoluted” in regards to Microsoft Office in a Terminal Services environment. This was posted in response to an earlier Blog post I had: “OEM Office for Terminal Services? You might want to check that EULA...” To be fair, here is an exact quote from the Partner:

“Microsoft's insanely confusing and convoluted licensing programs, and their incredibly unreasonable demands regarding the licensing of some products (especially concerning Office on a Terminal Server)"

The request made by the Partner was, and this again is a direct quote, “to get at least an explanation that could help us to rationalize such stupid licensing requirements to our clients?” In addition, they added, “I am looking for someone who really knows their stuff, not someone who is reading a EULA to me from their screen in their call-center.” As such, I thought I would share the explanation on Office licensing and Terminal Services “in plain English” I sent back to help address this:

1. Microsoft Office is a desktop application. As such, you need (1) Microsoft Office license per desktop using the Microsoft Office software. Terminal Services does not change the number of devices accessing and using a software application, it merely provides another avenue to access the software through. So licensing Microsoft Office doesn't change at all regardless if Terminal Services is used or not. You still need one license per device accessing and using the Microsoft Office application.

2. When someone purchases a commercial software license (Microsoft or not), they are not purchasing the software itself. The software bits and bytes are owned by the software publisher. What you are buying is the rights to use the software under the terms and conditions of the license agreement you purchased. As such, when purchasing software, you should purchase the license that provides you with the rights you want.

a.  For instance, if you want to be able to run Microsoft Access, don't buy a Microsoft Standard license because this does not give you the rights to run Access. Be sure to purchase an Office license that does provide you the rights to run Microsoft Access.

b.  If you want to be able to run Microsoft Publisher, don't buy a Microsoft Standard license because this does not give you the rights to run Publisher. Be sure to purchase an Office license that does provide you the rights to run Microsoft Publisher.

c.  If you want the rights to be able to transfer your Office license from one machine to another one when you retire the original PC, be sure you buy a license that provides those rights. Don't buy an OEM Office license since OEM licenses do not provide transfer rights. Volume Licensing and Retail Box Office licenses do provide transfer rights.

d.  If you want the rights to be able to install a prior version of Office instead of the version you purchased, be sure to purchase an Office license with downgrade rights. Don't purchase an OEM or Retail Box of Office 2007 since those do not have downgrade rights. Purchase a Volume License of Office 2007 since it does have Downgrade Rights.

e. If you want the rights to be able to access and run Office from a network device, be sure to purchase an Office license with Network Storage and Use Rights. Don't purchase an OEM Office license since it does not provide Network Storage and Use rights. Purchase a Volume License of Office so that you have Network Storage and Use Rights.

f. The statement that because you have an OEM Office license, you should be able to use it in a Terminal Services environment is the same as saying you have an Office Standard license so you should be able to run Access. Why? You did not purchase the rights to have Network Storage and Use rights just like you did not pay to have rights to run Access, so why should you be entitled to do so? Simply purchase a license that provides you with what you want.

Why do you think there are different prices for the varying license types? (OEM, Retail Box, and Volume Licensing) It is because you are purchasing more or less rights for the software. In the case of Volume Licensing though, you get more rights than Retail Box; however, the price is lower due to volume and business discounts. I created a short video explaining these differences that you can view HERE

And I can assure you, I am not simply "reading a EULA to me from their screen in their call-center."

Thank you and have a wonderful day,

Eric Ligman
Microsoft US Senior Manager,
Small Business Community Engagement
This posting is provided "AS IS" with no warranties, and confers no rights