Microsoft Director of Business & Sales Operations - Eric Ligman

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Be sure the customer’s name is on the agreement – Microsoft Open License Basics

To set the stage for this post, let’s start with the absolute basics of licensing.  In order to legally install and use a piece of commercial software onto a computer, what do you need to have?  Anyone?  That’s right, a license to run the software.  I know, this sounds very basic, but I’ll show you why this is an important piece of information further down in this post.

If you read my Microsoft Open License Basics – 5 license minimum applies only on initial order post, you saw that when a company makes an initial purchase through the Open License program, they receive an Open License Authorization number and each licensing order under that agreement gets an individual License number.  Those individual License numbers under the Authorization number contain the product licenses themselves.  For instance, in the example below, we have a sample company that has three separate Authorization numbers.  Under those Authorization numbers, they have several different License numbers and those License numbers contain various different product licenses.


Hierarchy of Open License (Click image to left to view full size)

  • A Company can have one or multiple Open License Authorization Numbers.
  • One Open License Authorization Number can have one or multiple License Numbers on it.
  • One License Number under an Authorization Number can have one or more Product licenses on it.

Here is where that first, basic information, paragraph comes into play and why it is so important to understand the basics.  Each Authorization Number has a company name on it.  This company name is the company that is licensed by the Authorization number and all subsequent License numbers associated with it.  So if a company wanted ten (10) Microsoft Office licenses for their ten (10) computers, they would acquire them through an Open License Authorization number that has their company name on it.  By doing so, the company now has the legal right to install and use Microsoft Office (whatever version they acquired licenses for) on ten (10) of their computers.

Let’s take this a step further with another example and what should be a relatively easy question:


– Click image for full size

Scenario to the left:

  • Company A owns ten (10) Microsoft Office licenses through the Open License program
  • Company B has 6 computers that they want to run Microsoft Office on


  • Can Company B install/use Microsoft Office on their computers because Company A owns Microsoft Office licenses?

Ok, this should be an obvious answer…  No, Company B has no rights to install or use Microsoft Office on their computers.  Why?  Go back to the basic information included in paragraph one.  To legally install and use a piece of commercial software onto a computer, you need to own a license to run the software.  How many Microsoft Office licenses does Company B own in the example above?  None.  So how many computers can they install/use Microsoft Office on?  That’s right, none.  No licenses?  No rights to install or use.

Now, many of you may be thinking, “Ok, that’s a total no-brainer.  What’s the point?”  Well, while it is a complete no-brainer, I will sometimes be asked the following question (which is really just the scenario above re-phrased): As a reseller, can I order the licenses for my clients under my company name through Open License and then use those licenses to install at their company?  Let’s look at this scenario graphically to make it really easy to understand:


– Click image for full size

Scenario to the left:

  • Reseller A acquires three (3) Open License Authorization numbers under Reseller A company name (Reseller A is company name on Authorization Numbers), each with varying number of Microsoft Office licenses on them
  • Three companies that Reseller A does business with: Company A with six (6) computers, Company B with ten (10) computers, and Company C with five (5) computers

Question: How many licenses of Microsoft Office does Company A own?  How about Company B?  Company C?  Answer is: None.  Just like in the first example above, the licenses in this example are owned by Reseller A since the Authorization Number has their company name on it.  Since Companies A, B, and C do not own any Microsoft Office licenses, how many computers can they have Microsoft Office installed on?  None.  Again, by just looking at the simple basics of licensing, it is really a no-brainer.  If the company does not own any Microsoft Office licenses, they can not install or use the software. 

If you are a reseller, when placing orders for Volume Licenses for your clients through a Microsoft Authorized Distributor, be sure to supply the Distributor with the correct customer information for the agreement (company name, address, contact email, etc.) and then also submit your information as the reseller (Company name, address, contact email, etc.), not as the customer for the agreement.  This way when the Authorization number is created, it lists the correct company on the Authorization number and they own the licenses they are looking to acquire and can install and use the software on the computers in their company.

If you are a business that places an order for an Open License Agreement and find that the company placing the order for your Open License Agreement has placed the licenses under their company name instead of yours, request that they return the agreement and reprocess it under your Company name to ensure you own your licenses.  If you are a reseller and find you need to transfer an Open License Agreement to your client because you may have made the mistake mentioned above, then you should check out my, “How to transfer ownership of an Open License Agreement – Microsoft Open License Basics,” post which tells you how to accomplish this.

If you found this post helpful, you may want to view other posts in my Microsoft Open License Basics series.

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Thank you and have a wonderful day,

Eric LigmanFollow me on TWITTER clip_image001and RSS clip_image002
Global Partner Experience Lead
Microsoft Worldwide Partner Group
This posting is provided "AS IS" with no warranties, and confers no rights

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