A great overview of Microsoft software licenses by contract type and an explanation of the basic concepts

Are you looking for tailored licences for your organisation? Getting lost in the overload of acronyms? Not sure exactly what to make of Microsoft Office 2019 Professional Plus Device Select GOV ? Let's take a look at Microsoft software license labeling together. How do we divide licenses by contract? What do the abbreviations COM, GOV or CAL stand for? You will find the answer in this article. From now on you will be clear about all the terms.

Secondary licences

Let us start by recalling what secondary licences, or so-called free market licences, are. Many of the products mentioned below can be obtained on the open market at a significant saving.

A secondary licence is a type of software licence that the original owner has purchased from the Microsoft distribution network and transferred to a third party. The only difference between a new licence and one from the open market is the price. They are the same product, but you can save up to 80% of the cost if you opt for an open market licence.

Although the licensing arrangements of some software producers may prohibit the transfer of usage rights after the initial marketing of the licence, this is a perfectly legal practice in the European Union (and the EEA), since in these cases the so-called exhaustion of author's right has occurred. Indeed, the fact that new and secondary licences are one and the same is confirmed by the Office for the Protection of Competition (OPC).

How to recognize legal secondary licenses? Read our how-to guide!

Division of licences and definition of terms

Now you know the difference between new and secondary software. However, there are a large number of licenses and they can be divided according to different criteria. Let's first look at the designation of software by purpose.

1. Licences by designation

You may see User or Device in the Microsoft product name (e.g., Microsoft Office 2019 Professional Plus Device Select Plus GOV ). As the name suggests, this is a determination of whether the license is for 1 user (User) or 1 device (Device).

2. Licenses by distribution

On the market, a single software licence is available in several distribution programs. Each of these programmes has its own rules governing whether the software can be used, marketed or resold as used. It is important to note that only perpetual licenses can be transferred as secondary licenses, as with subscription licenses the user does not own the licenses. These licenses define the type of contract, often indicating the amount of discount that customers can receive from a manufacturer-regulated distribution. Similarly, the entities that can enter into each type of contract are regulated.

Retail licence

As the name suggests, retail licenses are designed for end users and small businesses. These licenses usually come packaged with a unique activation key or label and installation media. All retail licences are transferable under European law, subject to the appropriate conditions.

1. ESD license (Electronic Software Delivery) - Offer does not include physical installation media or box. Activation keys are usually assigned to the new owner using a Microsoft account or are available on Microsoft's electronic platform or from the reseller.

2. FPP (Full Packaged Product) USB/DVD license - When you purchase the software, you can choose between the included DVD or USB installation media. The difference from other retail license versions is obvious.

3. FPP license without media - Purchase of a complete package, which should always include a license agreement, registration card, a link to download the software and sometimes a printed manual.

Although they are both transferable and assignable under certain conditions, their appearance on the market among secondary licenses is highly problematic. Why is this so? Read our article where we discuss retail licenses in more detail.

OEM license

So-called OEM licenses are official software licenses created by Microsoft for partners who manufacture or refurbish hardware. These licenses are created using a label CoA (Certificate of Authenticity) , which is attached to specific hardware. The new labels also contain the names or logos of these partners. These types of licences are transferable, but all the conditions set out in European legislation and case law must be met, Currently you can find 3 types of licenses.

OEM (Original Equipment Manufacturer) - Represents a type of software distribution that is usually pre-installed on the equipment and shipped with the hardware to the end customer.
MAR (Microsoft Authorized Refurbisher) - The principle is similar to OEM licenses, except that MAR licenses are for companies that specialize in hardware refurbishment, such as reinstalling, cleaning, and selling older hardware.
Embedded and IoT (Internet of Things) - In short, these are operating systems for specialized devices, e.g. payment terminals, ATMs, etc.

You can read more about OEM licenses and their requirements in our previous article.

Multilicence

Multilicensing is used primarily by large companies for which it would be very administratively challenging to purchase large amounts of software other than in a single contract and then distribute them across devices in the organization. For medium and large companies it is therefore more advantageous to purchase multilicenses.

What is an on-premise license?

It is a license that is installed and used locally. This means that in order to use the software, the user must install it on their own server or computer - the software can then only be accessed and used through that server or device.

OVL (Open Value License) - It is intended for commercial, public or academic institutions. This program is typically designed for a number of users or devices ranging from 5 to 250.
CSP (Cloud Solution Provider) - Took over the role of OLP (which was abolished in 2022). Targets smaller and medium-sized organizations. The CSP program offers a full portfolio of licenses, both on-premise licenses and cloud services.
Select (Select Plus) - This program is for companies with more than 250 users and allows you to purchase cloud services.
MPSA - Like Select Plus, this program is designed for companies with more than 250 users, and the product portfolio is identical to Select Plus. However, in the MPSA program, multiple types of organizations can be managed within a single transactional agreement using purchasing accounts. Here, Microsoft sets the price level according to the type and size of the organisation. They are managed in the Microsoft Business Center portal.
EA (Enterprise Agreement) - This program from Microsoft is aimed at organizations that have more than 500 users in their work environment in the commercial realm or more than 250 users in the case of government purchases. Unlike Select Plus or MPSA, EA can only be purchased including SA. To obtain the program, you must register a contract through LSP Partners and the contract must be for a minimum of three consecutive years.

The biggest advantage of licenses from multi-licensing contracts is their purchase, the actual administration of large quantities of purchased licenses, easy installation and subsequent administration. How to choose and where to manage multilicense programs? Do you want to purchase multilicenses in a cost-effective way? Read the article here.

Licences by user group

There are 4 headings - GOV, ACDMC, CHRTY and COM. Like the abbreviations above, these are based on English nomenclature. They indicate the amount of the discount for a given sector.

GOV (Government) = public administration
COM (Commerce) = private sphere
CHRT (Charity) = charity
ACDMC (Academic) = license for academic purposes

You now have a basic overview of software licence marking. Do you still need help choosing the right license for your needs? Do you want to save up to 80% of the costs like other organisations?