Licensing 101

A software product license grants you the legal right to run a software program. When you purchase licenses for retail software products, the software license is included either in the box or online when you install the software.

There are three basic steps required to purchase a software license after you have determined which software program(s) you need:

Determine the license you need.

Decide the best purchase or leasing option.

Determine where you should purchase.

Determining the License You Need

A software product license can be broken into three main elements: product pool, product, and edition. For example, the product pool for Microsoft® Office XP Professional falls under "applications."

Product Pool. Microsoft software programs fall under one of the following three product pools:

	Applications. Microsoft application software programs are used to perform functions such as word processing and spreadsheet and presentation creation. Examples of Microsoft applications include Microsoft Office, Microsoft Visio®, and Microsoft Project. Developer tools and utilities, such as Microsoft Visual Studio® are also part of the Microsoft applications pool.
	Systems. Microsoft desktop operating system software programs such as Microsoft Windows® XP Professional operating system control a computer and make it possible for users to enter and run applications.
	Servers. Microsoft server software programs provide a variety of functions such as database storage, e-mail, messaging, and event monitoring for workers who are part of a larger network or business unit who need to share information. Examples of servers include Microsoft Exchange 2000 Server, Microsoft SQL Server™ 2000, and Windows 2000 Server.

Product. The software itself. For example, Microsoft Office, Visual Studio, Windows 2000, or SQL Server.

Edition. Specifies the features included in a product.

Deciding the Best Purchase Option and Determining Where To Purchase

Original Equipment Manufacturer (OEM)

You may license products through an Original Equipment Manufacturer. These are products (e.g., Windows 2000 Professional operating system) that come installed when you purchase a new computer.

Full Packaged Product (FPP)—Retail

Physical, shrink-wrapped boxes of product that can be purchased in a local retail store or any local software retailer.

Volume Licensing for Organizations

You may enjoy significant savings by acquiring multiple product licenses. Depending on the size and type of your organization, you have the following volume licensing options:

Open License 6.0. Designed for organizations purchasing as few as five licenses.

Select License 6.0. Designed for organizations that have 250 or more desktops and are able to forecast software acquisitions over a three-year period.

Enterprise Agreement 6.0. The best choice for organizations that have 250 or more desktops and that are looking to standardize their enterprise on Microsoft Platform Enterprise Products (Office Professional, Windows Professional upgrade and Core Client Access License) at discounted prices based on a three-year agreement term.

Enterprise Subscription Agreement 6.0. The program for corporate customers with 250 or more desktops who prefer to lease—rather than purchase—Microsoft software licenses. Enterprise Subscription Agreement 6.0 allows your organization to standardize on Microsoft Platform Enterprise Products at discounted prices based on a three-year agreement term.

Academic Volume Licensing. If your organization is an academic institution, you may qualify for one of the Microsoft academic licensing programs.

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