Microsoft Licenses: Understand the Available Options And Their Differences

Paying attention and appropriately choosing one of the Microsoft license types is essential for a company to avoid disruptions and have stability in its operations. If it is not licensed, the software may become unstable and cause performance problems, such as stopping its operation.

On the other hand, licensed software brings security to the organization, as it is subjected to security certifications, audits and efficiency tests. Licensing is also essential for companies to avoid the risk of fines and the fear of inspection, as well as ensuring lower maintenance costs.

Especially for organizations that use products offered by Microsoft, such as the Windows system, it is necessary to identify the best licensing model to be contracted.

In this article, you will find:

  • Microsoft licenses and their differences;
  • Volume licensing;
  • Licensing for small and medium-sized companies;
  • Licensing for large corporations;
  • What are the reasons for having licensed software;
  • What are the benefits of purchasing Microsoft licenses;
  • How to choose one of the Microsoft license types;
  • Free trial of Microsoft products ;
  • Budget for Microsoft licenses.

What are Microsoft’s main licenses?

Microsoft licenses can be divided into several groups, such as: Basic, Standard and Premium. Furthermore, it is important to analyze which license and which tool you intend to have in your business, which could be for Microsoft 365, Teams, Windows 11 or other platforms offered by Noventiq.

Microsoft licenses and their differences

To better choose a Microsoft license, it is necessary to initially analyze whether there is a search for cloud solutions.

Options for perpetual licenses, with the right to benefit for the rest of your life, or subscription licenses, in which membership is made like a rental, should also be considered. A third factor to be observed is the possibility of transacting the number of licenses during the contract period.

To serve customers with different profiles, Microsoft offers different possibilities for purchasing software. Each license model is tailored to an organizational structure, providing a wide range of options.

1. CSP (Cloud Solution Provider)

As one of Microsoft’s most modern licensing models, CSP is designed to meet the growth of cloud solutions. In this model, the customer purchases cloud licenses with the possibility of monthly payment and fluctuation in the number of licenses each month.

According to need, whoever acquires CSP may increase or reduce the number of licenses offered during the contract period.

In CSP, the software distributor assumes responsibility for the lifecycle of the customer’s Online Services, ranging from provisioning to direct billing, support and management. Furthermore, it has the ability to integrate its own services, increasing the resources offered.

An advantage of this type of licensing is that it generates a predictable cost, so you can include it in your fixed expenses and have greater control over payment, which can even be made by bank slip.

Another benefit is loyalty-free membership. As there is no penalty, you can have a single contract for all Microsoft Cloud solutions you purchase. 

2. OEM (Original Equipment Manufacturer)

Newly purchased computers with pre-installed software, such as Windows, have an OEM license. In this case, the software is an integral part of the machine.

In the OEM model, the software license is restricted to the computer on which it was installed. This means that the license cannot be transferred to another computer, thus forcing the holder to purchase another license if they change equipment.

Generally, software with an OEM license is not intended for direct sale to the end consumer. They are made, or adapted, preferably for car manufacturers.

Basically, OEM is a term used when a developer makes a subsystem, component or part of a product or program from another organization.

Notebook and computer manufacturers, such as Dell, Sony, Philips and many others, use OEM licensed software in their products. These licenses, sold directly to manufacturers, allow software to be pre-installed on computers without the consumer having to purchase a separate license.

The prices of these programs tend to be different due to the large volume of purchases that automakers make for their products.

It is worth noting that OEM software can be purchased through authorized Microsoft distributors. 

3. FPP (Full Packaged Product)

Also known as “box licensing”, FPP is a method of selling software that involves purchasing products in complete packages, usually in physical boxes, that include all necessary components such as CDs, DVDs, manuals and license keys . Currently, this model no longer has a large following, as Microsoft presents downloadable solutions.

In FPP, installation of this software is only allowed on one machine. Therefore, FPP is more suitable for small businesses, which use up to four computers.

From five machines onwards, organizations find more advantages in resorting to volume licensing, as it allows installation on a greater number of computers at more affordable prices.

Furthermore, this type of licensing does not allow the use of previous versions of the purchased program.

Typically, FPP has the highest cost among Microsoft licensing types. However, it can be obtained in any quantity, with no minimum licensing or purchase restrictions. 

4. ESD (Eletronic Software Delivery)

In an alternative that offers more practicality to the home user, Microsoft offers the ESD as a model to replace the FPP and avoid the need to purchase the box. To this end, this licensing, with characteristics similar to the Full Packaged Product, is offered via download.

This type of licensing brings some advantages, such as agility, ease and flexibility in purchasing the product with your license, which can be done at any time and place simply by having access to the web. There is also the practicality of not having to store physical media, which can scratch, break, disappear, etc.

It is worth highlighting that the lack of physical media reduces expenses with logistics, inventory and the media production material itself. This helps reduce the price of the software and also helps the environment.

5. GGK (Get Genuine Kit)

This type of physical license consists of installation media, documentation and an authenticity label. It is intended for installation on computers that have already been notified of some irregularity in relation to piracy and require adjustment.

Volume licensing

Volume licensing is recommended for small and medium-sized businesses that need more than five licenses or more than one type of software. This format has cost advantages.

The organization only pays for the software license, while the FPP licensing model includes media, a user guide, and other items that come in packages.

Authorized distributors deliver more customized purchasing options, in addition to optimized software management.

In some cases of Volume Licensing programs, it is possible to purchase Software Assurance, a comprehensive maintenance option can help you maximize your software investment.

It integrates the program with partner services, IT tools, telephone support, among other advantages.

You can opt for Software Assurance at the time of purchase, which allows you to enjoy its benefits immediately and for the duration of the licensing agreement.

Depending on the software and volume licensing chosen, there is the possibility of receiving media, such as complementary media, as well as product support and documentation separately. 

Licensing for small and medium-sized companies

For small and medium businesses, Microsoft offers three programs: Open License, Open Value and Open Value Subscription. When defining which one to use, the supplier itself indicates that the following criteria be evaluated: the size and type of the organization, the products that will be licensed and how these products will be used.

Among these programs, there are alternatives that include the purchase or rental of licenses, in addition to the possibility of contracting a support plan called Software Assurance. 

Open License

Considered an entry-level program, Open License is recommended by Microsoft for small, pay-as-you-go organizations.

The acquisition of the right to perpetual use of the software at a significant discount is made through a single payment.

It is worth noting that the acquisition of perpetual use gives you the right to benefit from the software for the rest of your life. However, there is the disadvantage of not offering updates and maintenance support.

If you want to ensure a maintenance and support offer, the customer can use Software Assurance, which provides the right to all software updates during the validity period of the Open License contract. This alternative also provides telephone support, partner services, training and IT tools. 

Open Value

In the Open Value program, Software Assurance is already included, with technical support and training. Updates can be made at any time, without the need for new contracts.

The Open Value license is ideal for companies that want to customize their platform and standardize their IT infrastructure. It is also recommended for those who aim to maximize their investments with Software Assurance.

One advantage is that you can update your program at any time after updates become available. All this without needing to monitor versions, buy software or sign new contracts. 

Open Value Subscription

Microsoft recommends Open Value Subscription for those looking for the possibility of increasing or reducing the number of licenses annually, which can be important to keep up with the company’s demand.

If the number of employees changes, the organization may adjust the volume of licenses on the contract anniversary. In this model, the standardization of the technology park of the company that will use it is required.

Unlike the Open License and Open Value models, licenses are not perpetual in the Open Value Subscription program. In this version, the software is not purchased, but the license is subscribed or rented. 

Licensing for large corporations

To meet the demands of companies with 250 or more employees, Microsoft offers licenses aimed at large corporations. As of July 2016, one of these programs, called Select Plus, has been discontinued.

From that date on, Microsoft stopped receiving orders and renewing software insurance contracted with this program. 


As a replacement for Select Plus, Microsoft recommends the Microsoft Products and Services Agreement (MPSA). Also offered for 180 or more computers, this program has online services, which influence the price to be paid by the customer.

There is no need for an initial purchase commitment to join the MPSA. This payment can be made in one lump sum, annually or in short installments. This is a transactional model, with an annual purchase commitment based on points.

MPSA is touted by Microsoft as “ the easiest way to acquire all cloud services and software” . Through it, the company can choose to deploy in the cloud or create a hybrid environment.

Acquisition can be done by different organizational structures, with divisions within the company or by departments. 

2. Enterprise Agreement

An alternative for companies with more than 500 users or desktops, the Enterprise Agreement is intended for organizations that wish to standardize the computers in their corporate environment with one or more specific Microsoft products, paying a special price for this acquisition.

This is a manageable volume licensing program that allows you the flexibility to purchase cloud services and software licenses under a single contract.

It is important to mention that the Enterprise Agreement allows your company to subscribe to software licenses instead of purchasing them.

It is worth noting that Microsoft Azure through the Enterprise Agreement also allows consumers access to the Enterprise Portal, an advantageous resource for those who manage multiple subscriptions or accounts. 

3. Government Open License Program

Microsoft offers volume licensing programs for small, medium, and large government agencies at special pricing. There are both Open License, Open Value and Open Value Subscription alternatives as well as Enterprise Agreement and MPSA alternatives.

Volume licensing eligibility requirements for government organizations vary by region.

According to Microsoft criteria, “governmental organization” is defined as “any federal state or municipal agency, department, or entity so characterized by statute.” 

4. Academic Licensing – Education Enterprise Subscription

Among the licensing options offered, Microsoft offers some for educational institutions. The alternatives include two types of programs: subscription and perpetual.

In subscription licensing, the academic institution has the right to use the licensed products during the license period, as well as updates.

In the perpetual program, software licenses are acquired so that there are rights to the software even after the end of the licensing period. 

5. Licensing for healthcare organizations

Among the volume licensing options, Microsoft also includes healthcare organizations, which are divided between private, government and academic institutions (health systems and laboratories exclusively owned and operated by users who meet the requirements established by Microsoft itself). 

6. Programs for NGOs

Through volume licensing, Non-Governmental Organizations can purchase multiple software licenses at reduced prices instead of purchasing many software packages.

In this case, the organization only purchases a complete software package and sufficient licenses to cover all other machines it owns. To do this, the institution must be registered with this characteristic and comply with Microsoft standards.

What are the reasons for a company to have properly licensed Microsoft software?

There are many reasons for a company to have properly licensed Microsoft software, especially if it wants to make the most of all the benefits and features that its programs deliver. Here are some reasons why you should only purchase licensed programs, check them out:

  • Quality technical support:  licensed software allows you to request help from the program’s support, making it easier to resolve problems and queries, as well as obtain tips on how it works;
  • Preventing inspection problems: if your company is caught with pirated software during an inspection, you may have to pay high fines;
  • Constant updates:  licensed programs are updated periodically, which helps correct flaws and increases information security. This also makes it possible to include technological innovations and resources that improve software performance;
  • Digital security:  many pages used to download pirated software can practice phishing, a technique for capturing personal data. It uses pages and other devices that simulate content to deceive and induce users to install malicious programs;
  • Better performance:  licensed software has fewer bugs and inconsistencies, so it delivers greater performance. On the other hand, pirated programs often contain devices that make them slower, full of glitches and unstable;
  • Flexible costs:  the company can choose the license that has the best cost-benefit for its operation, that is, the one that best meets its needs and requirements. This is possible thanks to the great diversity of licensing that Microsoft offers;
  • Time saving:  pirated programs take time to download, but they don’t always work, which causes you to lose precious hours of work. Licensed ones can be downloaded and installed quickly, allowing you to contact support in case of unforeseen circumstances.

What are the benefits of purchasing software licenses?

There are several benefits to acquiring software licenses, many of which even help the company to have a greater competitive advantage:

  1. Consistent software:  Licensed programs are more consistent and better preserve business data against cyber attacks. The lack of digital security is greater in pirated software, which can harbor malware that steals data or causes damage to corporate systems;
  2. Scalability: some licenses facilitate scalability if you increase the number of corporate computers that contain Microsoft software;
  3. Guarantee: licensed programs have a guarantee, that is, extra protection if they do not work on your equipment;
  4. Accessibility: software licensed in the cloud facilitates access to company data from any location in the world at any time, which can be done by different employees depending on their permissions.

How to choose one of the Microsoft license types?

To choose the type of Microsoft license that is most advantageous for your company, it is important to evaluate the following aspects:

  • Size or size of the organization:  the larger your company, the more advantageous volume licensing becomes, as it has lower costs. Licensing of programs in the cloud is also attractive, as they facilitate access and maintenance of data;
  • Professionals who will use the software : depending on the complexity and functions performed, you will need to license more or fewer programs. If only one employee is going to use a certain software, then FPP or ESD licenses are recommended. If more people use it, it is recommended to purchase one of the licenses for small and medium-sized companies;
  • Payment method : check the payment method that is most aligned with the way your finance department operates and that is most advantageous for your company.

Discover more about Microsoft licenses

Regardless of the size of the organization and its characteristics, the use of software should only be done after obtaining licenses for use. A company will face risks when using pirated programs.

Using original software may seem more expensive initially, but it will guarantee the level of productivity in the medium and long term, without the threat of instability.

Licensing ensures that the company operates through legal means and avoids the possibility of penalties. And, as the saying goes, what’s cheap is expensive. Careful!


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