The Trouble with Office 365 Licensing

17 Mar 2016 | SAM/SLO

What are the issues with Office 365 licensing?

More and more Microsoft customers are moving from a device-based Office license to a user-based one via Office 365. This gives the organization a number of benefits but also some challenges in relation to the use and maintenance of the software.

The Office portion of Office 365 is installed on a computer on-premises in the same way as traditional Office Professional Plus is installed. The following section (taken from the Microsoft Volume Licensing Brief: “Licensing Microsoft Office 365 ProPlus Subscription Service in Volume Licensing”), provides a good explanation of the difference between the two licensing models:

“Office 365 ProPlus is a subscription service offering under the online services licensing model. It is licensed on a “per user” basis. Each Office 365 ProPlus User Subscription License (User SL) must be assigned to a single named user (Licensed User) before using the software. This differs from traditional Office installations (such as Office 2016) which are tied to Licensed Devices. The Office 365 ProPlus license allows Licensed Users to access Office experiences on PCs or Macs and on their mobile devices. The Licensed User may activate the software for local or remote use on up to five concurrent operating system environments (OSEs). Office 365 ProPlus licensing treats physical and virtual OSEs the same, so the five concurrent activations may be on five different devices or multiple OSEs on one device. These devices may include company managed device and employee personal devices. The Licensed User may also use the software activated by another user under a different User SL.”

Right to Use Office Professional Plus 2013 has been Revoked

When Office 365 was first released in its 2013 guise it was not supported on either a network server deployment e.g. Citrix, Terminal Services or Remote Desktop Services. Customers that needed to run Office 365 in a network server environment were allowed to deploy Office Professional Plus 2013.

With the 2016 version of Office 365 use within a network server environment is supported.  However, this means that the right to use Office Professional Plus 2013 has been revoked and customers must now use Office 365 (2016) within this environment. Customers had until 31st March 2016 to make this change as outlined in the Volume Licensing Brief below.

“What about customers who have previously applied the Media Eligibility right with Remote Desktop Services (RDS) for Office 365 Pro Plus, Visio Pro for Office 365, and Project Pro for Office 365?

“If a customer has previously installed a copy of the corresponding 2013 on-premises software on a network server in order to use the software on a network server with RDS role enabled, they may continue to do so until no later than March 31, 2016, at which point they must instead use the corresponding Office 365 software.”

Upgrade Rights for Office 365

One of the main attractions of an Enterprise Agreement for organizations was the “New Version Rights”. This allows customers to upgrade to the latest version of the product during the period of the agreement. In our experience many organizations failed to take advantage of this right, particularly for Microsoft Office for a number of reasons:

  • Compatibility issues – Many of their line of business applications had integration into Microsoft Office.  The new version of Microsoft Office may not be compatible with these applications and may also require additional development or a product upgrade.
  • Training issues – It is important that end users are comfortable with the use and functionality of the new product.  Staff often need to be trained or at least offered online training.
  • Logistics – To upgrade 10 copies of Office is fairly straight forward. For 40,000 or even 100,000 computers it isn’t.
  • Functionality – Does the new version of Office provide us with enough additional functionality to justify the upgrade?  If it doesn’t why bother.
  • Cost – Particularly in outsourced environments the cost of delivering an Office upgrade, testing backwards compatibility and integration with their existing applications can cost as much if not more than the cost of the software.

No Downgrade Rights 

Customers wishing to move to Office 365 should take note of the following from the Volume Licensing Brief:

“Online Services downgrade rights

In Online Services customers have access to the latest technology with the newest features and releases. As with all Subscription Services, Microsoft generally offers only the latest version of the service at a time. Therefore, downgrade rights are not available with Office 365 ProPlus licenses.”

The lack of downgrade rights now forces the customer to move to the latest version whether they want to or not.

If your business is thinking of moving to Office 365 we recommend that you consider the following before you make the change:

  • Negotiate a transition period into your license agreement, 12-24 months, to  allow the organization to transition from the per-device licensed Office to user-based Office 365
  • Negotiate an addendum to your license agreement to allow you to revert back to the Device Based Office Licensing model should the requirement to upgrade cause problems for your organization
  • Negotiate an extended transition period between different versions of Office 365 so you are not forced to upgrade straight away.  For large organizations the planning and testing make take several months.

How can Certero help with Office 365 licensing?

Certero for Enterprise SAM can tackle all the complexities of Microsoft licensing. If you have any questions on Office licensing, or are keen to understand how Certero’s software asset management solution can help, please get in touch.

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