What Businesses Should Know About Office 365: Microsoft Licensing

In a series of blog posts, we’re identifying how businesses who use Office 365 are able to remain flexible, up-to-date and productive. To realise the benefits of Office 365 it’s important to understand how traditional Microsoft Licensing works.

Launched in June 2011, Office 365 has grown to become Microsoft’s fastest growing business product. It was developed to support growing businesses, providing access to enterprise level applications and security protection at an affordable price, through subscription-based licensing.

To see the true benefits of Office 365, it’s important to know how it differs from traditional Microsoft licensing. Here we explain what you need to know.

Traditional Microsoft Licensing Explained

OLP: Microsoft Open License Plan

Minimum no. of licenses: Five
How it’s paid for: Upfront
Term: Two years
How to upgrade: Purchase Software Assurance* or new licenses at the end of the agreement

Pros:

• You own the software.
• No ongoing payments.

Cons:

• Buying licenses outright can cause issues down the line, as you cannot foresee what your future needs will be.
• Licenses bought through this scheme are perpetual, therefore no upgrade path.

OVL: Open Value License

Minimum no. of licenses: Five
How it’s paid for: Annually
Term: Three years
How to upgrade: Software Assurance* is included. Purchase new licenses at the end of the agreement

Pros:

• It is slightly cheaper than OLP.
• Costs are predictable as they’re split over the three year agreement.
• OVL includes Software Assurance*, allowing you to benefit from the most up to date software during the term of the agreement.
• At the end of the agreement you own the licenses.

Cons:

• You cannot foresee what your future needs will be and how many licenses you’ll require.
• You may own the licenses at the end of the agreement but they will soon be out dated.

OVS: Open Value Subscription

Minimum no. of licenses: Five
How it’s paid for: Annually
Term: Three years
How to upgrade: Software is kept up-to-date during the term of the agreement, which can be extended

Pros:

• No upfront costs as you rent the licenses.
• The number of licenses you pay for can be reduced or increased depending on your requirements.
• It provides the rights to run the software throughout your business during the term of the agreement.

Cons:

• At the end of the three year agreement the licenses are not owned.
• To continue using the software after the agreement has ended you must extend the agreement, buy out the software or discontinue use.

How does Office 365 licencing work?

Office 365 licencing offers a set of applications and services that you pay for on a monthly or annual basis. With you purchase, you specify the number of licences that you need, based on how many people you have in your organisation. Below we share all the pros and cons of Office 365 licencing .

Minimum no. of licenses: One
How it’s paid for: Monthly or annually
Term: One year
How to upgrade: Software is kept up-to-date during the term of the agreement, which can be extended

Pros:

• No upfront costs as you simply rent the licenses.
• Subscription pricing model means costs are predictable, what’s more those who pay for a year upfront get Office 365 at a discounted rate.
• License management is easy since you gain access to numerous applications within one cloud-based product.
• The number of licenses you pay for can be reduced or increased depending on your requirements.
• It provides the rights to run the software throughout your business during the term of the agreement.
• Access the latest versions of Office applications.
• Office 365 can be deployed more quickly than on-premise counterparts, and allows you to add and remove users in minutes.
• You’re able to access Office 365 applications anytime, anywhere, from any device (5 devices per user license).
• Mix and match plans based on your requirements.

Cons:

• The licenses are not owned.
• To continue using the software you must renew your agreement.

Find out more about Office 365 here.

Why Office 365 licencing is best for business?

The two biggest wins with Microsoft’s licensing options for Office 365 are cost control and flexibility, so  if you want to keep up with the changing pace of technology and benefit from predictable and manageable license costs, Office 365 could be for you. for increased flexibility, licenses are attached to users and each user is licensed for up to five devices.

*Software Assurance is an optional license purchased at the same time as the full license that allows you to upgrade to the newest version of the software during your fixed term agreement.