How Does Microsoft Licensing Work?
From a simple End User License Agreement to product use rights associated with more complex Volume Licensing agreements, Microsoft licensing works to defines the terms and conditions you must comply with to use Microsoft software products. While the rights bestowed by a Microsoft license depend on whether you are a home or business user, the intent remains the same. Microsoft licensing exists to protect copyright restrictions and prevent software piracy.
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The license you purchase depends on the number of computers that will be running the product, and where you purchased the Microsoft software. In general, Original Equipment Manufacturer (OEM) licenses cover software preinstalled on new computers. The End User License Agreement (EULA) covers a Full Packaged Product (FPP), or boxed, shrink-wrapped software purchased through retail channels for installation on fewer than five computers, and Volume Licensing covers software purchased directly from Microsoft, or a Microsoft Partner for installation on multiple computers. Numerous license options exist for Volume Licensing customers so they can tailor licensing to suit business needs.
Use Rights
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No matter the license category or type, licensing documents begin with a paragraph stating that software use constitutes accepting the terms of the license, followed by a general use rights statement, and finally, use rights specific to the software you purchased. Use Rights define the number of computers you may install the software on, whether you can allow users other than yourself to access the software remotely, and distribution restrictions for items such as templates, clip art, and images.
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Activation
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Microsoft follows a mandatory activation policy for all software products. Microsoft software includes a validation feature programmed in that, if not activated within a specified period, causes the software to lose functionality. Once you activate and validate the software, Microsoft reserves the right to perform periodic validation checks that send information, such as the software version number and product key, to Microsoft. While this information transmits without your knowledge, Microsoft states software use constitutes permission to transmit.
Scope
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Scope defines Microsoft's right to limit your use of the software and specifically states they are licensing, not selling, the software to you. Scope also refers to licensing restrictions regarding copying, selling, upgrading, and uninstalling and then reinstalling software. While the specific license you purchase may allow for installation on numerous computers, copying is generally limited to one back-up copy for reinstallation purposes only. Under certain conditions, you may sell your software license, but not software, such as software preinstalled on new computers, marked "NFR," or Not for Sale. Most license agreements allow you to uninstall and reinstall software one time every 90 days. In addition, some volume license customers are eligible for free product upgrades.
Proof of License
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Licensing documents define what constitutes proof of license, depending on the type of license you acquire. For most, proof of license is a label identifying the software as a "genuine" Microsoft product. For example, a volume license customer running 20 copies of Microsoft Office 2007 Professional would receive 20 labels to affix to each computer running the software. A home user will see the label on the shrink-wrap packaging. Proof of license also includes verification with merchant records via purchase receipts.
Warranty
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Licensing also works to provide users with warranty information. Microsoft products carry a transferable, limited warranty covering a one-year period from the date of purchase. Warranty restrictions require replacement before refund, and also require the return of all software and associated materials, such as packaging, before issuing a refund.
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