Understanding Windows Licensing

Going through this article will help understanding windows licensing. One of the biggest costs to any IT department is the cost of software. When you add the client copies of Windows and Office, the cost of the server operating system, and the cost of  additional enterprise software such as Exchange or SQL, it can easily add up to thousands of dollars. Therefore, you need to look at your available options to get the best price for what you need to do.

A software license is given to you from a software company like Microsoft that gives you permission to use a specific software package and usually comes with many restrictions. Most licenses from corporations such as Microsoft work more like a lease rather than a purchase of the actual software. The typical restriction limits you to use only one copy of the software per license and prohibits you from distributing or copying the license in any way (except for backup purposes). Licenses for enterprise-class server software (such as Microsoft Exchange or Microsoft SQL) could also require a Client Access License (CAL) for each user that is to access the server software.

The least inexpensive license to obtain is the OEM (Original Equipment Manufacturer) license, which can only be purchased with a new computer from a system builder such as HP or IBM.

Unfortunately, these licenses are tied to a specific machine and cannot be transferred later to a new machine. The OEM is usually responsible for technical support on the software that you bought.
The retail license (usually purchased from your office or computer store or over the Internet) allows you move it from one machine to another. Of course, retail software usually costs more than OEM software. Another disadvantage of using retail software from Microsoft is that you need to enter a key code to activate the software. Another disadvantage is that if you move the software to another computer or you make semi-significant changes such as adding RAM or a new hard drive, you may need to re-activate the software.

Finally, Microsoft has several volume licensing programs available to organize their licenses and to keep you up to date with the newest software at a discounted price. The Open license is intended for businesses with at least 5 PCs, and Select License and Enterprise Agreement Plans are licensing programs intended for corporations with at least 250 PCs. Each of these programs may have additional benefits such as free take-home licenses and training.

Volume licensing can be further broken down into Multiple Activation Key (MAK) and Key Management Services (KMS). With MAK, each key has to be registered and activated individually, while Key Management Services (KMS) uses a KMS server to automatically connect to Microsoft’s license warehouse and activate the key.