The Value of Volume Licensing

Quick quiz: If you're planning to buy computers and install Microsoft Office XP for a half-dozen new employees, what's the most cost-effective solution? Should you take advantage of a PC manufacturer's bundle that provides a machine with Office preinstalled, or should you shop separately for the computers and copies of Office? If you buy Office separately from the systems, will you get the best deal at your local retailer or through Microsoft's volume-licensing program?

As you've probably guessed, these are trick questions because you need to consider manageability and flexibility in addition to price. The price for that OEM bundle might look great, but an OEM license for Office carries significant restrictions that might cost you more in the long run.

For one thing, an OEM Office license applies only to the machine that you bought it with. If you later replace that machine, you can't transfer the Office license to the replacement system. The new system will need a new license.

Furthermore, an OEM license doesn't let you downgrade to an earlier version of Office. I've seen newsgroup posts from employees of dozens of companies that ordered new systems only to find that Outlook 2002 doesn't support the Net Folders feature for peer-to-peer sharing and has security features that dramatically hinder certain applications that access addresses or send messages. One way to restore the functionality that these companies had in Outlook 2000 is to remove Office XP and install Office 2000 instead. But an OEM license for Office XP doesn't allow downgrades. The companies would need proper Office 2000 licenses for the new machines.

A retail copy of Office XP does let you transfer the software to another machine or downgrade to any earlier version. What retail software lacks is the ability to set up a network installation point. As I discussed in the Outlook UPDATE column "Office XP and Outlook 2002 Shake Up Outlook Deployment," June 5, 2001, to set up a network installation point for Office XP, you need the enterprise version of the software and a volume-license key.

Most small businesses probably think that volume licensing is just for big corporations. However, if you want to be able to centrally manage your Office installation, you need to buy Office through the volume-licensing program. Microsoft has a license program—the Open program-–for organizations buying as few as five software licenses. This program offers the same electronic license tracking that large volume-license customers get, so Open license buyers don't need to keep paper copies to prove that they have enough licenses to cover all their machines.

Even for volume licenses, shopping around pays because prices vary. Unfortunately, getting information about Open program resellers and their price lists isn't easy. Microsoft provides a list of 27 major Open license resellers, but few of the pages linked to that list display volume-license prices or even a "Contact us to set up your Open license" button. If you prefer to deal with a local company, you can go to to find those near your ZIP code. The Web pages for firms participating in the Rite2U system have a Microsoft Licensing Wizard that makes checking prices painless. You can also check volume-license prices at ; register as a small business, not a channel partner.

Microsoft Licensing Information

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