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Wondering where to start with Microsoft Licensing?

By May 6, 2015 No Comments

Microsoft Logocelito understands the pressure that our clients are under to make cost-effective, forecasting decisions that affect a company’s bottom line and their scalability. As a leader in the IT and telecommunications industry in Raleigh, NC, we provide tools to business owners and IT decision-makers to help make their job easier. Microsoft licensing can seem complicated and difficult to wade through, however a basic understanding of the three types gives you a solid starting point for educating yourself and confidently making prudent decisions.

There are three main types of Microsoft licensing that fall into the following categories:

Retail, OEM (Original Equipment Manufacturer), and Volume


This includes software bought at a store: an operating system, Office Suite products or another Microsoft product. It comes in a box with a product key that is good to use for just the one copy. You can use it as long as you own it and on the specified number of computers.


OEM licensing is used by equipment manufacturers only and is software pre-installed on a computer you buy.

The Microsoft Software License Terms are a set of usage rights granted to the end user by the PC manufacturer, and relate only to rights for that software as installed on that particular PC. The system builder is required to support the software on the original PC. Understanding that end users, over time, upgrade their PCs with different components, Microsoft needed to have one base component “left standing” that would still define the original PC. All components on a PC can be replaced other than the motherboard and the original system can retain the OEM license. Since the motherboard contains the CPU and is the “heart and soul” of the PC, when the motherboard is replaced (for reasons other than defect) a new PC is essentially created. The original system builder did not manufacture this new PC, and therefore cannot be expected to support it.


This particular type of licensing is typical for businesses to use. Purchasing in volume makes it easier and more affordable to run software on multiple computers in a single purchasing organization. It is also the only licensing you can use when installing software on a terminal server. When purchasing this licensing, you sign an agreement with Microsoft to activate only the number of licenses purchased.

One advantage to volume licensing is the availability of software assurance. Software assurance is a maintenance contract that allows you to upgrade your software when an upgrade is available instead of having to pay for a new version every time the program changes. You pay an annual fee and it is only available with volume licensing.

To download a document with further detailed benefits of software assurance, visit this link:

Why is all this important?

  • It helps in planning a work environment. How you license the software on your computers and other machines affects how you can use them.
  • It costs money in the long-term to not have a well thought-out plan.
  • Once you start buying new computers, licensing costs can add up quickly. Understanding your options can save headaches in making decisions.
  • Which licensing option you choose affects your flexibility in moving licenses around to different PCs.
  • As mentioned earlier, the choice affects the ability to put licensing on a terminal server.
  • From a management perspective, Microsoft Volume Licensing customers have access to the Microsoft Volume Licensing Center (VLSC), where they can download licensed products, access product keys, and manage all licensing agreements online.

Microsoft licensing is just one of the many things celito helps guide our clients through. We’re proud of our 15-year history partnering with our clients to provide personalized support and services. If you have any questions or would like more information, please contact our sales team at