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James Nagurney - National Business Development Manager

The Microsoft Licensing Corner #2

What’s the Deal with Subscription Licensing?

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This month, I think it makes sense to take a look at a trend that has been growing over the past couple of years: subscription vs. perpetual licensing. You may not recognize the distinction between these two types of license entitlements when you look over your Microsoft Licensing Statement, but it’s crucial that you’re aware of the difference. Read on for the main differences between perpetual and subscription licensing, as well as more information about Microsoft’s subscription-only product offerings.

Nearly everyone is familiar with perpetual licensing. This is the way you would have traditionally purchased Office, Windows, Exchange, and other software titles. When you purchased Office 2007, for example, you knew that, after a one-time payment, this license was yours to keep and use in perpetuity. And if you had Software Assurance on that license, and the new version was released during that SA period, you owned the next version as well.

Late last decade, the practice of subscription licensing emerged. It helps to think of a subscription license as a software lease: you don’t actually own the software, so you’re paying for the usage of the software only. Once you stop paying, you must stop using the software. And now, several of Microsoft’s software offerings are simply not available in a perpetual-use model—if you want to use this software, you must continue to pay for it until you don’t want it anymore.

I’ve come across two main reactions to this trend:

1. How can I not actually own the software? If I pay for Office, I want to be able to use it indefinitely without being locked into an annual fee.

2. Why do I want to own previous versions of the software? I can’t sell my old software assets, so why not just pay for what I use?

Both points of view have merit. People are used to paying for a software product and owning it outright. But, having paid once, they might not be as likely to pay for new versions of that product. By implementing the subscription-only model, it’s pretty clear that Microsoft is trying to retain a steady stream of revenue. I don’t necessarily think that’s a negative trend, but it is something everyone should be aware of. So for instance, if you deploy a subscription product like MDOP (Microsoft’s Desktop Optimization Pack), and you like MDOP, then you’ll have to continue paying for MDOP—but you’re also entitled to any updates without paying extra. If you choose not to renew MDOP at the end of your agreement, you’ll have to uninstall the software.

Microsoft’s Most Popular Subscription-Only Products

  • MDOP: This is tied to Windows desktop Software Assurance. If you let your Windows SA lapse, your renewal of MDOP will also end.
  • VDA (Virtual Desktop Assurance): Microsoft’s licensing for full blown VDI. If you want to spin up a virtual Windows desktop on a server, you need to have the VDA subscription in place. VDA can be purchased on its own (generally for thin clients) or as part of Windows SA (see MDOP above). 
  • Windows Companion Subscription License (CSL): This add-on to the VDA subscription allows your virtual desktop to be viewed on secondary devices like iPads.
  • System Center Endpoint Protection: Anti-virus, anti-malware, this is part of your Core CAL EA, so if you have it deployed and choose not to renew your Core CAL, you will have to uninstall it.
  • Exchange Hosted Encryption and Online Protection for Exchange: Both of these can be purchased as standalone subscriptions or as part of Exchange Enterprise CAL Software Assurance. Again, if you let this SA lapse, you’ll need to uninstall.
  • Office 365 packages: These include hosted Exchange, SharePoint, and Lync, and may include Office as well. 
  • Azure: Microsoft’s hosted Windows Server infrastructure.

 

All of the subscriptions listed above are becoming more popular every year, VDA and Office 365 particularly. If moving to the cloud or implementing VDI is on your roadmap, make sure you keep in mind the nature of subscription licensing vs. the perpetual licensing of the past.

Windows XP reached its final end-of-life on April 8, 2014. If your organization is still on Microsoft XP, you will no longer receive Service Packs, security patches, and support. It's time to break up with XP. Click here to craft your exit strategy.

Previously in the Microsoft Licensing Corner

Are You at Risk for Compliance Drift?


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