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What is a software license and what types are there?

A software license gives you the legal right to install, use, access, display, run, or otherwise interact with a specific software program.Sometimes you might need a license for each computer or device that the software is installed on. A license covers things such as downgrade rights and specifies if a license is perpetual (everlasting) or non-perpetual (temporary with a specific end date).

For each Microsoft software program that you use, you need a license. Microsoft offers a range of licensing options to meet the different needs of customers. The terms and conditions for every licensing option vary, as does the price – both of them depend on the purchased license type.

What are the most common license types?

Each license type is suitable for different users. For example the OEM and Retail licenses are aimed at regular user, while volume licenses are best for businesses and organizations.

Quick overview of license types


*1
FPP - Full Packaged Product
*2 RDS - Remote Desktop Services
*3 VAMT - Volume Activation Management Tool
*4 MAK - Multiple Activation Key; KMS - Key Management Services

OEM

The Original Equipment Manufacturer license. This type of license is acquired when you  buy a computer, a laptop, or other device from an e-shop, a physical store, or directly from companies like HP or Dell, and it comes with an already installed operating system, Microsoft apps, or both. The price of the OS and/or app licenses is counted into the final price of your purchased electronic product.

Transferability

Transferable between machines = when you deactivate the license from one device, you can then activate it on another.

Legal note: Reselling of software licenses (including OEM) is completely legal within the European Union. According to EU law “An author of software cannot oppose the resale of his ‘used’ licences” and “even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.” - The CJEU judgment in Case C-128/11 UsedSoft GmbH v Oracle International Corp

Activation of used* license

Online activation is the easiest, however, sometimes it doesn't work for Windows 10 and Office products. In that case, please, contact our customer support (e-mail: info@software-deals.eu, phone: +420 228 882 826) and we will activate the product via phone activation for you.

*redundant license that previously had a different owner, but was renewed, so that it can serve someone else


Retail/FPP

The Full Packaged Product, more commonly referred to as retail is probably the simplest type of Microsoft licenses. You just buy your license online, or in a store, and it’s yours forever (you may have bought Windows or Office products this way in the past). It can be installed, re-installed, or uninstalled as many times as you want, as long as you use it only on one device at any one time.

Transferability

Transferable between machines = when you deactivate the license from one device, you can then activate it on another.

Legal note: Reselling of software licenses (including OEM) is completely legal within the European Union. According to EU law “An author of software cannot oppose the resale of his ‘used’ licences” and “even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.” - The CJEU judgment in Case C-128/11 UsedSoft GmbH v Oracle International Corp

Activation of used* license

Online activation is the easiest, however, sometimes it doesn't work for Windows 10 and Office products. In that case, please, contact our customer support (e-mail: info@software-deals.eu, phone: +420 228 882 826) and we will activate the product via phone activation for you.

*redundant license that previously had a different owner, but was renewed, so that it can serve someone else


Volume licensing

This type of licensing is best suited for businesses and organizations that require a purchase of higher number of software licenses without the need to have accompanying physical items such as CDs or DVDs, a user’s guide, or a box. Purchasing in volume cuts the costs for these items as well as reduces the price per installation as the software can be used simultaneously on multiple computers within the organization. Volume licensing provides more flexibility and manageability and thanks to the Volume Activation Management tool (VAMT), the licenses can be installed on large amount of devices at once.

Transferability

Transferable between machines = when you uninstall the program on one device, you can then install it on another.

Legal note: Reselling of software licenses (including OEM) is completely legal within the European Union. According to EU law “An author of software cannot oppose the resale of his ‘used’ licences” and “even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.”

It is clear from the CJEU's judgement on the usedSoft/Oracle dispute that the principle of 'exhaustion' applies to every single program that has been purchased commercially. It is irrelevant whether the individual programs are sold as part of a volume licensing agreement or not. The Higher Regional Court in Frankfurt came to the same conclusion in its verdict in December 2012. It noted that the resale of individual licenses originally purchased as part of a volume licensing agreement did not "(lead) to the assumption that this was concerned with impermissible splitting."

Portability

Extended use rights - one user can use the software on multiple devices.

Management

  • Easy management through VAMT (Volume Activation Management Tool)
  • Fast activation of software products on large amount of devices
  • Compatible with Remote Desktop Services

Activation of used* licenses

The activation of each license can be done manually online. This one-by-one activation is suitable for smaller amount of licenses as larger amount would take too much time.

Automated software activation:

A higher number of licenses can be activated at once by a VAMT tool (that can be downloaded here). The activation of your software is done through MAK (Multiple Activation Key). Each MAK key contains a specific number of device activations. The number of available activations per MAK product key can be checked with the VAMT tool – this is usually handled by an administrator of a company network. If you find out that the number of possible remaining activations is low, contact us via e-mail: info@software-deals.eu or by phone: +420 228 882 826 and we will make sure this number is increased (by sending a special request to the software producer).

MAK keys are best suited for companies and organizations in which devices are not re-installed often.

Another way to activate your volume licenses is KMS (Key Management Services). Similar to MAK keys, KMS keys are good for a specific number of activations. The difference lies in a different process of activation. You must configure a server within your corporate network with the Software Licensing Service and your KMS key. This server will communicate with the Microsoft servers to activate your products. You can then activate your devices by connecting to the KMS licensing server via your internal network.

KMS activations expire after a set period of time (180 days). After that time, the client needs to reconnect to the server and reactivate the licence.

KMS is most suitable for devices that rarely, if ever, leave the corporate network (such as in banks, big companies etc.).

*redundant licenses that previously had a different owner, but were renewed, so that they can serve someone else


Mutual compatibility of licenses

Basically, there are two different types of files that are used for installing Microsoft apps. They’re called Click-to-Run and Windows Installer (MSI).

The Click-to-Run technology is used for installing the Office 365 subscription and most of other Office 2013 and 2016 products. The Windows Installer technology (MSI) is used to install the volume license editions of Office, such as Microsoft Office Professional Plus and Microsoft Office Standard.

Unfortunately, you can't have Office products (such as 2013 or 2016 editions) that use two different installation technologies (mentioned above) installed on the same computer. This also applies to standalone applications like Access, Visio, Project, Skype for Business, or OneDrive for Business.

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