Ed Bott’s Microsoft Report

What Microsoft won't tell you about Windows 7 licensing

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Licensing
Windows 7

Full and Volume Licensing

I saved the high-priced spreads for last. The full license product represents the highest price you can pay as a consumer, but it also includes the most generous license. Big customers who are willing to buy in bulk can get full-featured editions of Windows, bundled with support contracts and special benefits, by signing up for Volume License agreements. Here's how these two products work.

Retail Full Package Product (FPP) This is the most expensive retail product of all and includes the fewest restrictions of any Windows version. You can install it on any PC, new or old. You can boot from the installation media and set up Windows 7 on a PC with a squeaky clean hard drive without having to jump through a single hoop. You can install it on any Mac, in a virtual machine or using Boot Camp. You can install it in a virtual machine in Windows as well. You can even use it as an upgrade for a previous edition (although you pay more for the privilege than you need to).

Two other noteworthy benefits of an FPP copy of Windows are these:

You can uninstall the OS from a computer and transfer it to a new PC, something you can't do with an OEM copy of Windows. Microsoft briefly considered restricting this option when Vista was almost ready to launch but retreated in the face of a fierce backlash from customers
You get free technical support directly from Microsoft, rather than from the hardware maker.

FPP products are premium-priced, but for some circumstances they make sense. And for customers who are willing to pay that premium to have no license hassles whatsoever, this is the way to go

Enterprise (Volume License) This is the most misunderstood of all Windows versions, in my experience. The most common misconception is that Volume Licenses allow a large company to buy Windows in bulk copies at discounted prices and then install them on any PC in their organization. The reality is very different.

I won't even try to summarize all the details of Volume Licensing or its companion program, Software Assurance. If you want those details, you can lose yourself for days or weeks digging into the official Microsoft Volume Licensing website. You can read the dry yet oddly entertaining (in a geeky way) Emma Explains Microsoft Licensing in Depth! blog, whose proprietor, Emma Healey of Microsoft UK, also has some useful FAQs. You can even earn a Microsoft certification with a Licensing Delivery specialization, a thought that actually makes me shudder.

With those caveats out of the way, here are a few essential facts about Volume Licensing:

Volume Licenses are available for a long, long list of products, but for Windows 7, only Professional and Enterprise editions are available.
You can qualify for Volume Licensing with as few as five PCs in an organization.
All Volume Licenses are upgrades. You cannot legally buy a "naked" PC and attach a volume license to it. You must first buy a full license (typically an OEM license with a new PC purchase) and then use the Volume License to upgrade to the VL version you purchased.
Volume License keys were a source of rampant piracy in the Windows XP era. As a result, all Volume License copies of Windows 7 now have to be activated, using either a Multiple Activation Key or a Key Management Service. The big difference with the latter option (which applies to most large VL customers) is that the activation servers are managed locally by the customer and individual employees don't have to activate using Microsoft's servers.
According to Microsoft, a Windows Upgrade License purchased through a Volume License program is “tied” to the device to which it is first assigned and may not be reassigned. However, Volume Licensing customers who pay extra for Software Assurance coverage can reassign that coverage (which includes upgrade rights) to an appropriately licensed replacement device. If you find that confusing, join the crowd.

Disclaimer: I am not a lawyer, and this post does not represent legal advice. The information in this post comes from official Microsoft sources and represents my interpretation and belief based on my extensive experience with Windows. I believe this information to be accurate, but you should not rely on anything written here to make any buying or deployment decisions without reading the full license agreements. If you are concerned about your legal rights and responsibilities, you should consult an attorney and get any necessary legal advice for those issues.
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posted by Ed Bott
November 3, 2009 @ 6:41 pm

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