Microsoft Senior Sales Excellence Manager - Eric Ligman

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OEM Office for Terminal Services? You might want to check that EULA...

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OEM Office for Terminal Services? You might want to check that EULA...

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This topic came up in our User Group yesterday and since it seemed to be quite a hot topic, I figured I would share it out more broadly so everyone could understand the issue at hand...

The question asked was, "If a customer has OEM licenses of Office 2003 and they want to use Terminal Services for the PCs on the network, do the OEM Office 2003 licenses give them rights to access Office from the Terminal Server?"

The answer (in short form): No, OEM Office licenses cannot be used to access Office off of any other device, including Terminal Servers or File Servers. OEM Office licenses must be installed onto the PC from a CD/DVD drive attached to the PC and run from the hard drive in that PC. The OEM license of Office cannot be accessed by, run by, or transferred to any other PC.

Now for the answer in longer form as it was discussed in the User Group (across various replies):

It all goes back to the basics of software in that when you buy software, you are actually purchasing the rights to use the software under the terms of the license agreement (EULA), you are not buying the software itself. And this is the same for software other than Microsoft as well. That's why understanding the differences between what the OEM EULA states and the Volume License EULA states for Office is so important. This is the big reason for the vast difference between the rights in the OEM column vs. the OEM + Software Assurance column in the "Office Rights" doc in the MS Small Biz Shared Documents section of our Microsoft Small Business Channel Community Site (http://www.mssmallbiz.com).

I do walk through these differences in the, "What is the difference between OEM, Retail Box, and Volume Licensing software? Which is right for me?" video in the Common Questions & Misconceptions section of the Microsoft Small Business Channel Community Site (http://www.mssmallbiz.com). Please feel free to point people to that session or any of the other items we post there to help address the questions you receive, including the

If you look at the "Office Rights" doc that we have posted in the MS Small Biz Shared Documents section of our site (http://www.mssmallbiz.com), you will see a listing of OEM, OEM with Software Assurance, and Volume Licensing rights for Office. Under OEM you will notice that there are no Network install or use rights, which means that an OEM license of Office has to be installed on the local machine, from the local machine (i.e. CD/DVD drive in machine), and can only be run on that local machine. Since TS runs Office on the server, Office is not being run on the local machine; therefore, an OEM license of Office can not be used for TS.

If you look at the Retail Box EULA for Office 2003, you will see the following in section 1.2 of the EULA:

"1.2 Alternative Rights for Storage/Network Use. As an alternative to Section 1.1(a), you may install a copy of the Software on a network storage device, such as a server computer, and allow one access device, such as a personal computer, to access and use that licensed copy of the Software over a private network. You must obtain a license to the Software for each additional device that accesses and uses the Software installed on the network storage device, except as permitted by Section 1.4 of this EULA."

This states that you can use this license to run Office from a network storage device, such as a TS Server; however, please note the section that states you must obtain a license to the Software for each additional device that accesses the Software. This means that for every device that runs Office from that server, you need a separate Office license for. Office is licensed by device and is non-concurrent licensing. So every device that runs Office needs it’s own license for Office. In addition, ensure that you have all of the Proof of Ownership items for each of the OEM Office licenses you have as without these, you have no qualification to run Office. For a list of what the Proof of Ownership items are, please see the, "What do I need to show proof of ownership for my Microsoft software?" video we have posted in the Common Questions & Misconceptions section of the Microsoft Small Business Channel Community Site (http://www.mssmallbiz.com). Also, the need to maintain all Proof of Ownership items would apply for any Retail Boxed licenses of Office as well. Since all Proof of Ownership components of Volume Licensing are retained online on a Server at Microsoft in Redmond, there is no concern over ever losing the licenses purchased through Volume Licensing (Unlike OEM or Retail Box).

As you can see in the "Office Rights" doc, all Volume Licensing Office licenses have Network Storage and Use Rights, so they would work for a TS environment as well. Again, you would still need an Office license for every device. Here is where Software Assurance can really help out though. Remember that Software Assurance for Office gets you a Home Use Rights license for Office Pro 2003. Because of this, if you had an Office 2003 license at work with Software Assurance and gave the Home Use Rights license to one of the employees, that employee could load the Home Use Rights license of Office 2003 on a home PC. Then if they TS into the Office from that home PC, they already have the license of Office 2003 for that device from their Software Assurance. Since the Home Use Rights benefit of Software Assurance is by device, each license of Office 2003 that your company has with Software Assurance gets you one Home Use Rights license of Office Pro 2003 for use on a home PC.

As a Partner, if you have customers buying OEM Office Pro 2003 today, you may want to look at the, "OfficeProOEMSAAdd" document in the Sales Tools section of the Microsoft Small Business Channel Community Site (http://www.mssmallbiz.com). It helps show a customer the differences between their OEM Office Pro 2003 license and that same OEM Office Pro 2003 license with Software Assurance added to it. In addition, it shows them how this can be achieved for what breaks down to 37 cents per day. And that 37 cents per day would not only have given them the ability to use those Office licenses in a Terminal Services environment, it would have also provided them three-years of Upgrade Protection, three years of eLearning courses on how to use Office and get the most from it, a FREE license of InfoPath 2003 ($199 Value), a Home Use license for Office Pro 2003, and three years of upgrades for that Home Use License of Office Pro 2003! All for 37 cents per day… (Yes, the same could be done with OEM Office 2003 Standard and OEM Office 2003 SBE. The cost would be a little lower than 37 cents per day and the only difference would be that they would not get the InfoPath 2003 since that is only included in Pro).

Here is also where the value of understanding licensing basics can really help you as a partner differentiate yourselves. When you are having this conversation with a customer, simply ask, "Did the person who sold you these OEM Office licenses explain this to you?" If they say, "No," you should reply, "well, they should have." Then you can let them know that this is one of the advantages of working with you for their Microsoft solutions because not only do you possess the technical skills to help them achieve the desired results, you also have the knowledge to ensure they get the right licensing to allow them to accomplish this solution and not waste money purchasing something that will not allow them to do this (as is the situation they are in now).

The old saying is still true... "The cheapest solution is not always the best or right solution." Customers don't want to waste money and buying the wrong licenses is wasting money. Show them you can help them buy the right licenses, then they can see how you can help them save money. (Yes, OEM looked like the cheapest to them originally; however, now that they know it won't let them do what they wanted, it will prove out to be the more expensive option. Had they started with Volume Licenses of Office or purchased Software Assurance for those OEM Office 2003 licenses within 90 days of the OEM purchase, it would have been a much better solution and cost them less in the long run.)

Another example would be a customer who purchased a full retail boxed copy of SBS Server. As soon as you see this, you know the customer did not have their options explained to them and they paid too much. Take a look at our "Why would I order part# T72-00020? (SBS 2003 Server Retail Box)" Blog posting from May 11th for more details on this.

While we are on the topic of OEM software, you might want to also check out our,
"OEM Software.  Let's Set The Record Straight..." post from June 6th for additional information on requirements to purchase OEM software. 

Thank you and have a wonderful day,

Eric Ligman
Microsoft US Senior Manager,
Small Business Community Engagement
This posting is provided "AS IS" with no warranties, and confers no rights

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