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Let's set the record straight on Downgrade rights

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Let's set the record straight on Downgrade rights

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Since I published my, "Licensing Basics: What are Downgrade Rights?" post, I have been receiving some follow-up questions and been seeing some conversations and comments showing that there are some misconceptions about downgrade rights and some have a perception that downgrade rights are something new or that we suddenly made a shift in policy to add them in lately.  I am not sure where these misconceptions started at; however, I hope this helps set the record straight.

Remember that when you purchase software, what you are purchasing is a license to use the software under the terms of the license you are purchasing.  You are not actually buying the software itself.  Downgrade rights are merely one of those rights that you choose to purchase or not based on the type of license you purchase (just like Transfer rights is a right you choose to purchase or not).

Because business users are the ones who are most likely to utilize downgrade rights (due to standardizing on an image, or automated installs based on departments, or use of an older line of business application, etc.), it is in the business licenses that you will generally find downgrade rights included.  For example:

For the Windows Desktop Operating System: Remember that the only way to purchase a full Windows Desktop Operating System license is through OEM with your PC or through Retail Boxed product.  You cannot purchase a full Windows Desktop Operating System license through any Volume Licensing program.  Back when we released Windows XP, we released the Home version (Windows XP Home) and the Business version (Windows XP Pro).  As such, on October 8, 2001, we announced that we were including Downgrade Rights in our OEM Windows XP Pro licenses so that our business users would be able to take advantage of these rights when purchasing new PCs.  This trend continues in the Windows Vista era as Downgrade rights are included in OEM Windows Vista Business and Windows Vista Ultimate. Below is a video clip from a presentation I gave in 2002 regarding the downgrade rights included in OEM Windows XP Professional and the benefits this provides to business users:



For the desktop application side (such as Office): Unlike the Windows Desktop Operating System license, you can purchase full licenses of Microsoft desktop applications (like Office) through Volume Licensing, which is designed for our business customers.  So businesses do have the choice of purchasing with or without downgrade rights when purchasing Office based on the licensing program they choose.  If they choose OEM Office, downgrade rights are not included.  If they choose Volume Licensing, downgrade rights are included.  Volume Licensing has included downgrade rights for well over a decade, so this option has been available for a very long time.  Please note, since the Office 2003 timeframe, business customers can add Software Assurance within 90 days of their OEM Office purchase to certain versions of OEM Office if they want to get Volume Licensing rights for their OEM Office licenses.  For more on this, please see:

For Microsoft Server products: Like desktop application software, you can purchase full licenses of Microsoft server products (like Windows Server or Small Business Server) through Volume Licensing.  So businesses do have the choice of purchasing with or without downgrade rights when purchasing server products based on the licensing program they choose.  If they choose OEM server licenses, downgrade rights are generally not included.  (The exceptions are OEM Windows Server 2003 Standard and Enterprise Editions as well as Small Business Server 2003 Premium Edition, which do include downgrade rights)  If they choose Volume Licensing for their server products, downgrade rights are included.  Volume Licensing has included downgrade rights for well over a decade, so this option has been available for a very long time.  Please note, business customers can add Software Assurance within 90 days of their OEM server purchase to get Volume Licensing rights for their OEM server licenses.  For more on this, please see:

So what are the benefits of downgrade rights for a customer?  It provides them the flexibility to adopt technology as they wish in addition to saving them money.  For instance, let's say a business was buying several new PCs today and deciding between purchasing them with OEM Windows XP Pro or OEM Windows Vista Business, and let's say their standard internal systems image is still Windows XP Pro.  If they chose to purchase the PCs with Windows XP Pro, they would match their standard image today; however, what would happen when they want to move to Windows Vista?  They would need to purchase upgrades to Windows Vista to get there.  What this means is, they are spending money to purchase the OEM Windows XP Pro license today, then they are spending money again to purchase the upgrade to Windows Vista Business.  Had they chosen to purchase their new PCs with Windows Vista Business instead, they could utilize the downgrade rights to install Windows XP Pro instead today, then when they are ready to move to Windows Vista Business, they would already own those license rights and there would be no additional licensing cost to do so.  So not only does it provide them with the flexibility to choose what version they want to run when, it also saves them money when they do choose to implement the current version as well.

Below is a video explaining how downgrade rights work using the Microsoft Small Business Desktop Advantage as an example as well as a video showing downgrade rights inclusion in Volume Licensing but not in Retail Box and how you could tell:

Small Business Desktop Advantage Example Office 2003 Example

I hope this helps address the misconceptions that downgrade rights are new (they have been around for a long time), how they are available, and some of the benefits they provide to your business clients.

Thank you and have a wonderful day,

Eric LigmanFollow me on TWITTER clip_image001and RSS clip_image002
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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