Microsoft Volume Licensing - the basics

14 jul '16 - Andra Grosu - share: LinkedIN Mail

The aim of this article is to shed some light over the complexity of the different Microsoft Volume Licensing programs.

Whether you acquire software from Microsoft or any other publisher, you first of all need to understand what a software license is all about. In case you purchase a license you obtain the right –to be understood as the permission- to use the software pursuant to a software license agreement. The purchase of a license does not provide an ownership right since the ownership of the software remains at all times at the software vendor itself.


1) Versions vs. Edition:

Version means the development of a product, optimized and improved from one generation to another. 

Edition means the same version of a specific software product, but with different features.


2) Upgrade vs Update vs Downgrade:

Upgrade means to install a newer version of the software than the one currently installed on the device.

Update means to install features that have the ability to improve and optimize the current version of a specific software program.

Downgrade means to use an older version of the same software than the version currently installed on the device.

3) OEM

Stands for Original Equipment Manufacturer and refers to preinstalled software by the System Builder, is perpetual and cannot be moved from the device it was originally installed on. It is a cheap option, but the eligible Microsoft products are limited and have limited downgrade rights.

4) FPP: 

Stands for Full Packaged Product and is a sold in retail, perpetual product than can be moved from one device to another.   It comes in a box with the installation kit. Usually it is the most expensive way of buying a Microsoft license. The end-user can only use the acquired version of the license, without any upgrade or downgrade rights.


If you are a Volume Licensing customer, with active Software Assurance, you can migrate your software products from a lower edition to a higher edition.

6) True-up

Represents a process specific for Enterprise Agreements (EA) that enables you to use additional licenses for any product covered by the EA. Once a year you adjust your agreement with the total number of licenses added by the organization in the previous 12 Months.

7) Perpetual vs Non-Perpetual

Perpetual means that you can use the purchased license without any time limitation.

Non-Perpetual means that you can use the license for a limited period of time, as long as you pay for it. 

8) Transactional vs. Committed

Transactional means that you enter into a volume licensing program with just a part of the devices owned by your organization.

Committed means that you enter into a volume licensing program with all your company’s devices.

What is volume licensing

Microsoft offers this service to organizations that require multiple licenses that have enhanced functionalities compared to the same licenses purchased through OEM or FPP. 


  • Only need an initial purchase of 5 licenses, regardless of their category;
  • Extended  downgrade rights;
  • License is not attached to the device;
  •  Re-imaging rights (cloning and distribution on other machines);   
  •  License administration is done through Volume License Service Center VLSC;  
  • You benefit from volume discounts;
  • You can acquire upgrade rights if they are not already included in the program;
  •  You can choose between Volume Licensing Programs in order to have Software Assurance as part of the program or as an option to be added at a later stage


  • You cannot enter into a program with less than 5 licenses acquired;  
  • Licenses purchased through a Volume Licensing Program can be more expensive than the OEM license;

Conditions under which a license is purchased under Volume Licensing program can be found in:

  • MPT - Microsoft Product Terms: terms and conditions of licenses that are part of a Volume Licensing Program.
  • OST – Online Services Terms: conditions to use online services.
  • SPUR – Services Provider Use Rights: conditions of use for licenses acquired through the  SPLA
  • SPLA    – Service Provider License Agreement. 
  • SLA – Software License Agreement

You always have to enter a volume licensing program with devices that already have an operating system (OS) installed. Operating systems can not be purchased under the volume licensing program, you can only acquire upgrades for your existing OS.  



Oracle Database and hardware infrastructure

The required number of licenses for Oracle’s Database programs are (almost) at all times related to the hardware infrastructure on which the software is installed. Incorrect interpretation or understanding of whether the software is deemed to be installed and how the installed software should be licensed in a certain specific hardware infrastructure is by far the number 1 license compliance issue. 

Oracle Database and hardware infrastructure


Fill out this form to download our free whitepaper

Please make sure you've filled out the form correctly.

B-lay will use any of the data provided above in accordance with our privacy policy