Microsoft 2014 Annual Report Download - page 16

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LICENSING OPTIONS
We license software to organizations under agreements that allow the customer to acquire multiple licenses of products
and services. Our agreements for organizations to acquire multiple licenses of products and services are designed to
provide them with a means of doing so without having to acquire separate licenses through retail channels. In delivering
organizational licensing agreements to the market, we use different programs designed to provide flexibility for
organizations of various sizes. While these programs may differ in various parts of the world, generally they include those
discussed below.
Customer Licensing Programs
Open Licensing
Designed primarily for small-to-medium organizations, Open Programs allows customers to acquire perpetual or
subscription licenses and, at the customer’s election, rights to future versions of software products over a specified time
period (two or three years depending on the Open Programs used). The offering that conveys rights to future versions of
certain software products over the contract period is called software assurance. Software assurance also provides
support, tools, and training to help customers deploy and use software efficiently. Open Programs has several variations
to fit customers’ diverse way of purchasing. Under the Open Program, customers can acquire licenses only or licenses
with software assurance. They can also renew software assurance upon the expiration of existing volume licensing
agreements. Office 365 is also available for purchase through the Open Program.
Select Plus Licensing
Designed primarily for medium-to-large organizations, the Select Plus Program allows customers to acquire perpetual
licenses and, at the customer’s election, software assurance over a specified time period (generally three years or less).
Similar to Open Programs, the Select Plus Program allows customers to acquire licenses only, acquire licenses with
software assurance, or renew software assurance upon the expiration of existing volume licensing agreements. A subset
of online services are also available for purchase through the Select Plus Program, and subscriptions are generally
structured with terms between one and three years.
Enterprise Agreement Licensing
Designed primarily for medium- and large-sized organizations that want to acquire licenses to Online Services and/or
software products, along with software assurance, for all or substantial parts of their enterprise. Enterprises can elect to
acquire perpetual licenses or, under the Enterprise Subscription Program, can acquire non-perpetual, subscription
agreements for a specified time period (generally three years). Online Services are also available for purchase through
the enterprise agreement and subscriptions are generally structured with three year terms.
Customer Licensing Programs — Online Services Only
Microsoft Online Subscription Agreement is designed to enable small and medium-sized businesses to easily purchase
Microsoft Online Services (excluding Azure). The program allows customers to acquire monthly or annual subscriptions
for cloud-based services.
Microsoft Azure Agreement is designed to enable small and medium-sized businesses to purchase Microsoft Azure
Subscription plans on a “pay-as-you-go” basis.
Partner Programs
The Microsoft Services Provider License Agreement is a program targeted at service providers and Independent Software
Vendors allowing these partners to provide software services and hosted applications to their end customers. Agreements
are generally structured with a three-year term, and partners are billed monthly based upon consumption.
Microsoft Online Services Reseller Agreement is a program enabling partners to package Microsoft Online Services with
the partners’ services.
Independent Software Vendor Royalty Program is a program that enables partners to use Microsoft software in their own
software programs.