Network Administration: Software License Choices

In many cases, software vendors give you a choice of several different types of licenses to choose from. When you purchase software for use on a network, you need to be aware of the differences between these license types so you can decide which type of license to get. The most common types are

  • Retail: A retail license is the software you buy directly from the software vendor, a local store, or an online store. A retail software license usually grants you the right for a single user to install and use the software.

    The key point is that only one user may use the software at a time. The main benefit of a retail license is that it stays with the user when the user upgrades his or her computer.

  • OEM: An OEM license is for software that’s installed by a computer manufacturer on a new computer. (OEM stands for original equipment manufacturer.) For example, if you purchase a computer from Dell and order Microsoft Office Professional along with the computer, you’re getting an OEM license.

    The most important thing to know about an OEM license is that it applies only to the specific computer for which you purchased the software. You are never allowed to install the software on any computer other than the one for which you purchased the software.

    If this sounds like a severe limitation, it is. However, OEM licenses are usually substantially less expensive than retail licenses. For example, a retail license of Microsoft Office 2007 Professional sells for about $500. The OEM version is less than $400.

  • Volume: A volume license allows you to install and use the software on more than one computer. The simplest type of volume license simply specifies how many computers on which you can install the software. For example, you might purchase a 20-user version of a program that allows you to install the software on 20 computers.

    Usually, you’re on the honor system to make sure that you don’t exceed the quantity. You want to set up some type of system to keep track of this type of software license. For example, you could create an Excel spreadsheet in which you record the name of each person for whom you install the software.

    Volume licenses can become considerably more complicated. For example, Microsoft offers several different types of volume license programs, each with different pricing and different features and benefits. The following table summarizes the features of these license programs. For more information, refer to Microsoft Licensing.

Microsoft Volume License Plans
Plan Features
Open License Purchase as few as five end-user licenses.
Open Value Purchase as few as five end-user licenses and receive free
upgrades during the subscription term (three years).
Select License This is a licensing program designed for companies with 250 or
more employees.
Enterprise This is an alternative to the Select License program
that’s designed to cost-effectively provide Windows Vista,
Office, and certain other programs throughout an organization of at
least 250 employees.
  • Subscription: A subscription isn’t really a separate type of license but rather an optional add-on to a volume license. The added subscription fee entitles you to technical support and free product upgrades during the term of the subscription, which is usually annual.

    For some types of products , the subscription also includes periodic downloads of new data. For example, antivirus software usually includes a subscription that regularly updates your virus signature data. Without the subscription, the antivirus software would quickly become ineffective.