Office 365: Essential Licensing Guide

The Essential Guide to Licensing
Microsoft Office 365™ in the Cloud

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If you are planning to move to Office 365, you likely have
questions about choosing the right product offering and licensing
model for your organization.
The key to a successful Office 365 migration is first understanding
the offerings available through the O365 product family that
are best suited to the needs of your end-users. Office 365
offers a number of purchasing options – each with different
levels of functionality – so knowing the requirements of your
users is important, given the impact on licensing models and
costs. This guide will walk you through each of these steps, and
includes information on all the major licensing programs and key
considerations for each.
The Essential Guide to Licensing Microsoft Office 365™ in the Cloud | Introduction

q GETTING STARTED: WHAT ARE THE PRODUCT OFFERINGS AVAILABLE?
One of the most important decisions is whether users require an Office 365 Suite, or if acquiring individual
components will meet your needs. Suites make sense when you need at least three online services – such as
Office Pro Plus, Exchange and SharePoint. The more online services you require, the more cost-effective it is
to purchase a suite. Components make sense when you need an individual product, such as Exchange hosted
online. The following chart illustrates the Office 365 Enterprise Suites available and will help you determine
when buying a suite or buying individual components makes sense for your organization and user profiles.
Whatever purchasing program you use, Microsoft offers flexibility in terms of how you bundle and deploy
Office 365. For example, you can mix licensing bundles to give one user group an E1 license and another an
E3 license suite. This is helpful if you have different user profiles and don’t want to standardize everyone on
the same products.
EXCHANGE ONLINE (PLAN 1) • EMAIL, CALENDAR, CONTACTS, DISCOVERY (AV/AS)
• VOICEMAIL AND ARCHIVING
• INSTANT MESSAGING AND PRESENCE, AV
• VIRTUAL MEETINGS
• VOICE (US AND UK ONLY)
• CLIENT PRODUCTIVITY APPLICATIONS AND WEB APPS
• WEB PRODUCTIVITY APPLICATIONS AND SHAREPOINT ONLINE PLAN 1
• WEB PRODUCTIVITY APPLICATIONS AND SHAREPOINT ONLINE PLAN 2
• ADVANCED PORTAL FOR COLLABORATION, AV
• FORMS, DATA VISUALIZATION, ACCESS/EXCEL/VISIO SERVICES
EXCHANGE ONLINE (PLAN 2)
SHAREPOINT ONLINE (PLAN 1)
SHAREPOINT ONLINE (PLAN 2)
LYNC ONLINE (PLAN 1)
OFFICE PROFESSIONAL PLUS
OFFICE WEB APPS (PLAN 1)
OFFICE WEB APPS (PLAN 2)
WORKLOAD STANDALONE SKUs KEY FEATURES
COMPONENTS SUITES
VOICE
FORMS, ACCESS/EXCEL/VISIO
VOICEMAIL AND ARCHIVE
OFFICE WEB APPS
CONFERENCING
IM AND PRESENCE
COLLABORATION PORTAL
EMAIL, CALENDAR, AV/AS
OFFICE 365 E1
INCLUDES:
EXCHANGE PLAN 1
SHAREPOINT PLAN 1
LYNC PLAN 2
INCLUDES:
EXCHANGE PLAN 2
SHAREPOINT PLAN 2
LYNC PLAN 2
OFFICE PROPLUS
OFFICE WEB APPS
INCLUDES:
EXCHANGE PLAN 2
SHAREPOINT PLAN 2
LYNC PLAN 2
*LYNC PLAN 3
OFFICE PROPLUS
OFFICE WEB APPS
LYNC PLUS
OFFICE 365 E3
OFFICE 365 E4
* US AND UK ONLY

w HOW TO LICENSE OFFICE 365
Once you’ve determined what offering make sense for your company, Microsoft offers four licensing models
for Office 365.
Open Business License Program
The Open Business License Program is best for small to mid-sized businesses since you only need a minimum
of five licenses to enroll in an Open Business Agreement. The program offers discounts compared to
Microsoft direct pricing and you can use Open Business Licenses for up to 150 seats. With an Open Business
License, you must purchase an annual subscription to Office 365. If you are making more than one Office
365 license purchase in a given year, it is best to initiate a new Open Business agreement term for each
purchase. Keep in mind by doing so you will need to manage multiple agreements and end dates.
Microsoft Products and Services Agreement (MPSA)
An MPSA can benefit organizations with a minimum of 150 seats. All of the same online services for Office 365
are available through the MPSA (either as standalone products, or as Enterprise Suites) but at greater discounts
than the Open Business License Program. No entry minimum is required to begin purchasing through the
MPSA. However, to maintain purchasing and discount eligibility you must commit to meeting minimum point
threshold within each product pool you purchase. This needs to be done by the compliance anniversary date. The
compliance anniversary date is the one year anniversary of the month you first sign your MPSA.
Enterprise Agreement (EA)
Enterprise Agreements require a three-year commitment and are ideal for organizations with at least 250
users. It’s worth considering an EA if you are looking to standardize on one or more of Microsoft’s core enterprise
products (Office, Windows OS, CAL Suite). EA considerations are covered in more detail later in this guide.
Microsoft Online Subscription Program (MOSP)
Outside of the Open Business, MPSA and Enterprise Agreements, you can also purchase Office 365 directly through
a Microsoft Online Subscription Program (MOSP). This is a direct Microsoft purchase. While this offering reflects
retail pricing (i.e. no discounts) it does afford the flexibility of a month-to-month usage commitment.

The Essential Guide to Licensing Microsoft Office 365™ in the Cloud | How to license O365
Open license Open value
Open value
subscription
Select Plus EA EA Subscription
Number of
desktop PCs
Minimum5
Minimum5
Any: price levels start
at 500 points per pool
250 or more
Licensing
offerings
License, License and
Software Assurance,
and Software Assurance
for renewals or
eligible OEM1
and FPP2
purchases
License and Software
Assurance and Software
Assurance renewals
License, License and
Software Assurance,
and Software
Assurance for renewals
or eligible OEM1
and
FPP2
purchases
License and Software
Assurance and Software
Assurance renewals
Agreement
term
Two years, not
renewable
Three years, renewable. One-
year option for Open Value
Subscription
Agreement never
expires
Three years, renewable
Payment
options
Up-front payment Annual payments or up-front Annual payments
Software
assurance*
Option to add Included Option to add Included
1
OEM
2
FPP
3
Online Services refer to applications hosted at Microsoft Data Centers with client bits that may or may not be installed locally. They are priced monthly and
billed annually for the term of the agreement.
4
Not available in some countries/regions. Contact your reseller to check current availability.
* Note: Software Assurance is automatically included with all Microsoft Office 365 or Online Services offerings because these products are sold as subscriptions.
Comparing Volume Licensing Programs

e OFFICE 365 ENTERPRISE AGREEMENTS: KEY CONSIDERATIONS
I’m not currently enrolled in an EA. What are my licensing options?
To enroll in an EA, Microsoft recommends you have 250 or more users. However, you will see cost savings
with as few as 190 users. If you are close to meeting these minimums or plan to add licenses over the term
of the agreement, it makes sense to consider an EA.
To enroll in an EA, you must standardize on at least one of the following enterprise products:
• Office 365
• Windows OS
• Core Client Access License (CAL): Includes Lync, Exchange, SharePoint, Windows, System Center
Configuration Manager and System Center EndPoint Protection
OR
• Enterprise CAL: Includes Core CAL and enterprise editions of the Core CAL suite as well as Windows Rights
Management Services and System Center Client Management Suite
Can I run Office on premise and in the cloud?
If you are licensed for an Office 365 E3 or E4 Suite as well as for on premise server products such as Lync and
Exchange, you are entitled to have a hybrid environment for both on premise and cloud utilizations across these
products. If utilizing Office Pro Plus for 365 you are entitled to a local install of Office Pro Plus 365 on up to five
devices. The E1, E3 and E4 Suites include Office Web Apps for any online usage.
What is a Bridge CAL?
The Bridge CAL Suite provides on premise access to CALs not included in the Office 365 Suites. The CAL Suite
includes Lync, Exchange, SharePoint, Windows Server, System Center Configuration Manager and System
Center EndPoint Protection. Since the Office 365 Suites (E1, E3, E4) permit access to SharePoint, Lync and
Exchange, the bridge CAL covers the remaining technologies so you do not pay twice for these licenses.
If you have an existing Open Business or MOSP agreement for Office 365, you will need to start fresh when
you purchase an EA. So if possible, it is best to enter an EA towards the end of your existing agreement’s
term, so you do not pay for overlapping Microsoft services.

I’m currently enrolled in an EA. What are my licensing options?
Microsoft offers the following options for transitioning to Office 365.
Permitted Transitions
Possible transitions for Enterprise product elections:
The Essential Guide for Licensing Microsoft Office 365™ in the Cloud | O365 Licensing Agreements
Zero Dollar Transition SKUs
You can transition to Office 365 without extra costs if you already have Office Pro Plus. At your next yearly
anniversary date, simply add the zero dollar transition SKU and the appropriate number of Office 365 subscriptions.
The number of on premise Office and CAL Suites will be reduced by the number of E1, E3, E4 and Bridge CALs
you’ve added.
Keep in mind, you must ensure that all of your Office 365 transitions are eligible. For example, if you have Office Pro
Plus, you are not eligible to migrate to an E1 subscription. This is because you’ve already committed to Office Pro Plus,
and the E1 subscription does not include Office Pro Plus. The following chart shows permitted transition options.
PRODUCTS BEING TRANSITIONED VALID TRANSITION OPTIONS
CORE CAL SUITE
• OFFICE 365 (ENTERPRISE E1)*
• WINDOWS INTUNE*
ENTERPRISE CAL SUITE
• WINDOWS INTUNE*
• OFFICE 365 PROPLUS
OFFICE PROFESSIONAL PLUS AND CORE CAL SUITE
OFFICE PROFESSIONAL PLUS AND ENTERPRISE CAL SUITE

The following chart outlines permitted add-ons depending on your current EA.
Office 365 Add-ons
Microsoft allows you to add Office 365 to your existing agreement. This add-on is a per-user/per-month additional
line item that will be billed for the amount of months remaining in your agreement. In order to take advantage
of this you must have a CAL Suite and Office on your existing agreement. Note that you cannot exceed the license
counts for your existing Office, Core/ECAL license counts. Upon renewal, you have the option to continue with how
you are currently licensed (with the add-ons), transition fully to the cloud or move to back to on premise.
The Essential Guide to Licensing Microsoft Office 365™ in the Cloud | O365 Licensing Agreements
OFFICE 365
ADD-ONS
E4 Add-on $3.50
E3 Add-on $2.00
E4 Add-on $7.00
E3 Add-on $5.50
E4 w/o ProPlus $7.00
E1 $4.00
EA LICENSE
POSITION
ECAL
+
OFFICE
CORE CAL
+
OFFICE
CORE CAL
+
OFFICE 365
PROPLUS CORE CAL
ONLY
O365 PROPLUS
SUBSCRIPTION
Exchange plan 1 $2.00
Lync plan 1 $1.00
SharePoint Plan 1 $1.50
Exchange plan 1 $2.00
Lync plan 1 $1.00
SharePoint Plan 1 $1.50
Can I purchase individual components such as Lync, Exchange or SharePoint Online?
You can purchase components on an ad-hoc basis because they don’t require standardization across the
agreement. These can be purchased as additional products on your EA under the Microsoft Products and
Services Agreement. The Microsoft Online Subscription Program is another viable option, however, it does
not offer volume discounts.
I’m Renewing an Enterprise Agreement. What Are My Office 365 Licensing Options?
Renewing an agreement is your opportunity to start fresh and think ahead about the next three years. Even if
an immediate move to Office 365 isn’t a part of your plan, including Office 365 under your new agreement is
worth considering. Doing so will allow you to move to Office 365 at the time best suited to your organization
while amortizing the cost of the licenses and Software Assurance over the three-year agreement term. Whatever
you decide, it is important to talk through your options to ensure your organization is set up with the correct user
profiles (ie. Choosing between or mixing the E1, E3 and E4 Suites) in order to accommodate the addition of new
users in the future.

r OFFICE 365 POTPOURRI
How do I License Office 365 for the iPad?
Apple allows free downloads of Word, Excel and PowerPoint from the iTunes store. The apps offer the same
functionality as their desktop-based cousins. While you may use this free version to view files, you need an
Office 365 E3 or E4 subscription to use them to edit and create work.
To license Office 365 for the iPad, you need an E3 or E4 subscription that includes Office Pro Plus. You
may also purchase a stand-alone agreement for Office Pro Plus for Office 365. Users who have Office 365
subscriptions may run Office on up to 15 unique devices. The breakdown is up to five desktop or laptop
devices, up to five tablet devices and up to five mobile phone devices. To access these installations,
download Office 365 from the iTunes store and enable full features through Office 365 login credentials.
If I don’t like the cloud, can I go back?
If you have purchased on-premises licenses and have Software Assurance (SA), you may go back to an
on-premises model with Software Assurance at any time without having to rebuy the license.
Is it true Office 365 only streams from the cloud?
Office 365 is a local install and doesn’t ‘stream’ from the cloud. You are entitled to install on up to 15 devices.
Do I have to move to the latest version of Office when Microsoft releases an update?
You have 18 months to adopt Office Pro Plus for 365 after Microsoft releases the updates. You can run side-by-side
installs of your perpetually owned and cloud versions of Office Pro Plus.
Is there a home use program for Office 365?
Yes. You are entitled to run Office Pro Plus on up to 15 devices per user. This includes desktops, laptops, tablets
and mobile phones. (See Licensing Office 365 for the iPad above for a complete breakdown) This allows users to
access Office whether they are in the office, at home or on the road.

t GETTING IT RIGHT
Whether you are looking at a new agreement, approaching the end of your term or
want to move to the cloud mid-agreement, it’s worth contacting an expert. Softchoice
offers free consultations that:
ü Lower your total cost of ownership and improve workplace productivity by
standardizing Office 365 across your organization
ü Assess the size of user base to determine the best licensing program
ü Determine the optimal mix of cloud vs. on premise installations
ü Determine if you qualify for a transition or Core CAL Bridge
ü Receive the best possible discounts on moving to Office 365
Ease your transition to Office 365.
Contact your Softchoice account manager or call 1-800-268-7638.
Related guides in this series
» Operation Migration
» How to choose a migration partner

About Softchoice.
With over 40 locations across the U.S. and Canada, Softchoice
is one of North America’s largest providers of IT solutions and
services. The company’s holistic approach to technology includes
solution design, implementation, and managed services.
Through unique offerings like Softchoice Cloud, and deep
expertise in Microsoft Office 365, Softchoice makes it easy for
organizations to source, implement, and manage the right cloud
solutions for their business.
©2014 Softchoice. All rights reserved.
All trademarks are the property of their respective owners.
»How to choose a Microsoft Office 365™ Migration Partner : Moving to the Cloud without Risking
Productivity, Collaboration or Security
»Operation Migration : Six lessons learned from migrating 20,000+ Microsoft Office 365™ mailboxes
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