Buy-out Subscription Licences

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One of the customers during a recent Microsoft Volume Licensing training event asked for some clarification around their Enterprise Agreement Subscription (EAS).  As the name suggest, EAS licences are non-perpetual, the customer only rents them so at the end of the agreement term, typically 3 years, the customer can either renew the agreement, uninstall the software or buy-out the subscription licences to make them perpetual.

There are two categories of product within the agreement; enterprise (or platform) products and additional products.  The enterprise products are so-called because they must be taken enterprise-wide – every qualified device must have a licence so if the customer wants to licence Windows 8.1 through their EAS, every qualified device the customer owns must be included, they couldn’t just licence 100 out of 500 pcs.

The agreement states that should a customer wish to buy-out their subscription licences, all enterprise products must be bought-out and additional products, such as SQL Server can be bought-out as required.  But many people interpret this as the enterprise products must be bought-out in order to buy-out the additional products.

The best place to check is the agreement document itself.  Take a look at the Corporate “Enterprise Subscription Enrollment” form that is signed for EAS customers and section 6 (End of Enrollment term and termination) states “If Enrolled Affiliate elects not to renew” and then goes on to offer the buy-out option “(i) Subscription Licenses buy-out. Enrolled Affiliate may elect to obtain perpetual Licenses as described in the Section titled ‘Buy-out option’ for Licenses in which a buy-out is available.”

The Buy-out clause (Section 2, paragraph g, clause v) details that

“The buy-out order must include Subscription Licenses for:

(1) Qualified Devices and Qualified Users added during the final year of the Enrollment term; and

(2) any Additional Products used by Enrolled Affiliate for which it has not yet placed an order; and

(3) either of (sic) both of the following:

1) for all Enterprise Products which allow buy-out, the number of perpetual Licenses equal to the total number of Enrolled Affiliate’s current Qualified Devices or Qualified Users for such Products, and/or

2) For Additional Products, the number of perpetual Licenses Enrolled Affiliate elects to obtain.”

Firstly it looks like there’s a mistake in the form on part 3 and it should say either or both of the following.  So if a customer wants to buy out any of the enterprise (platform) products then they must buy-out all of those products.  However they can instead buy out just additional products and there’s no need to buy out the complete order of additional products.

Finally, how do you know which products are enterprise and which are additional?  Check the Microsoft Volume Licensing Product List or attend one of our Licensing Training Courses.