General information about perpetual licensing


TABLE OF CONTENTS

Purpose of guide

This guide was created to explain perpetual licensing and to help you better understand the differences in perpetual licensing.

 

General information

Microsoft has 2 types of purchasing options available in CSP for products such as Office ProPlus and SQL Server. These are commonly known as “software subscriptions” and “perpetual software.” 

 

Software subscriptions can be used in both cloud and on-premises environments but are paid upfront and are valid for 1 or 3 years. 

 

Perpetual software is designed for on-premises environments and is owned by the customer permanently. In the Cloud Solution Provider (CSP) program, the software is license-only (L-only) and does not include the option to add Software Assurance (SA). This means the software cannot be used in a public cloud like Microsoft Azure.

 

Terminology

  • CAL: Client Access Licenses
  • DC: Data Center
  • Perpetual licenses: Buy once, own forever. Not to be confused with Open Value subscriptions or volume licensing. Does not come with Software Assurance (SA).
  • Physical server: A physical hardware system.
  • Physical processor: A physical chip that is housed in a socket within the physical server that contains one or more cores.
  • Physical core: A mini server inside the server, a physical core is a smaller processing unit within the physical processor of the server and is found in groups of 2.
  • Proc: Processor
  • RDS: Remote Desktop Services
  • SA: Software Assurance. Microsoft Commercial Licensing customers with active Software Assurance get more out of their Microsoft software and services investments with access to a unique set of technologies, services and license rights to help use Microsoft products efficiently. There are many other benefits to having SA, the definition provided here is a general overview.
  • SQL: Sequel Server is used to store data and retrieve it upon the request of other software applications.

 

Most common licensing scenarios

CHEAT SHEET FOR THE MOST COMMON PERPETUAL (OPEN, OPEN BUSINESS) LICENSING SCENARIOS

  1. Perpetual licenses do not come with Software Assurance (SA), so there are no updates or lower cost for upgrading to a new version when it is released.
  2. Downgrade rights: Server 2025 licenses can only be downgraded to either Server 2022 version or 2019 version. Licenses can only be downgraded along the same path. Server Standard cannot be downgraded to Server DC, for example.
  3. CALs (Client Access Licenses) are backward compatible. 2025 Server CAL will work with Server 2019. However, the opposite is not true: a 2019 CAL will not work with Server 2025.
    1. If required to downgrade the server to be compatible, contact Microsoft’s Clearinghouse team at 1-888-571-2048.

SERVER STANDARD CORED LICENSING REQUIREMENTS

  1. All physical processors/physical cores must be licensed.
  2. Every time a server is licensed, 2 Virtual Machines (VMs) can be spun up and they will be considered fully licensed.
  3. If more than 2 VMs are required, physical cores need to be licensed again which gives the right to 2 more VMs.
  4. Microsoft defines a server as having a minimum of 8-core licenses per physical processor and a minimum of 16-core licenses per server. If you have 1 processor and 8 cores, for example, the 16-core license must still be bought.
  5. If a server has more than 2 processors and/or more than 16 cores, each additional processor and/or core must be licensed. There are 2-core license packs and 16-core license packs.

    Example 1: Server has 4 processors, 8 cores each: 2 x 16-core licenses required.
    Example 2: Server has 4 processors, 12 cores each (48 cores total): 3 x 16-core licenses required. As long as all the physical cores in the server are covered, the processors will be licensed by default.

  6. To adhere to Microsoft compliance rules, every user or device that touches the server needs to have a Client Access License (CAL).

    CALs can be:
    1. User CAL: Each CAL is assigned to a unique user. No two people can share a CAL.
    2. Device CAL: Each CAL is assigned to a unique device. Each device can be used by multiple people.

SERVER DC CORE LICENSING REQUIREMENTS

This license is for highly virtualized environments and the break-even point in cost vs. benefit is around the 10:1 mark (10 VMs per server).

 

The requirements are the same as Server Standard.

 

The main difference between Server Standard and Server DC is that every time a server DC is licensed, it’s allowed to spin up unlimited Virtual Machines (VMs) and they will be considered fully licensed.

  1. To adhere to Microsoft compliance rules, every user or device that touches the server needs to have a Client Access License (CAL).

    CALs can be:
    • User CAL: Each CAL is assigned to a unique user. No 2 people can share a CAL.
    • Device CAL: Each CAL is assigned to a unique device. Each device can be used by multiple people.

RDS (REMOTE SERVER DESKTOP SERVICES) SERVER

  1. Remote Desktop Server 2019 will be a server role in Windows Server 2019, meaning once you’ve bought a Server Standard Core or DC license, the RDS license will be included.
  2. To adhere to Microsoft compliance rules, RDS CALs are required to access an RDS server. Every user or device that touches the RDS server needs to have an RDS Client Access License.

    RDS CALs can be:
    1. RDS User CAL: Each CAL is assigned to a unique user. No 2 people can share a CAL.
    2. RDS Device CAL: Each CAL is assigned to a unique device. Each device can be used by multiple people.

  3. RDS CALs are not the same as Server CALs.
  4. There is a licensing grace period of 120 days during which no license server is required. Once the grace period ends, clients must have a valid RDS CAL issued by a license server before they can log on to an RD Session Host server.

SQL SERVER LICENSING

SQL (also pronounced sequel) Server is offered in 2 main editions:

Standard Edition licensed on a per core + CAL model:

  1. All physical processors/physical cores must be licensed.
  2. To adhere to Microsoft compliance rules, SQL CALs are required to access a SQL Server Standard and be compliant with Microsoft’s rules. Every user or device that touches the SQL Server Standard needs to have a SQL Client Access License.

    SQL CALs can be:
    1. SQL User CAL: Each CAL is assigned to a unique user. No two people can share a CAL.
    2. SQL Device CAL: Each CAL is assigned to a unique device. Each device can be used by multiple people.

Enterprise Edition is licensed on a per core model only. All physical processors/physical cores must be licensed. Does not require CALs.

 

FAQ 

  1. Where can M365 perpetual licenses be sold?
    Sherweb can only sell these licenses to customers and partners in Canada or the United States. We are unable to sell them to our European customers and partners.

  2. What are software licenses (also known as perpetual software) in CSP and what products are available?Perpetual software licenses are for on-premises Microsoft products, such as Office Pro Plus or SQL Server, that a customer acquires in perpetuity. In the Cloud Solution Provider (CSP) program, the software is license-only (L-only) and does not include the option to add Software Assurance (SA).

  3. What is the difference between "software subscriptions" and "perpetual software"?
    Software subscriptions have annual recurring fees (1-year and 3-year) for Windows Server and SQL Server. Software subscriptions can be used on-prem and in the cloud.

    Perpetual software is a one-time purchase but can also include options for Windows and SQL Servers. Perpetual software can only be used for on-prem environments.

    Please make sure that your clients know the difference.

  4. Is it possible to get a volume discount on software licenses for CSP customers?
    Volume discounts from Microsoft are not available for software licenses sold through CSP.

  5. How else will partners in CSP be compensated for software licenses purchased within CSP?
    Any available incentives programs will be separately communicated to qualifying partners.

  6. What happens if pricing changes during the term of a software license?
    The cost is set at the time of transaction, and any price changes would apply to subsequent purchases of licenses.

  7. What is the minimum customer purchase commitment?
    There is no minimum purchase commitment for customers purchasing in CSP.

  8. Is there a limit to how many licenses a customer can purchase in CSP?
    There is no limit to how many licenses a customer can purchase in CSP. However, since there is no volume licensing discount in CSP, partners should explore options for large customers or customers with existing Microsoft Volume Licensing agreements to determine the best pricing option.

  9. How will the partner be billed for software licenses purchased in CSP?
    The billing will follow the normal process at Sherweb and you will find the invoice in the partner portal.

  10. Can a partner make payment installments for software licenses purchased in CSP?
    No. Full payment is required upfront.

  11. Can software licenses be returned or exchanged?
    In alignment with CSP policy for software products, software licenses purchased in CSP may be returned within 30 days of purchase for a refund. Partial returns are not allowed and beyond the 30 days, no returns or exchanges are allowed. Sherweb will charge a 5% fee for any cancellations processed by Sherweb and keys will be deactivated.

    Exchanges do not apply to software licenses purchased in CSP.

    As of November 2019, partners must contact Sherweb to cancel software subscriptions, as cancellations cannot be processed directly through Partner Center or the Partner Center API.

  12. Can software licenses be transferred between customers?
    No. There are no transfer capabilities within CSP.

  13. Is there a purchase limit?
    You can purchase up to 50 licenses for the same perpetual license offer per transaction. If you want to purchase more than 50, simply complete the purchase in two (or more) separate transactions.

  14. How do I purchase a perpetual software license? 
    Please refer to our Knowledge Base (KB): How to purchase a Perpetual License with Sherweb

  15. How do I cancel my purchased software license?
    If you are within 30 days following the purchase of your perpetual software licenses, please contact us at [email protected] and our billing support team will be able to assist you in cancelling your software license(s).

    Note that a 5% cancellation fee will be deducted from your refund, and the keys will be deactivated.

  16. I’m unable to purchase software licenses through Cumulus. How do I get assistance?
    Please contact your Account Manager. If you do not have an account manager, please contact [email protected].

  17. I’m unable to purchase the non-profit or educational offer. Why is that? 
    Only organizations who were granted a special qualification from Microsoft can purchase these licenses. For additional information, please contact your Account Manager.

  18. Can Government Cloud Community (GCC) tenants purchase perpetual licenses?
    No, Microsoft does not allow the purchase of perpetual licenses for GCC customers. For additional information, please contact your Account Manager.

  19. Can I purchase perpetual licenses and regular subscriptions in the same transaction? 
    Because they are different types of licenses, this is currently not possible. You will need to complete the purchases through separate transactions.

  20. How do I activate the licenses following the purchase? 
    Please refer to our KB - How to download the keys.

  21. Can the CSP relationship be terminated between the tenant and Sherweb if a perpetual software subscription was purchased in the past? 
    No, but the Granular Delegated Admin Privileges (GDAP) relationship can be terminated.

  22. Can I add a purchase order number when purchasing perpetual licenses?
    There is currently no way to include a purchase order number at this time. We will keep you posted should this change.

  23. Can I map perpetual license purchases in my PSA integration? 
    No. They should appear in the offer mapping page of the PSA integration with the mention 'not supported'.

  24. Can I generate KMS keys with my purchase?
    No. CSP purchases are activated with a multiple activation key (MAK). Key management service (KMS) keys aren’t allowed, even upon request.

  25. Can I increase the activation limit of my key?
    In some situations, yes. You may consult this official Microsoft guide which explains which product has activation limits and in which scenarios it can be increased. CSP software key activations

    If you believe you are in a supported scenario, you may open a Sherweb support ticket for the request.