Understanding Office 365 Licensing

Microsoft Office 365 has its benefits and drawbacks, but it’s a widely adopted solution and is only increasing in popularity. While more companies integrate O365 into their solution set, the question of proper licensing keeps coming up. O365 licensing is noticeably more complex than traditional solutions, making it somewhat confusing when it’s time for organizations to select the best option for their needs.

The Basics of Office 365 Licensing

Choosing the right licensing package is important as it affects what users are allowed to access within the O365 platform (i.e. the amount of collaboration tools your employee base has access to – which can impact productivity and even culture).

If a business only needs to use the cloud version of Office, there are two options: Business Essentials and Enterprise E1. If businesses also want to allow users to install Office Suite applications on their endpoint (for example working in Office in an off-line mode), there are several distinct options. O365 licensing is complex, but there is flexibility in these options. The key is to understand how your users use Office and then find the plan that closely matches your organization’s needs.

The first decision is, do you fit into a Business Plan or an Enterprise Plan? If you have more than 300 users, you must select an Enterprise Plan as Business Plans only support up to 300 users.

Office 365 Licensing & Virtual Desktops

If you plan to install the desktop version of Office on virtual desktops, persistent virtual desktops are licensed differently from non-persistent desktops. (If you plan on having employees only use the online version of O365 these considerations are not an issue.)

For persistent virtual desktops, users get the same desktop at each login. If you have the desktop version of Office installed, you can allow users to install desktop, tablet or phone versions on four other devices (the virtual desktop installation will count as one of five allowed devices).

Since non-persistent desktops can lose any unique identifiers upon log off, users essentially get a new desktop at each login. For non-persistent virtual desktops that have desktop Office applications installed, Microsoft looks at this as “Shared Use.” As multiple users are accessing the same virtual desktop, they are also sharing the same locally installed Office applications. Because of this, using technologies such as Linked Clones in a floating desktop pool require Microsoft’s Shared Computer Activation (SCA) mode, which licenses the device (this model ties the license to the device, not the user). SCA is only available with Enterprise ProPlus, E3 and E5 plans. Under SCA, the virtual desktop is temporary activation and does not count against a user’s five licensed devices.

Note, if you use RDS to connect users to their virtual desktop, they also need SCA mode activated.

Breakdown of O365 License Plans

The following charts illustrate the Business and Enterprise Plan options for Office 365 to help you better understand each option and the best use cases.

Office 365 for Business (up to 300 users)

See all business options and features, including pricing.

Office 365 for Enterprise (unlimited max. number of users)

See all enterprise options and features, including pricing.

Can Service Providers Offer O365 Licensing?

Service providers can typically offer desktop versions of Office Suite under a Service Provider License Agreement (SPLA). Service providers can only offer O365 licenses if they are a Cloud Service Provider (CSP). In order for a service provider to be a CSP, they have to also provide Office 365 Technical Support.Can Service Providers Offer O365 Licensing?

In order for a service provider to offer SCA, they have to be an Authorized Microsoft SCA Partner, which adds SCA specific terms to a SPLA agreement.

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