Background
Microsoft has 13 different desktop applications available for business users, the most popular being Word, Excel, Outlook, and PowerPoint. All except three of the 13 applications (Project, SharePoint Designer, and Visio) are bundled into at least two of Microsoft’s eight different Office suites.

Price-wise, buying the applications in suites will save you over 50% versus purchasing individual products. But what you get for your money – in terms of the actual software and the software licenses – varies widely depending on the suite and the purchasing channel.

Purchase Criteria
In analyzing which choice is best for you, there are four key criteria to consider:
1. Which applications and features your users actually require
2. Whether or not you need or want Software Assurance
3. The purchasing channel
4. The Office suite edition that’s best for your needs

While the question of which applications and features your users require is pretty self-explanatory, the other items are not. The following is what you need to know about the other three purchasing criteria in order to make an intelligent purchasing decision.

Software Assurance: Is it right for you?
Software Assurance is a subscription for Microsoft’s maintenance program. It is only available for licenses purchased through a volume licensing or OEM channel.

The annual fee for Software Assurance is 29% of the original license price for Office Desktop and 25% for server-related licenses. Some volume licensing programs require the purchase of Software Assurance, others do not.

In addition to some support and training, the main benefits provided by the Software Assurance program are:

• Free Upgrades – Since Microsoft pretty reliably releases a new Office suite about every three years, this means that over three years you will have paid another 87% of the purchase price for the right to have a free upgrade.
• Ability to Purchase Step Up License – If you purchase the lower-end edition of an application and later decide to upgrade to the higher-end edition, the Step Up license will save you money on this transaction.
• Home Use Program – Your employees will be able to install Office suite licenses on their home computers, for the purpose of being able to work from home.
• Multi-Language Pack – Gives you multi-language capability.
• Employee Discounts – Organizations that have Software Assurance can offer their employees an employee purchase program that lets them buy Microsoft products at a 30% discount.

Our advice: If the license you choose does not require Software Assurance, carefully analyze whether or not you would actually take advantage of the benefits that Software Assurance offers.

Purchasing Channels: Overview
There are three channels through which you can purchase licenses for Microsoft’s Office suites: OEM, retail, and volume licensing. The channel that you use will determine how your organization can deploy the product, your ability to use the product in certain ways, and how much you’ll pay for the license.

At first glance OEM or retail may look like the way to go because of their lower shelf prices. But volume licensing has a variety of technical attributes and usage rights that many companies find important, especially if they want to keep their desktop management costs under control. For our clients we nearly always recommend some type of volume licensing.

There are three families of volume licensing:

1. Open: For small and mid-market companies with less than 250 PCs
   • Offers 10 to 40% discount off of retail price, with the discount based on the size of your single purchase
   • Does not require purchase of Software Assurance
2. Select: For companies with more than 250 PCs
   • Offers 25 to 50% discount off of retail price of most Microsoft products, with the discount based on your annual purchase volume
   • Does not require purchase of Software Assurance
3. Enterprise: For very large organizations
   • Offers up to a 60% discount off of retail price
   • Requires commitment to purchase an Office suite, bundle of Client Access Licenses, or Windows Desktop OS upgrade for all PCs in the organization
   • Requires purchase of Software Assurance (it is included in the price of the Enterprise agreement)

The Benefits of Volume Licensing
Volume licensing gives you a lot more flexibility and offers a multitude of benefits versus purchases made through the OEM or retail channel:

• Provides 1 Key for All Your Licenses – If you purchase through the OEM or retail channel, you will receive separate serial numbers (or “keys”) for each license. Volume licensing provides 1 key for all copies. This avoids the administrative hassle of keeping track of numerous serial numbers and makes an automated deployment easy.
• Runs on Terminal Servers and Desktop Virtual Machines – An OEM or retail license gives you the right to run a local copy of Office but not a remote copy. The only way to license Office in an environment that uses Terminal servers or servers hosting desktop VMs is to purchase a volume license.
• Includes Downgrade Rights – If you purchase Office 2007 through volume licensing you have the right to install earlier versions of Office instead – a useful feature if you want your new employees to use the same software as the rest of your organization, and you’re not yet ready for a system-wide upgrade to Office 2007.
• Includes Multiple Instance Rights – Allows you to run multiple copies of Office from the same licensed device, something you may want to do if you have applications that will only run on the older versions of Office.
• Provides Platform Independence – Runs on PCs or Macs.

Choosing the Right Edition of Office Suite for Your Needs
There are eight different editions of Office suite, each of which includes a different subset of the 10 different applications. To make it even more complicated, each of the applications comes in both “standard” and “premium” editions, with the premium editions having special features that relate to SharePoint server integration and Active Directory rights management.

Click here for a comparison chart showing which applications are included in each of the suites. The available purchasing channels for these suites are as follows:

• Basic – OEM
• Home & Student – Retail, OEM
• Standard – Retail, Volume Licensing
• Small Business – Retail, Volume Licensing
• Professional – Retail, OEM
• Ultimate – Retail, OEM
• Professional Plus – Volume Licensing
• Enterprise – Volume Licensing

If you need SharePoint integration or Active Directory rights management, you’ll need to purchase the Ultimate, Professional Plus, or Enterprise suite, as these are the suites that include the premium versions of Excel, PowerPoint, Outlook, and Word.

Conclusion
There’s a lot to consider when purchasing licenses for Microsoft’s Office suites or desktop applications. If you need some help sorting it all out, give us a call. We’re here for you.

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