Licensing Logic: What Am I Actually Getting by Licensing Office 365?

Welcome to the first in the series of ‘Licensing Logic’. A series of exclusive articles brought to you from the Microsoft Licensing team, specifically for our TechNet audience,

Office 365 is a brand. But we have a challenge to overcome by using that name. Our challenge is that the Office name is so synonymous with Word, Excel, PowerPoint and so on that customers and resellers can get confused with what Office 365 actually is.

clip_image002In a nutshell Office 365 is either the Office suite of client applications (Word, etc.) or online cloud services such as Exchange, SharePoint and Lync or both of those.

Below is a table containing most of the commercial Office 365 options (aka plans) you can buy along with a summary of whether that plan includes cloud services and the Office client. A high-level list of what’s included can be found on


Office 365 Small Business Office 365 Small Business Premium Office 365 Midsize Business Office 365 ProPlus Office 365 K1 Office 365 Enterprise E1 Office 365 Enterprise E3 Office 365 Enterprise E4
Office Client? clip_image004 clip_image004[1] clip_image004[2] clip_image004[3] clip_image004[4]
Cloud Services? clip_image006 clip_image007 clip_image006[1] clip_image007[1] clip_image007[2] clip_image008 clip_image008[1]


The best place to determine the detailed feature demarcation between those plans is via the Office 365 Service Descriptions on TechNet.



Licensing is straightforward with Office 365. Whatever Office 365 plan you have, the licence is per-user. This is a big difference from on premise Office which remains per-device. If you have Exchange, Lync or SharePoint on premise you can choose to licence access to these on a per-device or per-user basis or even to mix and match but the Office 365 cloud services are only per-user.

Why is this? One of the principles of cloud computing is anywhere access and typically the user will travel more than the device. I want to access my services at home, at work, at the airport, around my mum’s house. One in five men have participated in a conference call whilst on the toilet (according to research on It makes sense to licence the user because they can access from any device. I can email from any device, IM and join a video-conference from any device (that supports Lync), get to my files and sites and business intelligence in SharePoint from any device. And if the Office 365 plan includes the Office client, then that can be locally installed on up to 5 devices concurrently and these can be a mix of Windows, Mac, corporate machine or personally-owned PCs.

One other important aspect to Office 365 licensing is the concept of a USL or User Subscription licence. Most Microsoft server software requires a Client Access Licence (CAL) to enable access to the software’s features. Windows Server, Exchange Server, Lync Server and SharePoint Server all require CALs. Office 365 is no exception but we call a CAL a USL because you only subscribe to online services, they’re not perpetual unlike CALs which you don’t need to buy again every year. The monthly, per-user cost of Office 365 includes all the USLs you need however the Enterprise Office 365 plans also include an implicit CAL whereas Midsize Business and Small Business plans do not.


Why is this important? If you have a hybrid infrastructure with some on premise Exchange, Lync or SharePoint servers then your users will need CALs to access those as well as USLs to access their Office 365 services. Having implicit access rights granted within the USL means you do not need to maintain CALS for those users who are covered by an Office 365 plan (one which includes cloud services). This is detailed in the Product Use Rights document for each of the on-premise servers, an example of which is the Exchange Server 2013 Standard requirements below showing that an Office 365 E1, E3 or E4 USL is fine for access but doesn’t list Midsize or Small Business USLs.

In summary, Office 365 is a big beast which can encompass the Office client suite, cloud services or both depending on which Office 365 plan you have. Each plan differs in individual features but is broadly licensed the same way; per-user. A bonus of subscribing to the Enterprise plans that include cloud services is they allow the licenced user access to on premise Exchange, Lync and SharePoint servers without needing a separate CAL.

Join the monthly licensing spotlight call to keep yourself current with updates and changes. Register for the call here using the invite code: A863B6, or why not come to one of our Customer Product and Programme Fundamentals event held in our London office, register here.



Comments (4)

  1. Anonymous says:

    Part of the Microsoft Licensing Logic series from the Microsoft Licensing team. Just when you think Microsoft

  2. Anonymous says:

    Mobility is the new norm. Have you ever checked you email outside of the office? Got a bit of work done in an airport lounge or hotel business centre? If you’re what Microsoft describe as a knowledge worker, then of course you have.

  3. Anonymous says:

    You may have noticed we’re talking past tense here. That’s because Microsoft announced in July 2014, at the Worldwide Partner Conference, that Select Plus would be retired. Let’s examine why and what’s replacing it.

  4. Anonymous says:

    The “Office 365 Service Descriptions on TechNet.” link is broken.

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