Judging from the questions we continue to be asked, lots of people are confused about how to license the Microsoft Office Suite if you are accessing it via Microsoft’s Remote Desktop Services (a.k.a. Terminal Services) and/or Citrix XenApp. Hopefully, this will clear up the confusion.

First of all, it is important to keep in mind that desktop applications such as the Office Suite are licensed per device, not per user. The following comes directly from the Microsoft “Product Use Rights” document dated January, 2010: “You must acquire a license for each device on or from which you access or use the software (locally or remotely over a network)…You may access copies of the software installed on a network device only from a device that has a license for the software.”

In other words, if you can walk up to a device and use it to interact with an Office application, you must have an Office license for that device. It doesn’t matter whether that device is a PC or laptop that has the Office bits installed on its local hard drive, or whether it is a thin client device that allows you to connect to a XenApp server, you need to have “assigned” a license to that device.

That begs the question of what “assigned” means, and the answer – particularly for devices like thin clients, where you couldn’t install the application locally if you wanted to – is that you are on the honor system. You decide, in the privacy of your own conscience, which licenses you are assigning to which devices – with the caveat that, if you’re ever audited, you’d better be able to produce a license for every device people are using to run Office apps. You can reassign a license from one device to another, but not more often than every 90 days.

But that’s not all. Quoting again from the Product Use Rights document: “The device you use to remotely access software must be licensed for the same or higher edition, but not a lesser edition.” That means that if you have Office Professional Plus installed on your XenApp server, you are not entitled to access it from a device that only has an Office Standard license assigned to it (because it’s a “lesser” edition); but you are entitled to access it from a device that has an Office Enterprise license assigned to it (because it’s a “higher” edition). Likewise, if you have Office 2007 installed on your XenApp server, you are not entitled to access it from a device that is only licensed for Office 2003 (or any other earlier edition).

You do not, never have had, and probably never will have the right to access Office on a XenApp server from a device that has an OEM Office license installed on it. If your PC or laptop came from the manufacturer with Office pre-installed on it, then you have an OEM license, and you do not have “network storage and use” rights. There is an excellent blog post over on the Microsoft SMB Community Blog that explains this in detail. Yes, it’s an old post (from July, 2005). No, the policy hasn’t changed.

Basically, it comes down to this: Why do people tend to purchase Office bundled with their new PC? Because it’s less expensive. Why is it less expensive? Because the license you’re buying contains fewer usage rights than more expensive licenses. You do not have the right to transfer that license to a different PC – it dies when the PC you bought it with dies. You typically do not have the right to downgrade it to an earlier version. And you don’t have the right to access the application over a network.

However, there is a way for you to obtain those rights if you buy an OEM license. Microsoft allows you to purchase Software Assurance for your OEM license within a 90-day window of acquiring the license. (It’s one of only two cases where you can purchase Software Assurance as a stand-alone purchase – the other case is when you’re renewing it.) Software Assurance will do a number of things for you:

• It removes pretty much all of the OEM license limitations, e.g., you now have the right to transfer the license to a different PC, the license will survive the demise of the hardware, and you gain network use rights.
• You get upgrade protection for the term of the Software Assurance coverage (two years if purchased on an Open Business agreement, three years if purchased on an Open Value agreement).
• You gain “Home Use Rights.” For each Office license covered by Software Assurance, you have the right to designate one employee who can install Office on his/her home PC. (Which, by the way, would then give them the right to access Office on your XenApp server when they’re working from home.) These Home Use Rights evaporate if you allow your Software Assurance coverage to lapse. Also, the employee loses his/her right to run the software if they leave your employ.
• You probably qualify for some e-learning benefits as well.

Bottom line: Volume Licensing is your friend. If you’re planning to deploy Office via Remote Desktop Services (with or without XenApp), the right thing to do is buy your Office licenses through a Microsoft Volume License agreement. In fact, last time I checked, you couldn’t even install Office on a Remote Desktop Server unless you were installing from Volume License media. If, for convenience, you want to buy OEM licenses with your new hardware, you should also budget for adding Software Assurance to those licenses, or you’re probably not going to be happy with the limited license rights.

One final item: The license terms for Volume License editions of Office include something called “Portable Use” rights. Quoting again from Microsoft: “You may install a copy on a portable device for use by the single primary user of the licensed device.” In other words, if you have purchased an Office license for Joe’s or Mary’s desktop PC, and Joe (or Mary) also has a laptop, you are entitled to install Office on that laptop (the “portable device”) without having to purchase an additional license. By extension, since that laptop is now legally licensed, it could then be used to remotely access the Office apps via XenApp from wherever Joe or Mary may happen to be.

Disclaimer: I do not work for Microsoft, nor do I define their license terms, which are subject to change, particularly when new product versions are released. I have, however, worked with them for a very long time, and had lots of discussions about what is, or is not, legal under the terms of various license models. The foregoing is my own interpretation of information that is publicly available on the Microsoft Web site – and I have helpfully provided you with links to that information. I highly recommend that, if you have any questions, you download the Product Use Rights document and read it for yourself.