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Licensing Microsoft Online Services
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Licensing Microsoft Online Services

Rather than the services being installed on the organization's own servers, with Microsoft Online Services, the services are installed on Microsoft's servers which users access across the Internet. This makes Microsoft the service provider which hosts and manages the software on behalf of the customer.
In some cases, the Online Service is completely hosted by Microsoft and users only need a Web browser to access the content. However, some Online Services include client software that delivers or enhances the use of the Online Service. This client software is installed locally on users' machines, and accesses an Online Service which is managed by Microsoft.

Software as a Service (SaaS) is the term often used to describe a technology which is available as an Online Service.

Because Online Services are licensed as subscriptions, the latest version is the only active version at any time. The customer is entitled to updates and upgrades as they become available during the subscription term.

Because Online Services reside remotely with a service provider, they must be "activated" before they can be used.
  • Microsoft Online Services are offered on a subscription basis. Therefore the licenses and accompanying software are non-perpetual
  • Rights to access and use the Online Service, and install and use the related software, are available only during the subscription term
  • At the end of the term, customers can either continue the subscription or let it expire
There are two types of licensing available for Microsoft Online Services:
  • Microsoft Online Subscription Program (MOSP). Customers can purchase subscriptions to Online Services through the Microsoft Online Customer Portal (MOCP), and details are covered in a separate reference document in this series.
  • Volume Licensing Online Services can be licensed through the existing Volume Licensing programs, making it convenient for customers to be able to purchase both their Microsoft software licenses and Online Services under the same agreement. This document focuses on this license type.

    For small and medium sized customers, availability is through Open Value only. Similar to CALs, five subscription licenses are sufficient to qualify for the minimum purchase requirement for Open Value.

    For larger customers, availability is through Select, Select Plus, Enterprise Agreement and Enterprise Subscription Agreement programs.
  MOSP Open Open Value /
Open Value Subscription
Select / Select Plus Enterprise Agreement / Enterprise Subscription Agreement Campus / School Agreement
Forefront Client Security USL/DSL    
Forefront Protection for Exchange Server USL/DSL    
Forefront Protection for Exchange Server USL/DSL

Forefront Security for Office Communications Server (OCS) USL/DSL
Forefront Online Protection for Exchange USL/DSL    
Forefront Threat Management Gateway Web Protection Services USL/DSL    
Forefront Protection Suite USL/DSL    
OCS Public Instant Messaging Connectivity USL      
Office Live Meeting Standard and Professional USL

Office Communications Online Standard USL
Exchange Online Standard USL          
SharePoint Online Standard USL          
Business Productivity Online Services Suite (BPOS) USL      
SharePoint Online Deskless Worker USL        
Exchange Online Deskless Worker USL

Deskless Worker Suite USL
BPOS Components Step-up USLs

BPOS Suite Step-up USL
BPOS Components Extra Storage USLs      

These are the license types which are unique to the licensing of Online Services. Note that not every type of license is required for each Online Service.

  • A USL (User Subscription License) is required to enable the functionality of an Online Service for a particular user. It is assigned to the user and allows that user to use multiple devices to access the Online Service
  • Integrated Content Management (requiring Microsoft® SharePoint® Server)
  • Instant Messaging and presence support (requires Microsoft® Office Communications Server)

The Microsoft Office desktop products (including, for example, Microsoft® Visio®) are licensed per device.

Note that Office 2010 editions consist of more than one product offered under a single license and the software may not be separated for use on more than one computer.


Pricing for Online Services is monthly. To determine the total amount of the subscription, multiply the price of the subscription by the number of months of the agreement or subscription.

Pricing is constant throughout the subscription term so that in the event of a price decrease or increase, customers pay the same monthly price until they renew their subscription.

Coterminous and One-Year Subscriptions are the two options available for Online Services through Volume Licensing:
Cotermious Subscriptions align with the underlying Volume Licensing agreement expiration. The customer can pay upfront, annually, or, for Open Value only, monthly. If the customer orders the Online Service at the beginning of the agreement then it obviously aligns perfectly with the agreement expiration. If the customer orders the Online Service after the agreement start (for example at month 9 in a 36 month agreement), then annual payment is as follows:

The same principle is used if orders are increased (shown in green).
VOLUME One-Year Subscriptions always last for 12 months and can be ordered at any time during the agreement and can expire after the expiration of the agreement. The customer can pay upfront, or, for Open Value only, monthly.

You can see in this example that the customer has ordered the Service with only 9 months remaining on their agreement and so the subscription extends beyond their Volume Licensing agreement. However, if the order is increased (shown in green), it must align with the original One-Year Subscription.
Customers can automatically renew their Online Services while their agreement is active. There are two types of renewals:
  • Auto Renew: This is the default option for commercial customers
  • Non-Auto Renew: This is the default option for public sector customers

Customers can change this default option if they prefer.

Orders for Microsoft Online Services can be canceled within 30 days of placing the order. After 30 days, orders cannot be canceled until the end of the subscription term. For example, after 30 days even if the customer is no longer using the online service, they will continue to be billed for it until the end of the subscription term. Similarly, if the customer signs up 50 users for an online service, they cannot reduce the number to 25 users until the end of the subscription term, at the time of renewal. The exception to this is Open Value Subscription and Enterprise Subscription Agreements where customers are able to reduce their order at each anniversary.
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