May 12, 2015 asksam

Ask Sam – Microsoft partner in peril: 5 Key lessons to learn

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Dear Sam, My company has a number licenses we are entitled to because we are Microsoft Certified Partners. I know there are additional restrictions to these licenses and I want to ensure that if my company is audited that these don’t become a liability rather than a benefit. Can you suggest some things I should do to ensure these licenses are managed properly? Thanks,

Partner in Peril

Ask Sam Dear Partner in Peril,

As the saying goes, nothing in life is free, but the Microsoft partner licenses are a nice benefit if you are careful with their management. Let’s take a look at some of the key items you should be aware of and ensure you are managing:

  • Review your server portfolio first – Servers are where you will likely see the highest liability. Licenses for SQL server can be costly and organizations are often reluctant to upgrade server software if everything else is working properly.
  • Ensure you are on the latest release – The Microsoft Partner licenses are designed to allow partners to highlight the latest and greatest Microsoft software. As such, partner licenses do not support downgrade rights and there is a one year grace period from a product release before the latest version is the only version a partner is entitled to use. You can find the release dates of Microsoft software here.
  • Know how the software is used – Partner licenses are only allowed to be used for general internal business purposes and not for any type of commercial purpose. This can be tricky because businesses are run to be “commercial”, but the basic concept is – e-mail server for use by employees – that’s OK, e-mail server that you provide as a service to customers – that’s not OK.
  • Know where the software is used – There are numerous restrictions on where software can be used, for example, demonstration software can be installed on your organizations machines, but not on the customer’s machines. Also, you cannot allow your employees to install partner licenses on their home computers.
  • Be aware of virtual environments – The partner licenses do not provide the same set of virtualization rights that you might be used to if you are used to dealing with Software that is licensed with Software Assurance.

I’ll go more in-depth on each of the above points, but please make sure you log into your Microsoft Partner page and search for the Microsoft Partner Network Product Usage Guide to Software and Cloud Services Benefits (MPN) – note, you may need to search for Product Usage Guide on the website to find the latest version of this document.. If you’re familiar with the Microsoft Volume Licensing Product Use Rights (often referred to as the PUR), the MPN document is the equivalent for partner licensed software.

One critical detail to be aware of if you do get audited and you are found to be out of compliance with your partner licenses, you may have a bigger liability than you think. For example, if your organization is using an older version of Exchange and a newer version was released more than 1 year prior. In this case, the entitlement to use the later version of Exchange does not apply and there is no upgrade license, or SA option you can purchase to become compliant. When this occurs, you are simply using a software title you are not entitled to use. In this instance, to become compliant, your organization will need to purchase the correct version and edition of the product licenses required, or purchase the latest version with Software Assurance on those licenses to support downgrade rights.

As in any license review situation, your mileage may vary and it’s generally suggested that you work closely with the organization doing the review to come to the outcome that meets the goals of all organizations involved.

Now, let’s look at these issues in a bit more detail.

Review your server portfolio first

This advice is true for most environments and most licensing plans. If you want to prioritize your license review process, start with the servers. The reason for this is twofold – first, server software is typically much more expensive than client software. Second, once you start your discovery process, you’ll be amazed at how much server software is used. Organizations run on their data and the infrastructure required to use and manage that infrastructure is very costly.

Because of the criticality of server environments, organizations are often reluctant and sometimes even unable to upgrade these systems as well. Remember, though, that partner entitlements to all software licenses is what I might term a rolling entitlement and all systems that rely on partner licenses must be on the latest version of the software. There are situations where underlying software cannot be upgraded within the year. For example, if your company uses a 3rd party tool that is reliant on Microsoft SQL Server, but that third party take more than 1 year to release an update that supports the latest version of SQL – your organization is forced into an out of compliance position. Be careful how you apply the partner licenses to ensure you aren’t forced into a compliance problem by a 3rd party.

Ensure you are on the latest release

Microsoft wants all partners using partner licenses to be running the latest and greatest releases. This helps Microsoft in their promotion of their software while also providing a benefit to Microsoft Certified Partners. What this means for the ITAM, SAM or SAO manager is that they are managing a rolling entitlement where the entitlement rights are constantly shifting (I liken this to a mouse in an exercise wheel – which, I know, software asset management often feels that way, but the partner licenses exacerbate the issue).

The quote from the MPN is:

As mentioned above, this issue may be more impactful in your server environment where IT may be reluctant, or unable to upgrade to the latest version of software due to a myriad of reasons. You may technically have the right to entitlements for a later version of the software, but if you have the older version installed, you will very likely need to purchase the software titles with Software Assurance to allow for Downgrade rights – and you still have the rights to the newer software versions meaning you are likely significantly over licensed for those titles.

You can find the release dates of Microsoft software here.

Know how the software is used

Software used based on the partner licenses may be used in production for general business purposes within an organization, but may not be used to generate revenue directly. The quote from the MPN states:

Licenses cannot be used for direct revenue-generating activities.

So, ITAM managers must know not only which devices have the software installed, but also how that software is used and if there is a commercial arrangement involved in the structure of how the software is in use within the organization.

Know where the software is used

There are a number of issues to be aware of regarding where the software is used. Licenses may be used internally, but may not be installed on an employee’s personal system. They may be used for customer demonstrations, but may not be installed on customer hardware at a customer site. These rules are not particularly difficult to apply, but they are important to be aware of.

Be aware of virtual environments

Finally, organizations must be aware that some of the virtualized environment support they may see in volume licenses with SA are simply not available with partner licenses. The following details from the MPN indicate:

URL for the Competency license table URL shown in the image above is -

This isn’t necessarily that much of a change from the license you receive for a fully packaged product (FPP) client operating system, but it’s important to be aware that you do not receive additional virtualization entitlements that can be utilized as you would get with a volume license agreement that includes software assurance. If you want to find more information about what’s available in a FPP licensed product, you can find the information here – Note that to find details for Windows 7 or 8, you must select Windows as the product, then the appropriate version and edition after you’ve selected Windows.

One other key item to be aware of when it comes to virtualization – your servers could be more virtualized than you may be aware. These can be particularly problematic based on the server OS you are running and you may find that you have many more SQL server installations in some of these virtualized environments than you realize. It’s critical to make sure that you know which virtual operating system environments (OSEs) are installed on each server and which server OS is installed to validate that you are in compliance with your licensing terms – again, check the MPN if you are using Partner licenses to manage these servers and ensure you know where they are running and how they are used.


In the end, Microsoft Partner licenses are simply another type of license to manage. There are some additional complexities to this license that you may not experience with other Microsoft software (in particular, the fact that you must be on the latest release of the software within 12 months of the release of that software), but the more you know about what to watch for, the easier management of licenses for your organization becomes. Having the source of information for what each license means is often a big percentage of the battle and another big percentage is being able to apply that knowledge on a regular (and preferably automated) basis. The partner licenses provide extremely good value for Microsoft Partners, but must be used with care as they are managed differently – if your ITAM team is up to the challenge, it’s certainly a huge benefit from a licensing perspective.

Resolutely Yours,