The Benefits of Volume Licensing: Discounts and More

By Jeff Wuorio

There are precious few slam dunks in the world of running a small business. But volume licensing of software products is one of the notable, if misunderstood, exceptions. In a universe where cost control and options are often few and far between, volume licensing offers a hard-to-beat combination of dollars saved and flexibility.

“Once small-business owners really come to understand what volume licensing is, it just makes all the sense in the world,” says Eric Ligman, business development manager for Microsoft’s small-business segment. The rub is in knowing precisely what volume licensing really means, says Ligman, who acknowledges that the term is not clearly understood among many.

Volume licensing can be likened to bulk discount acquisitions, only the “bulk” isn’t necessarily required. Rather than purchasing necessary software on an as-needed, retail basis, acquiring through volume licensing allows you to obtain licenses in the quantities you need — from as few as five to as many as several thousand.

This hits on the first significant advantage of acquiring software through a volume licensing program such as the Microsoft Open License program — cost savings. But there are other benefits too. Here are half a dozen.

  1. Volume discounts. Saving money is obviously at the top of the list for most business owners. While software bought piecemeal over the course of a number of years can add up to a prohibitive expense, volume licensing is far more cost effective. For one thing, the initial expense is less. To illustrate: buying a single copy of Microsoft Office System 2003 via a conventional retail outlet runs $499. By contrast, acquiring the same software through Microsoft’s Open License program trims the initial outlay to $456.The cost savings continue from there. One-time upgrades bought through retail cost $329. The Open License program trims that expense to $264 for upwards of two years. Add-ons such as InfoPath 2003 and eLearning are also included in Open License. Buying retail, on the other hand, means additional out-of-pocket expenses for both. Even the means of payment is advantageous with volume licensing. By locking in prices for a period of time, you can plan your software budget well in advance and make balanced, systematic payments. Not so with retail — when you need it, you pay for it, no matter how steep the expense.
  2. License safety. While retail means a paper license that has to be safely stored, volume licensing offers electronic licensing — instead of paper that can be misplaced or destroyed, a license is stored electronically so that it can never be lost.”If you lose a physical license, you lose your license — period,” Ligman says. “That means you no longer have a product that qualifies for upgrades. With electronic licenses, there’s no paper license that can possibly be lost.”
  3. Easier installation and management. Instead of different software programs with different identifications, volume licensing means one ID. That makes installation and subsequent management that much simpler. Also, with Microsoft Open License, you can manage your software license portfolios electronically, though eOpen.
  4. Better training and education. Not even the best software on earth is worth what it costs if it’s used improperly or inefficiently. With Microsoft Software Assurance — an additional volume licensing option — companies get superior product training, education and support than usually comes with conventional retail purchases.
  5. Greater flexibility. Every small-business owner knows that his or her work isn’t limited to the four walls of an office. With Software Assurance, users can obtain rights to use software at home, as well as the office. Not so with software bought through conventional retail.
  6. Greater protection. Microsoft Open License program’s strict licensing parameters offer greater protection from piracy, no matter if it’s intentional or otherwise. (For tips on ridding your business of unlawful software piracy, see this article.) Even with these advantages, volume licensing is fraught with misconceptions among small-business owners, Ligman acknowledges. Some of them include:

I’m too small. Many small businesses assume that theirs is simply too small an operation to qualify for the Microsoft Open License program. Anything but. According to Ligman, businesses with as few as two computers can qualify (this includes desktop as well as laptop computers). The required initial order is five or more licenses for any combination of Microsoft products.

It’s an obligation. Mention anything other than a straight-up, one-shot deal purchase, and many small-business owners run out of fear of some strangling long-term obligation. While Microsoft Open License does, indeed, cover a certain amount of time, every element of the program is available exclusively at the business owner’s choice. “There’s no obligation to buy anything,” Ligman says. “These are just other options. You can just own the license and not buy anything else moving forward from there.”

The software is somehow different. Many small-business owners also have a hard time accepting the fact that Microsoft Open License software is not one iota different from the Microsoft products sold in retail outlets. They are, in fact identical. “It may have something to do with the fact that retail was a way of life in the ’90s,” Ligman says, “but these are the exact same products that you can buy in a store.”

There’s some funky purchase procedure. Acquiring the software you need through Microsoft Open License isn’t some form of alchemy, or some complicated, mysterious process. You should expect the software resellers serving you — from within a worldwide software-reseller channel involved in the program — to provide you with fast, efficient service, Ligman says. “It’s just as easy to buy [software licenses] as any boxed software program.”