The truth about Microsoft licensing for portable devices

Microsoft's rules for portable devices are different from those for desktops and include a catch-22 in its licensing policy.

One of the more generous provisions of Microsoft licensing is the portable device right, which lets users install a second copy of a Microsoft desktop application on a portable computer without having to purchase another license for the application.

Because of myths and misinformation about this and the Home Use Program (HUP), however, it's often used incorrectly. An organization that uses portable device rights incorrectly can face a major bill from Microsoft for a bundle of app licenses that don't qualify for this right.

Portable device right myths
One of the myths about portable device rights is that users get a second install with Microsoft Office, so it's OK to install it anywhere.

While Office might activate correctly when it's installed a second time, such installations may not be legal. In order to perform a legal install, two conditions apply:

  1. The second install must be on a portable computer, not a regular desktop.
  2. The user must already be the primary user of a desktop computer that has a license for the same copy of Office.

Another misconception is that if an organization does not include Office licenses in its Enterprise Agreement (EA), it loses the portable device right.

This myth contradicts the Home Use Program, which offers inexpensive (about $10) copies of Office, Visio or Project for users who are already licensed for Office Professional Plus with Software Assurance (SA).

Doing the math on the HUP shows that it may actually be the most costly way to purchase Office for the following three reasons:

  • The required SA costs EA customers between $100 and $140 per year.
  • The Home Use Office license is not perpetual. It expires if the customer does not keep paying for SA.
  • All employees must take advantage of the program, or costs multiply. For example, if 25% of employees in an organization with EA take advantage of the HUP, the effective annual cost for each copy of Office purchased through the program is $400 to $560 per year for SA, assuming that the HUP is the main reason for maintaining SA.

The 'qualified desktop' catch-22
Ironically, the portable device right is unusable in an Enterprise Agreement that includes Office (although Visio and Project users can still exercise the right in that case). This is because Office is a so-called enterprise product that must be licensed for all "qualified desktops" if it is included in an EA.

Microsoft defines a qualified desktop as any portable, desktop or workstation computer that is "used by or for the benefit of an enrolled affiliate." Note that Microsoft does not talk about who owns the computer -- only who benefits. Therefore, any computer that is used "for the benefit" of a commercial customer is technically a qualified desktop.

This makes it impossible to use the portable device right for any employer-related activity if the employer has an EA that includes Office on every qualified desktop. The moment the device is used for work on behalf of the employer, it becomes a qualified desktop and triggers a requirement for a full Office Professional Plus license.

Interestingly, computers that use a HUP edition of Office have no waiver from this restriction. Even usage of a home computer for the employer's benefit should trigger the same license requirement. Microsoft doesn't appear eager to enforce this against a benefit that requires customers to keep paying for SA. However, since the portable device right doesn't require SA, Microsoft is more likely to enforce the rule there, suggesting that customers use the more costly HUP instead.

How to use the portable device right
Take Office out of the EA, and the applicable rules change. Most other Microsoft volume-licensing programs (such as Select, Select Plus and Open) don't employ the concept of the "qualified desktop." Outside of the EA, it's legal to use a home computer for the employer's business and to install a second copy of Office on a portable device if the user is also licensed for Office on a desktop. This even applies to retail copies of Office Professional. No ongoing SA payments are required. Note that the computer or user may still need other licenses -- such as Client Access Licenses (CALs) -- if they are accessing corporate servers.

One disadvantage of using the portable device right in a program like Select is that an EA offers better discounts, so organizations that drop Office from EA face a dilemma. They don't have to pay for a second copy of Office when a user has both a desktop and a portable, but that first copy of Office costs a bit more.

In practice, organizations that opt to purchase Office in a Select agreement rather than an EA will probably skip SA as well, saving hundreds of dollars on each Office license. But for the sake of comparing apples to apples, we can compare the 3-year cost of Office licenses covered with SA in both EA and Select. The tipping point comes when about 15% of users have both a desktop and a portable computer. At that point, the organization that takes advantage of portable device rights will save enough money with its "free" second installs to compensate for the loss of the EA discount.

ABOUT THE AUTHOR
Paul DeGroot is a writer, trainer, and principal consultant at Pica Communications, which specializes in Microsoft licensing strategies and policies.

This was first published in July 2011

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