Staying on top of your Microsoft ‘Proof of Entitlement’
The documentation required to validate Microsoft software rights purchased comes in many forms. From a paid invoice or receipt to online guides and terms—these are collectively known as your “Proof of Entitlement” or PoE.
PoE provides two things—evidence that the software was purchased legally from Microsoft or an authorized reseller, and in-depth information on the rights purchased for a software program.
While certain documents and invoices are kept in your possession—such as agreements, ordering documents, the online documentation must be accessed and followed on a regular basis as it does change. Staying on top of these changes will ensure you stay compliant.
Here is an overview of both the offline (private) and online (public) sources you will need to monitor to ensure your PoE is up to date.
Public Proof of Entitlement data
Private PoE is any document or record made available only to you, following the purchase of a software license. These documents always contain your organization's details (i.e., your name and address) and your purchase details (i.e., software name, quantity, financial values, order number, etc.). They also may take many different forms and, in some cases might be a bundle of documents (i.e., OEM products).
Microsoft offers various options for licensing software, each having unique PoE requirements. It's important to strictly administer your PoE requirements in case of a Microsoft audit.
1. Volume licensing
Software purchased through a volume licensing program (i.e., Online Subscription, Open License, MPSA, Enterprise Agreement, Enterprise Subscription, School Agreement, Campus Agreement, Open Charity, and Government licensing programs) are typically in soft copy or recorded on an online database. If recorded, you can access your information in the form of a spreadsheet, called Microsoft License Statement (MLS).
This report is meant to inventory every license transaction made by your company and serves as the basis for your license entitlement during a license review, SAM engagement or audit. This document is based on the records resellers provide Microsoft every 45 days.
However, the MLS's accuracy is not guaranteed. Since it only reflects all licenses purchased through a volume licensing program, it does not include:
Original equipment manufacturer licenses
Full package product licenses
Product licenses purchased less than 45 days ago
To determine your real number of licenses, you will have to subtract divested and transferred licenses from the MLS totals. To ensure there are no issues with the MLS it's best to reconcile the data with your proof of purchase such as original contract documentation, agreements, invoices or receipts. It's also good practice to have Microsoft update the MLS with any new license entitlement documents—every time you purchase additional licenses.
Valid proof of purchase documentation includes the receipt or invoice for both the underlying qualifying software and the Volume License purchases. Note, Microsoft Volume Licensing programs do not provide the initial full version of Windows but only an upgrade—full version must already be licensed
To obtain your MLS contact your Microsoft account representative. You can also view your license statement from the Microsoft Volume Licensing Service Center website (www.microsoft.com/licensing/servicecenter/). It is advisable not to ask for the MLS too often. Microsoft may interpret your requests as suspicious and could trigger an audit.
2. Original Equipment Manufacturer (OEM) Licenses
OEM licenses cover pre-installed software that comes bundled with hardware. For the OEM license to be considered valid, the proof of purchase needs to identify both the software and the qualified hardware. Valid proof of purchase includes the invoice and receipt, Certificate of Authenticity, the box and the manuals with the accompanying genuine product key.
The Certificate of Authenticity (COA) is a seal or small sticker on the body of the computer with a license number on it, which verifies that the program is a genuine, legal copy.
If purchased with a non-peripheral component (e.g., motherboard, memory, CPU, or hard drive), the COA should be included with the software media, and employees should affix the sticker to the body of the computer with the installed operating system. For other software, the COA should be included with the documentation and system recovery disc as delivered with the hardware.
3. Full packaged product licenses
Full Packaged Product (FPP) is the retail version of a Microsoft licensed product. FPPs are sold in stores in boxes that include the media (the CD-ROM or DVD), the end user's guide and other packaging items, such as promotions for other Microsoft software products or services.
Proof of Entitlement is considered the Certificate of Authenticity, invoice, receipt, the manuals, the product key and the End-User License Agreement which is required to verify that the license has not been resold, donated, or otherwise transferred to another entity.
4. Electronic Software Distribution Licenses
Electronic software distribution (ESD) licenses cover software that was purchased online and downloaded electronically. The proof of purchase for such a transaction comes in the form of an email from the company that sold the software.
Many resellers of Microsoft software, as well as the Microsoft online store, also maintain a record of the transaction under the purchaser’s online user account history.
5. MSDN Subscriptions
MSDN subscriptions are licensed on a per-user basis, meaning each user of MSDN software requires a MSDN subscription to use the software. MSDN subscriptions can be purchased through a Volume Licensing agreement or through retail channels.
Proof of purchase is registered in the Microsoft License Statement report, and it should include the named individual to whom the software is assigned.
6. Other License Types
Upgrade Licenses: Microsoft offers upgrade licenses for operating systems and some Microsoft Office products. An upgrade license is based on an underlying, full software license (e.g., the original software version) and it requires PoE documentation for both the upgrade license and underlying software license. Additionally, upgrade licenses are offered only as retail FPP and through Volume Licensing. They are not available through OEMs.
Software Assurance Licenses: When purchasing Software Assurance through Volume Licensing, you receive electronic licenses for both the base license and the SA, and the Proof of Entitlement is stored on Microsoft's Volume Licensing Center. But when you purchase SA for an OEM license, you only receive an electronic license for the SA. If you lose the OEM licenses, you no longer have a qualifying license for the SA. To be considered valid, you need to keep documentation for both the SA license and the license for the underlying software.
Transferred Licenses: For transferred licenses, PoEs vary depending on the type of program used to acquire the first license and the date the license was transferred. Both organizations transferring the licenses need to keep a record of the transfer that includes the original customer agreement and details to provide proof of the license transfer. For organizations to fully understand their rights and obligations, they need to review the transfer clauses in their Volume Licensing Agreement.
Public Proof of Entitlement data
Public PoE data represents any entitlement details that are part of your agreement but is made public on Microsoft's website and available for all Microsoft's clients.
1. Microsoft Product Terms
The terms and conditions for how you purchase licenses for software and online services through Microsoft Volume Licensing programs. The exception to this is the Microsoft Online Subscription and Cloud Solution Provider programs. These terms and conditions explain how you may deploy and use software licensed under those programs and provide information on the availability of new products, discontinuation of products, available promotions, point values, product migration paths, notes and other information specific to products. The Product Terms document is updated monthly.
2. Microsoft Online Services Terms
Explain how you can use the service when you subscribe to an Online Service through a Microsoft Volume Licensing program. OST is updated monthly.
3. Services Provider Use Rights
These rights provide details on how to use products acquired through the Microsoft Services Provider License Agreement (SPLA). The SPUR is updated quarterly.
4. Service Level Agreements for Microsoft Online Services (SLA)
These agreements describe Microsoft's commitments for uptime and connectivity for Microsoft Online Services, and the current editions cover Office 365, Intune, Dynamics 365 and Azure.
5. Microsoft Independent Software Vendor (ISV), End User License Agreements (EULAs) and Product List
These agreements and list provide details on the availability, discontinuations, migration paths, and use of software acquired through the Microsoft Independent Software Vendor Royalty license program. ISV EULAs and Product List are updated quarterly.
6. Microsoft Downgrade Rights Brief
Microsoft Licensing agreements include references to specific rights on using any prior versions of Microsoft licensed software—downgrade rights. This brief explains the downgrade rights for the most commonly acquired systems, granted by Microsoft Commercial Licensing programs, and how they compare with original equipment manufacturer (OEM) and retail full-package product (FPP) license rights.
7. Multiplexing Brief
This brief explains how multiplexing impacts the licensing of Microsoft server operating systems and server