Lets talk about Microsoft Downgrade rights

Rob Horwitz

Microsoft licensing is something the majority of us have to deal with on a daily basis. There are some aspects of Microsoft licensing that are not commonly known about, including downgrade rights and what that entails.

Downgrade rights’ are available on certain products such as Office, Visio, Project and server based software. We recently spoken to Rob Horwitz, co-founder of Directions on Microsoft about how to best manage Microsoft downgrade rights and what to look out for.

Please introduce yourself to our readers.

Prior to co-founding Directions on Microsoft in 1992, I spent eight years at Microsoft in a variety of software development and technical marketing roles. I was involved in developing the first version of Macintosh Word and marketing Microsoft operating system- and server-based products.

Over the past five years at Directions on Microsoft, I’ve mostly focused on analyzing and explaining Microsoft licensing programs and product licensing rules, including my role as a lead instructor for our two- and three- day Microsoft licensing boot camps.

You’ve recently published an article explaining Microsoft Downgrade rights. So please tell us what exactly are they?

Generally, when a customer licenses Microsoft software for on-premises use, the license is for a specific version (for example: “Windows Server 2012 R2”) and edition (for example: “Standard edition”) of the product. Under certain circumstances, customers who acquire a license for a particular Microsoft product version and edition for on-premises use may deploy an earlier version or (sometimes) different edition in its place.

This is important because organizations that understand downgrade rights as well as other rules associated with product versions and editions can minimize risk by avoiding common license compliance issues and reduce costs by averting unnecessary license purchases.

As we all know, Microsoft have recently introduced Office 365 and the subscription-based model for licensing. How do downgrade rights work in this instance?

If you buy Microsoft products for on-premises use via a subscription agreement such as the Enterprise Agreement Subscription, the downgrade rules are generally the same as for perpetual licenses.

For Office 365, you generally can’t downgrade to earlier versions of the online services — you have to use the latest version. That said, when Microsoft does major updates to Office 365, they give customers some time to migrate to the latest version, especially when the change might disrupt a customer’s operations.

Many Office 365 subscription plans provide the equivalent of CALs that license the use of on-premises software. Customers can use these on-premises software rights to access older versions of on-premises software.

Which Microsoft application has the most complicated downgrade structure? I know Visual Studio can be a bit of a pain!

The two product families that tend to catch customers by surprise are Windows and Office.

Windows 8.1 Pro OEM licenses limit downgrade rights to Windows 8, Windows 7, and Vista only. Windows purchased through volume licensing, however, provides version downgrade rights as far back as one wishes.

Office suites purchased through volume licensing allow downgrading to earlier versions of the same edition. Although counterintuitive, Office Professional Plus licenses do not include edition downgrade rights to Office Standard. Thus, in the event of an audit, Office Professional Plus licenses generally cannot be used to cover deployments of Office Standard.

The ITAM Review happens to have a good article on edition mismatch problems with Visio 2010.

Can you downgrade Microsoft Server software? How easy is this to manage?

As far as version downgrade rights go, Microsoft Server software purchased through volume licensing programs has the same downgrade rights as other products. Customers can install and run an earlier version and equivalent edition of the same product in its place.

For Windows Server and SQL Server, Microsoft goes further to allow edition downgrade rights (sometimes called down-edition rights or cross-edition rights), which allow a customer to install, and run a different (generally lower-level) edition than the one purchased.

Edition downgrade rights are commonly used in conjunction with version downgrade rights to allow a customer to deploy an earlier version of a different edition of the product. One example is running a SQL Server 2008 R2 Standard edition instance on a computer that is assigned a SQL Server 2012 Enterprise edition license.

What do you think is the biggest ‘gotcha’ with Microsoft downgrade rights?

Edition mismatch for desktop apps. The compliance error is to deploy a different edition than the edition purchased.

Another common gotcha involves applying the proper set of use rights. When exercising version downgrade rights, customers are generally subject to the use rights associated with the version and edition of the license owned rather than the use rights associated with the (older) version or (different) edition deployed. A proper accounting of which use rights are in effect is sometimes essential to limit an organization’s compliance risk, as well as maximizing the utility of the licenses it already owns.

Downgrading licenses can result in issues around product use rights. Why is this the case?

I think it’s best to illustrate by example:

The SQL Server 2005 Enterprise edition license stipulated a maximum reassignment frequency of once every 90 days, meaning licensing a virtualized workload that regularly moved between servers (using VMware or Microsoft’s live migration feature, for example) required each physical server where the workload could reside to have a SQL Server 2005 Enterprise edition license(s) permanently assigned to it.

In contrast, Enterprise edition licenses for SQL Server 2008 and 2008 R2 provide unlimited reassignment within a server farm (which can contain up to two data centers, as long as the data centers are in time zones no more than four hours apart). When SQL Server 2012 was released, the Enterprise edition license terms went back to the previous once-every-90-days rule, except for licenses covered by Software Assurance (SA), in which case the license could be moved as often as necessary within a server farm.

As a result, a SQL Server 2005 Enterprise edition workload running on a server assigned SQL Server 2005 Enterprise licenses or SQL Server 2012 Enterprise licenses (without SA) incurs the 90-day rule. In contrast, the same workload running on a server assigned SQL Server 2008 Enterprise or 2008 R2 Enterprise licenses benefits from more liberal reassignment rights. Got that?

Just about! Finally, how important is it to manage downgrade paths for Microsoft licenses? Could miss-management lead to problems?

It’s extremely important. Organizations that understand their downgrade rights as well as other rules associated with product versions and editions can minimize risk by avoiding common license compliance mistakes. They can also save their companies’ significant sums of money by avoiding unnecessary license purchases. We spend considerable time at our licensing boot camps explaining the mechanics of downgrade rights for the key Microsoft enterprise products and how to intelligently manage these rights to your advantage.