Licensing Across Programs: EA, CSP, SPLA, Open Value, OEM

Licensing Across Programs: EA, CSP, SPLA, Open Value, OEM

Introduction: Microsoft Windows Server licenses can be purchased and utilized through various programs and channels, each with its terms and benefits.

The main licensing programs include volume licensing agreements like the Enterprise Agreement (EA) and Open Value, subscription programs like Cloud Solution Provider (CSP), special provider agreements like SPLA for service hosts, and OEM and retail options.

This article compares these channels, including how Windows Server licensing works in each, their advantages, and considerations for organizations deciding where to buy. The goal is to help CIOs and procurement teams choose the optimal procurement program for Windows Server licenses, balancing cost, flexibility, and compliance.

Read more about Microsoft Windows Server Licensing.

Volume Licensing Programs (EA and Open Value)

Enterprise Agreement (EA): The Enterprise Agreement is a flagship volume licensing program for large organizations (generally 500 or more users/devices, though there are public sector variants with lower minimums).

Under an EA, companies sign a 3-year agreement and typically commit to certain products organization-wide. Windows Server can be acquired through an EA either as part of a Server and Cloud Enrollment (SCE) or as an additional product.

Key points for EA in the context of Windows Server:

• EAs usually include Software Assurance (SA) by default on licenses. If you purchase Windows Server licenses in an EA, you likely have rights to new versions, license mobility to Azure, and other SA benefits during the term.
• Pricing in EAs is discounted for volume, but you commit to a quantity upfront. For example, you might commit to several Windows Server Datacenter core licenses to cover your datacenter for 3 years. You have annual True-up cycles to report any increases.
• EAs allow enterprise-wide use. Suppose you select Windows Server as an Enterprise Product (in an SCE, perhaps bundling with System Center). In that case, you license all required cores enterprise-wide, which can simplify compliance if you have a standardization initiative (e.g., all servers covered).
• Transfer rights: Volume licenses from an EA are transferable to new hardware (after 90 days of assignment) and can be moved around your organization. You can also reassign licenses to affiliates or as part of mergers with Microsoft’s consent, giving flexibility that OEM licenses lack.
• Custom terms: Large EA customers can negotiate custom terms or special conditions (for example, transition rights or special pricing on Azure Hybrid use). However, the EA comes with a big commitment and is best for organizations with a substantial Microsoft footprint and stable or growing needs.

Open Value & Open License: For small to mid-sized organizations that don’t meet EA thresholds, Microsoft had programs like Open License, Open Value, and Open Value Subscription:

• Open License was a transactional volume licensing program (no ongoing agreement, just a way to buy licenses in bulk with a minimum of 5 licenses). However, the traditional Open License program has been retired since January 2022; Microsoft now directs customers to CSP for those needs. So, new purchases of Windows Server for small orgs are likely through CSP or Open Value.
• Open Value is a 3-year licensing program for organizations with as few as 5 PCs. In Open Value, you can spread payments annually, and typically get Software Assurance with it. It’s a bit like a mini-EA for smaller companies. Windows Server Standard or Datacenter can be purchased via Open Value, and you get the benefits of SA (new version rights, Azure Hybrid Benefit eligibility, etc.) during the term. Open Value also has an option for a subscription (Open Value Subscription) where you don’t own the licenses outright but “rent” them over 3 years, usually at a lower annual cost – at the end of the term, you can either let them expire or buy them out at a discount.
• Compared to EA, Open Value is less complex and has lower minimums. The trade-off is slightly higher unit pricing and fewer custom negotiation options. However, for mid-market companies, Open Value offers a predictable way to keep servers up-to-date with SA.
• License Transfer and Reassignment: Volume licenses acquired via Open programs have similar transfer rights to EA on a smaller scale. They’re not tied to hardware (you can reassign after 90 days) and typically allow you to move licenses around your organization. This is a key difference from OEM (which is locked to original hardware).

MPSA (Microsoft Products and Services Agreement) is another volume licensing framework that some enterprises use instead of EA. It’s more à la carte and doesn’t require enterprise-wide commitment.

Windows Server can be purchased through MPSA with or without SA. MPSA is useful for organizations that want volume purchasing without a 3-year enrollment. It’s beyond the scope here, but worth mentioning as an option for certain cases.

Read Windows Server Licensing in Virtualization and Container.

Cloud Solution Provider (CSP) Program

CSP Overview: The Cloud Solution Provider program is a modern licensing channel where organizations buy licenses (both cloud subscriptions and on-prem software) on a subscription basis through a Microsoft partner.

CSP has become the go-to for many needs previously served by Open License. For Windows Server, CSP offers subscription licenses for Standard and Datacenter, typically as 1-year subscriptions (though monthly options may exist via certain partners).

Key characteristics of CSP for Windows Server:

• Subscription Model: Instead of owning a perpetual license, you subscribe to Windows Server licenses for a period (e.g., 1 year). This often includes rights equivalent to having Software Assurance, because a subscription inherently means you’re entitled to the latest version and some hybrid rights. For example, Windows Server subscriptions via CSP generally allow Azure Hybrid Benefit use and new version access, even though “SA” isn’t a separate purchase – the rights are bundled.
• Flexibility: CSP is known for greater flexibility. You can increase or decrease counts at renewal or add licenses mid-term (prorated). There is no organization-wide requirement; you can buy exactly what you need. However, month-to-month adjustments might be limited for on-prem software – many CSP offers for on-prem licenses are annual commitments (New Commerce Experience changes have aligned CSP more with annual terms for certain software).
• Partner Managed: In CSP, you work with a Microsoft cloud partner who manages the billing and often provides value-added services. All support and queries typically go through that partner, not directly to Microsoft. This can be good or bad depending on the partner’s expertise. For organizations without an EA, CSP partners can act as your “licensing advisor” to some extent.
• Availability of Products: Initially, CSP didn’t offer all on-prem products, but now Windows Server licenses (per-core) are available. Some specialized SKUs might be missing (for instance, certain older versions or niche editions might not be on CSP). Also, System Center licenses and other add-ons needed for an on-prem datacenter might or might not be available in CSP – historically, there were gaps. Still, Microsoft has been expanding CSP’s catalog.
• No Perpetual Rights (unless purchased specifically): If you subscribe via CSP for 3 years and then stop, you generally lose the rights to run the software (unless an offer to convert to perpetual was used). This is unlike EA, where even without renewal, you keep perpetual use of the last acquired licenses (but lose upgrades/SA). However, in recent years, Microsoft introduced the ability to buy perpetual licenses through CSP, meaning you can buy a perpetual Windows Server license via a CSP partner (this was part of replacing the Open License channel). Those perpetual licenses purchased via CSP would behave like volume licenses (you own them). So CSP is a bit dual: it can sell you subscriptions or perpetual licenses. It’s important to clarify what you are getting with your provider. If it’s labeled “Windows Server Datacenter – 16 core – Annual Subscription (CSP),” then it’s not perpetual. If it’s “perpetual software”, it should come with a product key, and you own it.
• Pricing: CSP can be cost-effective for organizations not qualifying for large volume discounts. It avoids large up-front spends by spreading them out annually. The annual pricing for Windows Server in CSP is often comparable to annual Open Value level pricing. CSP also often runs promotions or allows partners to offer managed services bundling.

When to use CSP: CSP is ideal for mid-sized organizations that value flexibility and do not want the commitment of an EA. It’s also useful for any organization that needs a mix of cloud services (like Azure, M365) and some on-prem licenses, but isn’t large enough for an EA – CSP lets you handle both under one program.

One caveat is that CSP agreements are generally between you and the partner, with Microsoft in the background; ensure you choose a reliable partner since they will be your conduit for license management.

Service Provider Licensing (SPLA and Hosting)

SPLA (Service Provider License Agreement): SPLA is a specialized program for service providers—companies that host software for third parties (customers). If your organization offers services (like cloud hosting, SaaS, or managed services) on Windows Server to external customers, you generally cannot use standard licenses; you must use SPLA licenses.

Under SPLA, the provider licenses Microsoft software on a monthly rental basis and can use it to serve its clients.

How Windows Server works under SPLA:

• Per Core, No CAL model: In SPLA, Windows Server Datacenter and Standard are licensed per physical core on the host (with similar 8-core per proc, 16-core per server minimums). However, SPLA does not require Windows Server CALs for those hosted environments. The assumption is that since the service provider is paying for the cores monthly (at a higher rate that factors in external use), any user can access the service. This is crucial – if you’re a hosting company using SPLA, you don’t purchase CALs for Windows Server. (But note: other specialized CAL-equivalents called Subscriber Access Licenses (SALs) might apply for certain features like RDS or Active Directory Rights Management – e.g., RDS SALs for each user using Remote Desktop, even under SPLA).
• Monthly Reporting: SPLA is consumption-based. Each month, the provider reports the number of cores of Standard and Datacenter in use (and any SALs for other services) and is charged accordingly. This allows scaling up or down. For example, if in January you had 10 servers with 40 cores each under Datacenter, you’d report 400 Datacenter core licenses. If you decommission some in June, you report less.
• No Perpetual Rights: The provider never owns the licenses—it’s like renting. If the SPLA agreement ends, so do the rights to use the software for customers. This model suits businesses that make money by hosting services and want the cost to be OPEX aligned with customer contracts.
• Client’s Licenses (BYOL) and SPLA: There are scenarios where a customer can bring their own Windows Server license to a service provider’s data center, but historically, Microsoft restricted this, especially on shared hardware (to protect SPLA revenue). Recently, Microsoft introduced the Authorized Outsourcer/Flexible Virtualization benefit, which, for customers with Software Assurance or subscriptions, allows them to use their licenses on certain providers’ multi-tenant clouds (except notably on Azure, AWS, Google, which are “Listed Providers” with different rules). The service provider might use a CSP Hoster arrangement or simply accommodate customer-owned licenses in those cases. If a customer BYOs a license, they must also have CALs for their users (BYOL doesn’t transfer the no-CAL benefit; the no-CAL benefit is only for SPLA rented licenses).
• For most end-user organizations, SPLA is not something they sign; rather, they might leverage a service provider who has SPLA. If, for example, you outsource some workloads to a managed hosting company, that company will likely charge you in a way that includes SPLA licensing fees for Windows Server (unless you bring your own licenses by special arrangement).

CSP Hoster:

A new alternative to SPLA, starting around 2022, is that hosting providers can also resell CSP subscriptions to customers and host their workloads. This means instead of the provider using SPLA (where they “own” the license and the customer just pays a service fee), the customer could buy a Windows Server subscription via CSP (so the license is technically the customer’s, with outsourcing rights) and then deploy it at the provider.

This is an evolving area as Microsoft tries to be more flexible. The result for a customer is similar – they pay directly or indirectly for the Windows license used in a hosted environment. The distinction is more on the backend contractual side (SPLA versus CSP).

For CIOs, the main point is: If you are moving workloads to a third-party datacenter or cloud that is not Azure, you need to clarify how Windows Server is being licensed – either you rely on the provider’s SPLA (and you just pay a service fee) or you provide your licenses (which must be allowed by Microsoft’s terms, and often requires you have SA or subscription licenses).

Many traditional outsourcing contracts simply bake SPLA costs into their fees, which is convenient but sometimes pricier than using your licenses if you already own them. Recent changes have offered customers more options to use their licenses on hosts, but compliance must be carefully managed.

OEM and Retail Licensing

OEM (Original Equipment Manufacturer) Licensing: OEM Windows Server licenses are sold with hardware (e.g., when you buy a new server from Dell, HPE, Lenovo, etc., you can have Windows Server pre-installed with an OEM license).

Key characteristics of OEM licenses:

• Tied to Hardware: An OEM Windows Server license is legally bound to the first server it is installed on. It cannot be transferred to another server or split among servers. Even if that server is decommissioned, the OEM license dies with it (there is no license mobility). This lack of transferability is a major limitation in enterprise environments that frequently retire/upgrade hardware.
• One-Time Activation: The license is usually activated via a product key (and OEM COA sticker on the chassis). It often comes with OEM-specific media or BIOS-locked activation. Reinstalling on the same machine is fine, but you can’t legally use that key on a different machine.
• Cost and Use Case: OEM licenses are typically cheaper up front than equivalent volume licenses because they are sold in bulk by hardware vendors and have less flexibility. They are a good fit for small businesses buying a single server who want a lower cost and don’t plan on migrating that license. Enterprises sometimes use OEM licenses for test or non-critical systems due to cost, but they must remember the limitations.
• Support: With OEM licenses, support for the OS is provided by the hardware manufacturer, not Microsoft. For example, if you have an issue with Windows Server, Microsoft may direct you to HP if it’s an HP OEM license. This is different from volume licenses, where you can call Microsoft directly (assuming you have Software Assurance or a support contract).
• CALs: OEM editions of Windows Server still require CALs for users. You can buy CAL packs separately (often OEM CALs can be included) or use volume CALs—CALs are generally channel-agnostic, so a volume CAL can cover access to an OEM server.
• Software Assurance Add-on: In the past, Microsoft allowed adding Software Assurance to an OEM license (within 90 days of purchase) to convert it to a volume license with SA. This could then allow transfer after 90 days, upgrade rights, etc. This is something to consider if you do acquire OEM and then realize you need flexibility – check if adding SA is still available and economically sensible.

Retail (Full Packaged Product) Licensing:

Buying a Windows Server as a retail box or downloading it (FPP) is possible. This is usually the most expensive way per license and is intended for very low quantities (one-off purchases). Retail licenses are transferable between machines (more like volume in that sense), but each copy is a separate license, not tied to any agreement.

Enterprises rarely use retail copies due to the overhead of managing individual licenses. Retail might make sense for a one-server scenario in a pinch. But generally, most businesses will go volume or CSP if not going OEM.

OEM vs Volume Recap:

The choice between OEM and volume (EA/Open/CSP) often comes down to flexibility vs cost:

• OEM is cheaper per license, but is tied to hardware and has no built-in upgrade rights.
• Volume (and CSP) is transferable (after 90 days) to new hardware, and if SA or subscription is included, you get upgrades and cloud benefits.
• Volume also provides downgrade rights (you can use an older version with a new license). In contrast, OEM typically allows running the purchased version (or sometimes one version back, depending on the terms). For example, with a volume license for Windows Server 2022, you could choose to install 2019 or 2016 if needed. OEM might only come with the version purchased (unless the OEM media image allows an older install).
• Support differences as noted (OEM support = hardware vendor; Volume support = Microsoft/partner).

For a CIO evaluating new server purchases, OEM licenses might save money initially if the infrastructure is relatively static and cost is a big concern. But if there’s any plan to repurpose servers, move workloads around, or upgrade versions in a few years, volume licensing (or subscription) provides far more flexibility and long-term value.

Many mid-to-large organizations, therefore, standardize on volume licensing for servers, even if they pay a bit more, to avoid the siloing effect of OEM licenses.

Comparing Programs – Summary Table

Below is a simplified comparison of the key Windows Server licensing channels:

Notes: All programs except SPLA and certain CSP scenarios still require CALs for users/devices.

In SPLA, the service provider covers user access via inclusive rights (no separate CAL purchase by customer), whereas in volume and OEM, the customer must ensure CALs are acquired.

Recommendations

• Match Program to Organization Size & Needs: If you’re an enterprise with a wide Microsoft footprint, an EA or SCE can yield the best pricing and manageability, since it consolidates licensing and includes Software Assurance. Mid-sized organizations should evaluate CSP vs Open Value – CSP offers flexibility and aligns well if you also consume Azure or Microsoft 365. In contrast, Open Value (with SA) can be straightforward if you prefer owning licenses and keeping things on-premises with upgrade rights.
• Consider License Lifetime: Do you prefer licenses as a capital investment (perpetual) or operational expense (subscription)? Perpetual (EA, Open, OEM) might cost more upfront, but you retain usage rights indefinitely. Subscriptions (CSP, Open Value Subscription) lower initial costs and include upgrades, but you must renew to continue usage. Many CIOs choose a mix: perpetual for core infrastructure running long-term, and subscriptions for transient or rapidly evolving needs.
• Beware of OEM Limitations: If purchasing new servers with OEM Windows Server to save cost, plan for the future. Once that hardware is out of warranty or retired, the OEM license cannot be moved – you’ll need new licenses for new hardware. For dynamic virtualized environments, volume licenses (with their reassignment ability) pair better with VM mobility and hardware refresh cycles. OEM might be fine for fixed-purpose appliances or edge servers that won’t move.
• Leverage Software Assurance/Subscription Benefits: Programs that include SA or equivalent (EA, Open Value with SA, CSP subscriptions) unlock benefits like Azure Hybrid Benefit, new version rights, and license mobility. For any hybrid cloud plans (using Azure or an authorized hoster), ensure your licenses are acquired through a program that grants those privileges. For example, if you plan to frequently spin workloads in Azure using existing licenses, a volume license with SA or CSP subscription is required – OEM without SA won’t cut it.
• SPLA vs BYOL: If engaging a third-party to host your Windows workloads, discuss whether using their SPLA or bringing your own licenses is more cost-effective. SPLA simplifies compliance (the provider handles it) and covers external user access without CALs, but it might incur higher costs over long periods. Bringing your licenses could save money if you already own Datacenter licenses with SA. However, ensure the provider is part of Microsoft’s Authorized Outsourcer program and that you remain compliant with CALs. Independent licensing advisors can help run the numbers and compliance checks for such decisions.
• Consult Independent Experts: The variety of licensing programs can be overwhelming. Engaging a licensing consultancy (such as Redress Compliance or similar experts) can provide a neutral analysis of your Microsoft contracts. They can identify if you’re under an optimal program or if cost savings could be found by switching (for example, some enterprises downsizing from EA to CSP, or others moving from many OEM licenses to a consolidated volume agreement). These experts also keep up with program changes (like Microsoft’s shifting CSP and hosted rights policies in 2022-2025) that could benefit your strategy.

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