It’s no secret that Microsoft® is trying to convince their customers to move their software and IT to the cloud. One of their goals is to replace perpetual licenses for products such as Microsoft Office, with subscription licenses for Office 365®. The software giant reports that there are more than 85 million commercial Office 365 users and it grew by more than 40% during the past year.
In most cases, when organizations obtain perpetual licenses, they own that license and the resulting use rights indefinitely, but Microsoft has imposed an unusual exception to that practice. When Volume Licensing customers obtain Office 365 through Software Assurance (SA), they forfeit their perpetual rights to the qualifying copies of Office Professional and/or Enterprise editions during the term of their Office 365 subscription. Unfortunately, this language does not appear in the EA, so many organizations fail to recognize it and assume they can continue to use the perpetual license on devices that are not running Office 365.
According to the Product Terms, “From SA User SLs may be purchased instead of SA for fully paid, perpetual Licenses with active SA for the Qualifying Products”. Microsoft maintains that if your perpetual license was obtained through Software Assurance, you may use it or you may obtain a corresponding SL (Subscription License), but not both. Presumably, the original perpetual rights would go back into effect if you end the Office 365 subscription, but reassigning the perpetual license during the term of an SL would result in a violation of the Product Terms and as a result, make your organization non-compliant.