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Volume licensing

In software licensing, volume licensing is the practice of using one license to authorize software on a large number of computers and/or for a large number of users. Customers of such licensing schemes are typically business, governmental or educational institutions, with prices for volume licensing varying depending on the type, quantity and applicable subscription-term. For example, Microsoft software available through volume-licensing programs includes Microsoft Windows and Microsoft Office.

Traditionally, a volume licensing key (VLK), which could be supplied to all instances of the licensed computer program, was involved in volume licensing. With the popularity of the software as a service practices, volume licensing customers only supply their software with credentials belonging to an online user account instead, which is used for other aspects of services and provisioning.

Traditionally, a product key has been supplied with computer programs. It acts analogously to a password: The computer programs of old ask the user to prove their entitlement; in response, the user provides this key. This key, however, must only be used once, i.e. on one computer. A volume licensing key (VLK), however, can be used on several computers. Vendors can take additional steps to ensure that their products' key are only used in the intended number. These efforts are called product activation.

Volume licenses are not always transferable. For example, only some types of Microsoft volume license can be transferred, provided a formal transfer process is completed, which enables Microsoft to register the new owner. A very small number of software vendors specialize in brokering such transfers in order to allow the selling of volume licenses and keys. The most notable of these, Discount-Licensing, pioneered the sale of Microsoft volume licenses in this way.

Microsoft has been engaged in volume licensing since its inception, as the enterprise sector is its primary market. With the release of Windows XP in 2001, Microsoft introduced Microsoft Product Activation, a digital rights management (DRM) scheme to curb software piracy among consumers by verifying the user's entitlement to the product license. At the time, however, the volume-licensed versions of Windows XP were exempt from this measure. (See § Unauthorized use.) Starting with Windows Vista, Microsoft introduced two volume licensing methods for IT professionals in charge of installing Windows in organizations, both of which are covered by Microsoft Product Activation: The first is Multiple Activation Keys (MAK), which are the same as Windows XP's volume licensing keys but require product activation. The second is Key Management Server (KMS) and its corresponding keys. Hosts activated via a KMS have to report back to a software license server once every 180 days. Licenses using these schemes can be procured via the Microsoft Software Assurance program.

A large group of Microsoft customers are OEMs that assemble and sell computers, such as desktops, laptops, tablet computers and mobile device. In the devices sold by these OEMs, Windows license data is stored in the computer's BIOS in an area referred to as the "ACPI_SLIC", so that KMS can detect the use of previous Microsoft products even with the storage device removed or erased. For Windows Vista and Windows 7, the SLIC data are complementary; a volume licensing product key is still supplied with the device, which the user needs in the event of reinstalling Windows. Starting with Windows 8, however, everything needed to authorize the device is stored with SLIC data.

In 2010, Microsoft introduced the Office 365 licensing program. in which Microsoft Office, Microsoft Exchange Server and Skype for Business Server products are licensed based on the software as a service (SaaS) model: In exchange for a monthly subscription fee, software, its updates, support for them, provisioning, administration, licensing and additional services are all provided through an online web-based dashboard. In this scheme, licensed apps communicate recurrently with Microsoft over the Internet; as such, a product key needs not be issued to the user. Instead the administrator needs to sign up for Microsoft account, which holds details such as licensed apps, their number, and payment methods. This account is protected by credentials such as a username and a password.

Introduced in 2011, Adobe Creative Cloud is a SaaS offering in which software produced by Adobe, their updates, support for them, provisioning, administration, licensing and additional services are all provided over the Internet, in exchange for a monthly subscription fee. As with the Office 365, a user account registered with Adobe is all that is required to authorize software and store payment information.

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