SharePoint Licensing Mysticism Explained

While SharePoint has been on the market since 2001, customers still get quite confused by Microsoft's licensing schemes.  When I speak at conferences, I'm commonly asked about how to license SharePoint.  Questions like "what can I expect to pay for SharePoint licenses" or "what specific licenses to I have to buy" are frequent topics of discussion.  So frequent in fact, that I created a specific presentation that I've given three times this year!

Unfortunately, customer confusion is completely warranted.  First, there are several different "versions" of SharePoint available; do you want Foundation, Standard or Enterprise?  There are also add-ons like "SharePoint for Internet Sites" and "FAST Search Server."  Depending on what you need and the features you would like to leverage, there's a seemingly dizzying array of choices.

Adding to this overall confusion, Microsoft has developed their "cloud" offering.  In late 2008, Microsoft release "Business Productivity Online" or BPOS, which included, among other products, a cloud-based version of SharePoint.  The original offering has a relatively straight-forward single tier licensing approach based on the number of users and whether you wanted a "full" or the "deskless" experience.   As of June 2011, Microsoft released the updated version of BPOS called Office365.  Unlike BPOS, Office365 introduces additional licensing levels across two main business size distinctions – you're either a small/professional business or you're a medium enterprise.  Depending on which category your business fits, there are several new license choices ranging from $6 per user to $27; each choice provides a different combination of features and products.

To be fair, Microsoft is not the only vendor struggling with licensing.  Many vendors in this space have trouble presenting an intelligible licensing scheme.  My colleague Tony Byrne recently commented in his "When WCM Vendors choke on the Cloud" post that many WCM vendors are struggling to adapt their licensing models to account for new cloud infrastructure.  In this respect, Microsoft has the double challenge of trying to create understandable license models for both cloud-based and on-premise implementations.

To help our customers begin to make sense of their choices, we have recently released a SharePoint licensing advisory paper.  In the paper, we explain how to distinguish the various versions of SharePoint, we describe what's necessary to license for specific scenarios (e.g., company Intranet vs. a public-facing web site) and highlight other kinds of licensing necessary to comply with Microsoft’s licensing requirements.

Other SharePoint / Office 365 posts