Beware of these costly licensing mistakes and predatory contracts

Beware of these costly licensing mistakes and predatory contracts

Here's a reference guide to help you avoid these licensing mistakes and the possibility of getting penalised for a non-compliant product.

Published on 3rd August 2022

Licensing is difficult and confusing. Choosing the best licenses for your business and IT infrastructure is a headache we are all too familiar with. Microsoft’s frequent product name changes, the overly complex licensing options and the many fraudulent resellers can really discourage people from navigating the licensing world.

As a Microsoft Gold Partner, our responsibility is to assist you with any of your licensing needs and provide you with the resources necessary to guide you toward the best licensing decision. Our research shows that many buyers aren’t aware of the obstacles when deciding on the various resellers and product options. Therefore, we have compiled a reference guide below to help you avoid these licensing mistakes and the possibility of getting penalized for a non-compliant product.

Fraudulent Resellers

When purchasing Microsoft products online, it may be tempting to lean toward listings that claim they can offer large discounted pricing while using trust seals and Microsoft’s logo on their sites and packaging. Keep in mind that if the deal looks too good to be true – it most likely is. However, there are valid signs to watch out for before clicking the add to cart button and verifying whether your license is authentic.

Legitimate partnership

Anyone can slap on a trust seal/branded logo and get away with it. However, you can verify if the reseller is authentic by checking to see if the seal leads to Microsoft’s website. You can also check by going to Microsoft’s Partner Directory and searching for the company’s name.


Packaged software can be purchased from a retail store, authorized reseller or online reseller. If you’re feeling hesitant, ask specific questions about some key features of the product. You can ask whether the packaging comes with a product key label (should not be sold separately) or if the product comes in its original packaging (check for a Genuine Microsoft Label or Certificate of Authenticity). However, if you have received the product and want to check the packaging, you can visit Microsoft’s Packaged Software page to compare the features.

Online shopping and payments

Nowadays, there are many ways to make online payments; however, it’s best to use a secure payment method to avoid scams and counterfeits. Stay away from sites that ask for cash or instant money transfers. To double-check a business’ legitimacy, visit the Contact and About Us section and look at the details. Double-checking the details through a web browser is another way to verify whether the resellers’ location and details are accurate.

Avoiding Compliance Penalties And Fines

Microsoft performs its routine annual audit with customers holding a Microsoft volume license to verify if customers comply with Microsoft’s licensing agreements. There are two types of audits:

Formal Audit

Customers are required to pay for the cost of the audit and retail price of all unlicensed products if it is revealed that there is non-compliant usage of 5% or more of the purchased license value. Typically, Microsoft will send a 30-day notice before the auditing date, and if selected, you cannot decline.

Software Asset Management Engagement

The SAM Engagement is “optional” and proposed by Microsoft as an unofficial voluntary audit at Microsoft’s expense. The process of SAM Engagement is very similar to the formal audit and is rarely in the customer’s favor. However, if the company is found to have more installations than licenses, it will be expected that customers will purchase all necessary licenses to cover the gap.

Hidden Costs And Limited Billing Flexibilities

The expansive list of Microsoft products and licenses can leave you feeling overwhelmed and frustrated. Choosing a reseller with little to no knowledge of differentiating Microsoft licenses and its compliance regulations can take more out of your time and pocket.

Furthermore, customers can end up with the wrong Microsoft 365 subscription and suite levels for their business (such as F1, E3 and E5) or not even realize that certain users aren’t in compliance. In recent events, Microsoft announced the mandatory migration of M365 to the New Commerce Experience.

The NCE is a new subscription model that replaces the prior cloud model—pushing MSPs to lock you into contracts and annual terms with no billing flexibility. However, there are direct Microsoft Gold Partners who can offer you a recipe for savings with up to 20% off MSRP, free support, zero downtime and more.

If you’re not sure whether you or your current MSP are limiting your control of maximizing your cloud licenses, contact and ask a trusted Microsoft Gold Partner. A trusted reseller can consult with you on the best licenses for your business and help you avoid Microsoft’s higher costs, complexities and penalties.

Downtime For Users

Your time is important, and looking to secure the most efficient and cost-effective software solutions takes immense time and effort. If you’re experiencing high software fees, compliance issues and outages or juggling multiple software licenses, it may be time to look for a trusted partner to handle that for you.

Unfortunately, many people and departments have experienced these pitfalls; however, it’s never too late to restructure your IT infrastructure. By educating yourself and partnering with trusted resellers, you can improve your software management and experience with cloud solutions that are perfect for your department and budget.


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