Office365 and Microsoft Cloud “CAL” Rights–what a great benefit!

One very cool benefit of many Office365 subscription levels is the “CAL’” rights that are conferred via the O365 subscription towards on premise services.  What I mean by this is that O365, for example, confers SharePoint and Exchange CAL’s that can be used for both connection to the O365 services and your own on-premise services!  This is an extremely important benefit to understand if you are looking at any sort of hybrid model with services in both O365 and your own on premise servers.  In fact, it is a benefit that you should consider even if you are not sure at this point that you are going to use all of the O365 services.

As Sean in our office has pointed out, it is a great way to ensure that you are licensed for both your on premise install, if that is what you insist on doing, and an O365 instance so that you can move to O365 in future without the regret of having made the investment in on premise CAL’s (which can be expensive).  This does NOT imply that Exchange or SharePoint servers can be installed on premise using the CAL rights, you still have to splash out for the serve licenses as well as  required internal server CAL’s for machines to talk to each other.  However, you can realize substantial savings by combining the O365 CAL rights with the on premise servers.  If you have ever done the math and added up all of your CAL costs involved with properly licensing something like SharePoint on your own servers, you will very quickly see the benefit of leveraging O365 subscriptions in place of on premise CAL’s.  And, frankly, it is even sweeter if you just go straight to O365 and leave on premise behind; but the reality is that on premise isn’t going away any time soon for many organizations.  But why not leverage at least some of O365’s benefits now?

O365 supplied Office licensing can also be used as the Office “CAL’s” on an RDS server.  You have to purchase an Open License copy of Office to actually install on the RDS server as the O365 version of office will not properly install on the RDS box but, once installed, any user that has an O365 subscription that includes Office is “licensed” to use Office on the RDS server via the O365 CAL “right”.  Once again, this is a pretty substantial benefit when you consider that each user subscription that includes Office confers the right to install and use Office on up to 5 devices.

9 responses to “Office365 and Microsoft Cloud “CAL” Rights–what a great benefit!

  1. Hi Robert.

    Thanks for your post. Would you have a link that confirms (officially from Microsoft) what O365 CALs support in an on-premises install of Exchange? I’ve read about this elsewhere, but struggled to find the actual MS license agreement that confirms this to be true, just in case they ever come after me for getting it wrong!

    Many thanks in advance,


    1. Hey, Bobby:

      I’ll have to go digging for the dox. I do know, for a fact, that O365 subscription CAL’s do cover on-prem Exchange as I have customers (or know of customers) operating under this model. I also have customers using O365 Office ProPlus CAL rights for Office2013 on a terminal server and this customer has just passed a Microsoft licensing audit. But I will see what I can do about finding a doc or dox to support this and post a link on my blog.



      1. Hi Robert.

        Thanks so much for kindly getting back to me. After posting the comment, I tried to do some more digging – which hasn’t proved entirely conclusive. I did find a screenshot on one other blog that suggested the on-premises CALs were only part of the deal if going for an Enterprise Office 365 package (such as E3). My client would be most suited to the “Office 365 Midsize Business”, which includes AD integration, but no mention of on-premises licenses, and I haven’t seen this package clarified as including on-premises licensing anywhere.

        The closest I’ve got to getting info is the ‘Office 365 service comparison’ site, but this doesn’t seem to explicitly express on-premises CAL rights of use (although there is a possible implication, depending on how you read some of the entries). Here’s that site:

        My experience with Microsoft is they rarely know themselves on these more complex scenarios. I phoned their licensing department a year ago to discuss licensing Office 365 for use in a VDI setup, to which they initially told me I could do it a certain way, then retracted it saying actually I couldn’t. Not a promising sign! That said, Office 365 has seen explosive growth this last year, so maybe they are developing more clarity. We can only hope…

        Any help you can contribute would be truly appreciated, and thanks for blogging on this topic area in the first place.

        Many thanks,


        1. Bobby: There are a whole pile of changes with O365 licensing about to be sprung on the public. At this point there are definitely O365 CAL rights conferred for on-premise use when you have E1, E2 or E4 subscriptions (many people use this for Exchange and SharePoint CAL licensing). I have seen Office CAL rights also conferred for Office 2013 use on a terminal server (I just had a client get audited and this was considered an acceptable use). With the new plans about to be unveiled I think the CAL use rights will be expanded. Stay tuned!


          1. Robert – so kind of your to take the trouble to look in to this for me. Thanks very much.

            In my sleep deprived state (some massive rollouts throughout the night and day going on at work), I thought I had come back and reported my own findings. Apologies to have not done this! You are right re E1 – E4 subscriptions – these are officially the only supported versions with CALs (along with a few other gov and edu plans). I spent hours on the phone / chat to MS the other day, and they finally pointed me to a document that details what versions of O365 include CALs for Exchange 2013. Here’s the link: – page 29 of the PUR document is the significant info, listing the versions of O365 CALs supported for both ‘BASE’ and ADDITIVE’.

            Also this technet blog was helpful:

            My client is going for Office Midsized Business, which I have been told won’t include the CALs, as also not mentioned in these docs. I asked MS their future plans for inclusion, and the chat connection unfortunately terminated, but they probably wouldn’t have told me anyway.

            What you have said is very interesting. My feeling is is to license everything properly for my client, but just hold fire on the CALs, maybe wait 6 months to see what they do. Whilst we won’t be technically licensed now for this one element, if Microsoft did audit we would just buy the CALs without further question. Would you agree this is a fair way to proceed? If it takes representatives of MS hours to answer my questions, then I’m doubtful they are in a very strong position to point the finger and suggest we’ve done wrong. And I’d rather not advise my client to spend £1,500 on CALs they probably won’t need come Christmas!

            Thanks so much for your help. This seems a bit of a lonely topic on the web – are we the only ones wanting to do this with O365 CALs?!

            Many thanks,


          2. Bobby: Thanks for sharing the links! You are correct, there is MUCH confusion inside Microsoft about licensing! If your client can wait a week or two there will be a massive if not seismic shift in the O365 licensing schemes. You might see things that make you (and them) much happier … So I guess I would tend to agree with you at this point. License all the on-prem stuff properly and wait for a bit to see how the CAL thing settles out. The audits almost always result in a “tune up” in licensing (eg CAL’s) so you are not necessarily putting your customer in jeopardy. Honestly, M$ licensing is a “black art”; you almost need to sacrifice a goat and read the burnt entrails to figure it out! I have taken Microsoft licensing courses and all I’ve gotten out of it in the end is a migraine! 😉


          3. No worries Robert, sorry to not share before!

            I am excited by your anticipation re O365. You’re not wrong on licensing being a “black art”, and Microsoft manage to create some truly impossible situations. As an aside, we had a series of PCs that were running Linux when Windows 8 came out, and we could barely make the switch in the end because there wasn’t a full retail release made available, only upgrades (the same as it’s always been with Open License) or OEM. I almost had to go through MS’s ‘counterfeit license’ program (goodness knows what devilment this would have invited through potential audits!), but in the end found a loophole in their OEM program to license up to 5 PCs, which we settled on. They are a nightmare, I’m not surprised you got a migraine from their licensing courses!

            I will watch with anticipation re how O365 might get altered. If they suddenly include Midsized Business with valid CALs for on-prem, this will be an answer to my prayers. I’m going to put my client on a 30 day trial anyway, so I would hope that along with Exchange 2013 being trialled we aren’t being compromising with our licenses just yet, and things shift as quickly as you hope…

            Many thanks again,


          4. Bobby: You are welcome! Good luck with the onboarding of your client. Feel free to ping me if you need help (I’ll send you a private email with contact info). And, yes, things are going to get very interesting over the next little while!


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