A question from Daniel: “I am sure that one of you mentioned that it’s possible to purchase Office 365 keys in advance under Open and FPP and have up to 5 years to activate them. Could you please confirm that as we have a client who is interested in buying 3 year term instead of 12 month subscription.”
This is a very common question and there are two terms to remember here.
1 – You have five years to redeem (activate) an Office 365 key after the purchase date
2 – You cannot have more than 2 years’ Office 365 service at a time
So if a customer with 100 users has an amount of cash they wish to use in a financial period and they’d like to buy Office 365 plan E3 in advance for several years they can purchase 5 x Office 365 E3 100 user keys. Office 365 uses dynamic keys, for example if a customer has 25 users, they will receive one 25-digit activation key which will enable all 25 users licences when that key is redeemed. This also applies to a customer with 100 users: 1 activation key. So for our example you don’t want to buy 500 E3 licences as that will result in one activation key for 500 users. Instead, purchase 5 lots of E3 SKUs for 100 users. That will result in 5 activation keys. Use the first key in year 1, then when your office 365 service is coming up for renewal pop up to the Microsoft Volume Licensing Service Centre (VLSC) and get the next key for year 2 and so on.
There are risks to this. Many cloud services have gone down in price so the customer may be losing out by buying future years in advance. And if they need to downsize to less than 100 users, they can’t change those keys.
Lastly, let’s examine the evidence here as I like to include my sources where possible.
The “Office 365 Open & FPP Business Policy and Service Activation Partner Guide” dated December 2013 lays out some Product Key Subscription Management Policies including:
- Product Key Subscriptions cannot have more than two (2) years of service time outstanding.
- To renew a Product Key Subscription, the Product Key required must include a greater than or equal to number of user licenses as is already assigned to the service.
The “Office 365 Open & Office 365 FPP FAQ” updated November 22nd, 2013 states “Product keys must be redeemed within 5 years from the time that they are purchased from Microsoft.”