What is Microsoft software licensing?

Microsoft software licensing refers to the legal agreements and terms that dictate how Microsoft software products can be used, installed, and distributed. Licensing models can vary depending on the product, number of users, and the intended use—such as personal, business, or enterprise. Understanding Microsoft licensing ensures compliance, helps avoid legal issues, and can optimize costs by matching the right license type to organizational needs. Common licensing types include volume licensing, subscription-based licenses (such as Microsoft 365), and perpetual licenses.