New SMB option: Microsoft 365 Business on a network server

SMB organizations wanting to use Office 365 Applications on a network server were forced to subscribe to the Office 365 Enterprise E3 or E5 subscription. With the Office 365 Business shared computer activation announced earlier this year this has changed. Small and Midsized organizations are now able to use Office 365 Business shared computer activation option with a network server, but there are some limitations. An overview.

Microsoft 365 Business
First of all this option to use Office 365 Business applications with Remote Desktop Services (RDS) or Citrix are only allowed when Office 365 Business is a component of a Microsoft 365 Business subscription. A quote from the October 2019 Online Services Terms (emphasis added):

Installation and Use Rights
Each user to whom Customer assigns a User SL must have a work or school account in order to use the software provided with the subscription. These users:

  • may activate the software provided with the SL on up to five concurrent OSEs for local or remote use;
  • may also install and use the software, with shared computer activation, on a shared device, a Network Server, or on Microsoft Azure or with a Qualified Multitenant Hosting Partner. A list of Qualified Multitenant Hosting Partners and additional deployment requirements are available at This shared computer activation provision only applies to Customers licensed for Office 365 Business when Office 365 Business is licensed as a component of Microsoft 365 Business; and ….

Office Deployment Tool
The Microsoft Office Deployment Tool is your way to deploy Office applications with shared computer activation. When you want to use Group Policies to enable shared computer activation, this will – according to Microsoft – not work with Office 365 Business because this version doesn’t support the use of Group Policies.

Hard Cap
All Microsoft Office 365 ‘Business’ type subscriptions have a hard cap of 300 users. User Subscription License number 301 can simply not be activated and used. At the other hand, today Business and Enterprise subscriptions can be mixed (they run on the same cloud platform). When you are a medium sized business facing the 300 subscriber limit, you can continue offering your users Office 365 applications by adding Office 365 E3 subscriptions. But be aware of the catch. Office 365 E3 comes with the Office 365 ProPlus applications, which is another product. For compliance reasons you will need to install two separate RDS or Citrix application silo’s. One with Office 365 Business applications for employees with a Microsoft 365 Business subscription and one with Office 365 ProPlus applications for employees with a Office 365 E3 subscription.

Because the network use of the Office 365 applications with shared computer activation isn’t registered as one of five installations, it is wise to document how you implemented the Office 365 application usage, which employees have what subscription assigned and how you will govern compliance. This will come in very handy when you are facing a Microsoft license verification or audit. A Managed Software Asset Management Service can help you with that.

Might you need more information or assistance with Microsoft cloud deployment or your subscriptions, please do contact one of our cloud- and licensing experts to help you.

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