OCS 2007 Licensing - More on the UC Wave...

In this post I talked about licensing vs. features for Exchange Server 2007.

In that article, I made the comment that Exchange licensing made my "head hurt". The licensing for other pieces of the "UC Wave" are just as convoluted.

Exchange Server is just one piece of the "UC Wave", where "UC" stands for Unified Communications. The other two pieces are SharePoint Server and Office Communications Server 2007.

SharePoint is about collaborative communication capabilities - bulletin boards, document sharing, shared task lists, shared calendars, and other features following that general trend.

SharePoint is available in two versions - Windows SharePoint Services 3.0 (WSS 3) and Microsoft Office SharePoint Server 2007 (MOSS 2007) which is far from free. MOSS 2007 is built on top of WSS 3.0. Many folks seem to get along just fine with WSS - including some huge companies - so we won't go into detail on SharePoint licensing costs and feature differences (if you are interested - drop me an e-mail or leave a message on the blog; if enough folks are interested, I'll author a post on that too).

The final piece of the current "UC Wave" is OCS 2007. OCS 2007 licensing is very similar to Exchange Server 2007 licensing - no real surprise there. This article is about OCS 2007. You'll note that this article is very similar to the Exchange Server article.

OCS 2007 requires a client for some features (such as presence, instant messaging, etc.) and that client is named Office Live Communicator 2007 (which we will just refer to as Communicator henceforth).

Some of the other OCS 2007 features (such as call control and software-based Voice over IP [VoIP]) do not require Communicator (but do require SOME user interface).

OCS 2007 has both a Standard Server and an Enterprise Server, similar to Exchange. Continuing with that similarity, OCS 2007 has a Standard CAL and an Enterprise CAL. At minimum, a Standard CAL is required for each user. The OCS Enterprise CAL is an additive CAL, like the Exchange Server Enterprise CAL.

The feature-content offered by the Communicator application is handled by the Standard CAL. Other OCS 2007 features require an Enterprise CAL.

Communicator licensing is not included in the CAL license or Server licenses for OCS 2007.

So, Microsoft gets you coming and going in licensing, in both OCS 2007 and in Exchange Server 2007. You must license the Server software, you must license access to the server for each user, and you must license the primary user interface to the server software.

Please note: prices are estimated retail prices in US dollars. Also please note: I am not a lawyer (IANAL). My comments are based on my understanding of publicly available information on various Microsoft web properties.

OCS 2007 Edition Cost
Office Communications Server 2007 Standard Edition MSRP US $699
Office Communications Server 2007 Enterprise Edition MSRP US $3,999


OCS 2007 Standard contains most of the features of OCS 2007 Enterprise, but is limited in terms of storage space, clustering, and highly-available option support. Thus Standard Edition is targeted at companies who can "afford downtime". Here is a table defining the primary differences:

Feature Standard Edition Enterprise Edition
Storage engine SQL Embedded/SQL Express SQL Standard/SQL Enterprise
Local storage Yes-required Not required
Clustering Not supported Supported
Highly-available Not supported Supported


Similar to the discussion of Standard vs. Enterprise for Exchange functionality; how much does downtime cost your company? If your instant messaging or telephone system are down for a reboot in the middle of the day, does that represent a minor inconvenience, or is that a critical business interruption?

If an occasional reboot isn't a problem, then with good hardware (and powerful enough hardware), Standard Edition is a reasonable choice. That choice is limited, as with Exchange Server, by your Service Level Agreement (SLA) with your clients.

Regardless of the OCS 2007 Edition, you will require Client Access Licenses and a Communicator license.

Theoretically, a Communicator license is not required if you only require Enterprise CAL functionality. However, without Communicator, you have effectively wasted the capabilities that are enabled by a Standard CAL. So realistically, a Communicator client is a requirement to obtain the full benefits of OCS 2007 (and Unified Communications).

Those costs (again, estimated MSRP) are shown below:

Description Cost
Office Communicator 2007 US $34
Standard CAL US $31
Enterprise CAL US $139


Thankfully (at least so far), there is only a single edition of Office Communicator 2007.

In a change from prior CAL offerings from Microsoft, but following the lead of Exchange Server 2007, the Enterprise CAL does not replace the Standard CAL. Instead, it is an additive CAL. You must have a Standard CAL for every Enterprise CAL. However, the reverse is not true. You can potentially choose to not offer some users Enterprise functionality.

It is interesting to note that you can use Standard CALs on Enterprise Edition and you can use Enterprise CALs on Standard Edition. They are only relevant to the feature content required by their presence.

Significant features provided by each CAL are;

Feature Standard CAL Enterprise CAL
Enterprise Instant Messaging Yes No
Presence Indication Yes No
User-to-user Voice and Audio Yes No
File transfer Yes No
Multi-user web conferencing No Yes
Application/desktop sharing No Yes
Software-base Voice over IP No Yes
Call-control and Management No Yes


Note that Unified Messaging is a feature of Exchange Enterprise CALs (and thus enabled by Exchange Server) but VoIP and Call Control are features of Office Communications Server 2007. To have a full "software PBX", excepting only the PSTN gateway, you require both Exchange and OCS 2007.

Note: The PSTN gateway is the piece of hardware that connects OCS 2007 and Exchange Server to the public telephone network.

Now that we have all that data, what can we conclude?

First, the cost of the server software for an installation of any significant size is low compared to the cost of the CALs and user software. For example, consider the possible costs for an office of 10 users.

Description Cost
OCS 2007 Standard Edition $699
OCS 2007 Enterprise Edition $3,999
10 Communicator Licenses $340
10 Standard CALs $310
10 Standard CALs plus 10 Communicator Licenses $650
10 Enterprise CALs $1,390
10 Standard plus 10 Enterprise CALs plus Communicator Licenses $2,040


The Standard CAL cost for ten users plus the cost of 10 Communicator licenses is approximately the same as the cost of the Standard Edition server software. Once you add in the cost of the Enterprise CALs, the client cost already far exceeds the cost of the server software. The additive cost for the Enterprise CALs is twice the cost of the Standard CAL and the Communicator license.

Even so, as you add users, the cost of the server software decreases quickly as a percentage of the total.

Next, similar to server software cost, the cost of server hardware decreases quickly as a percentage of the total, as the number of users grows. However, for small deployments, the cost of server hardware may significantly exceed the initial cost of the software. In the 10 user example above, the total cost of user licensing plus server licensing for Standard Server and Standard plus Enterprise CALs is approximately $2,700.

However, in early-2008 dollars, a reasonable server platform for running OCS 2007 (non-highly available) is around $5,000. This doesn't include any backup capability or highly available features; but does include plenty of memory and disk and redundant features (like dual power supplies and fans). For 10 users, that may be excessive. However, that same platform can likely support 50 users as easily as 10. The licensing cost for 50 users is $10,200. At that level, software cost far outstrips hardware cost.

Wow. As I re-read the above, prior to posting, it all sounds so dense and confusing. All I can hope is that it is less confusing that reading the Microsoft licensing pages.

Published Friday, January 11, 2008 1:26 PM by michael

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