The definition of Microsoft External User has changed

Starting October 1, 2024, Microsoft will revise the definition of an ‘External User’ in its Licensing Agreements. The current definition—referring to users who are not employees, onsite contractors, or onsite agents of the customer or its affiliates—no longer aligns with the modern work environment, Microsoft explains.  

Who is a “user” per Microsoft’s definition then?  

A ‘user’ refers to an individual person. Note that licenses are granted to users and/or devices, not accounts. Users are categorized into two types: ‘internal users’ and ‘external users.’ ‘Internal user’ is a single individual who is part of an organization.  

Who is an “External user”  

An external user is an individual not affiliated with the organization. This could be a contracted individual accessing the organization’s financial application to streamline expenditure or sales.  

It can be easy to identify users who are external to our organization. However, for legal purposes such as software licensing, a precise and clear definition is necessary. With many people now working remotely rather than in traditional office settings, Microsoft recognized the need to update this definition.  

What the new definition of external users is starting October 1, 2024  

• Users who are not employees of an organization or the organization’s affiliates  

• Contractors or agents who generally work for Customer or its Affiliates for an average of over 30 hours per week or  

• Contractors or agents who usually work onsite for the Customer or its Affiliates on a daily basis  

All Agreements initiated before October 1, 2024, will adhere to the current definition of an external user. For agreements beginning on or after October 1, 2024, the new definition will apply.  

Do you want to know how to license external users going forward?  

Our team of cloud and licensing experts will love to assist you do the right thing and save on costs. We are available to guide you and want to understand your peculiar situation to assist you expertly.  There are many factors to be considered which will include the number of users involved, what Microsoft product do you want to license and what is your current and projected financial budget when it comes to software licensing.  

Speak the team to start looking at a wide range of savings options today.