Running Office on a Terminal Server: Which Licences Are Even Allowed?

Fix it now

Consumer and OEM Office cannot lawfully run on a session host – the retail terms forbid operating the device as a server and making the software available for simultaneous use by more than one user over a network. Two routes are permitted: Office LTSC through Commercial Licensing, counted per connecting device, or a subscription plan with shared computer activation, counted per user.

1. Take consumer, retail and OEM Office off the session host. This is a licence terms problem, not a configuration problem, and it is one of the first things a review looks at.
2. Choose Office LTSC if the same devices connect every day and there are fewer of them than there are users. Microsoft’s rule is a licence of the same version and edition for each device remotely accessing the software.
3. Choose a subscription if users connect from anywhere. The supported plans are any plan that includes Microsoft 365 Apps for enterprise, and Microsoft 365 Business Premium.
4. Do not try this on Microsoft 365 Business Standard. It does not support shared computer activation, and the entitlement that makes Business Premium work is a Business Premium entitlement rather than a feature of Microsoft 365 Apps for business.
5. Turn shared computer activation on with the Office Deployment Tool – <Property Name="SharedComputerLicensing" Value="1" /> in the configuration file. It is a deployment property, not a licence flag.
6. Budget Remote Desktop Services CALs separately. They licence the connection, never the applications, and both are required.

Visio and Project follow the same split. Volume-licensed copies are counted per connecting device; the subscription route needs a plan that includes the desktop version, such as Visio Plan 2 or Planner and Project Plan 3.

If the device and user counts are known, the choice is arithmetic and you can stop here. Below are the exact clauses that decide it, the plans that do and do not support shared computer activation, and the licences people forget underneath.

Why it happens

Three separate licences have to be right before a terminal server is compliant, and they are bought from different places. Windows Server and its CALs cover the operating system and access to it. Remote Desktop Services CALs cover the right to connect to a session host. Office licensing covers the applications running inside that session. Owning any one of them covers none of the others, and the mistake is almost always in the third.

Consumer Office is out on the terms, not on the technology. The retail licence for Office 2024 grants one instance on the licensed device for use by one person at a time, and then prohibits three things by name: using the software as server software or to operate the device as a server, using it to offer commercial hosting services, and making it available for simultaneous use by more than one user over a network. A session host does the third of those by definition. The installer will not always stop you, which is exactly how organisations end up in an unlawful configuration that works.

What remains are two legitimate routes priced on opposite units, so the choice is a counting exercise rather than a preference. Office LTSC is licensed per device. Microsoft permits hosting it on a network server for remote access without assigning a licence to the server itself – but it requires a licence for the same version and edition of Office LTSC for each device remotely accessing the software. That is the clause that produces the device count, and it is unbounded if people connect from wherever they happen to be.

Full reference

The two permitted routes, side by side

Why the per-device count runs away

Ten thin clients is ten licences and the arithmetic ends there. Ten thin clients plus twenty home computers plus an assortment of personal laptops is fifty licences, and the number changes every time somebody connects from somewhere new. That is not a loophole to manage; it is the licensing model working as written, and it is the single reason per-device Office suits fixed estates and fails for flexible working.

The reverse case is just as real. A fixed room of terminals used by three shifts is twelve licences under the per-device model and thirty-six seats under the per-user one. Count both ways before deciding, per product, and write the count down with its date so it can be reproduced.

Shared computer activation is a mechanism, not a label

Office normally activates against a user profile and counts the installation against that user’s device allowance – five desktops, five tablets and five mobile devices per licence. On a session host with dozens of profiles that model breaks down, so shared computer activation changes it: the installation activates transiently for whoever is signed in, without permanently consuming a device slot. Microsoft’s deployment guidance for Remote Desktop Services is unambiguous that you have to use the Office Deployment Tool and enable shared computer activation to do the installation.

<Configuration>
  <Add OfficeClientEdition="64" Channel="MonthlyEnterprise">
    <Product ID="O365ProPlusRetail">
      <Language ID="en-gb" />
    </Product>
  </Add>
  <Property Name="SharedComputerLicensing" Value="1" />
</Configuration>

The licences underneath, which are separate purchases

Remote Desktop Services CALs licence the connection to the session host and are bought per user or per device against a Remote Desktop licence server. They sit on top of the base Windows Server CAL rather than replacing it. Version compatibility runs one way only: later RDS CALs reach earlier Windows Server versions, earlier RDS CALs do not reach later ones, so a server upgrade drags the CALs with it.

There is one documented exception to needing an RDS CAL at all, and it is small. Remote Desktop supports two concurrent remote connections to the computer for administration, and Microsoft states you do not need RDS CALs for those. They are for administering the server. Using them to run somebody’s daily work is the most common way a small deployment ends up short.

Per-device and per-user RDS CALs behave differently in the licence server, and this matters for self-checking. Per-device RDS CALs cannot be over-allocated and up to 20 per cent can be revoked. Per-user RDS CALs can be over-allocated, in breach of the licensing agreement, and none can be revoked – so a per-user RDS shortfall does not announce itself.

Visio and Project on the same host

They follow the same split, and they are counted separately from Office. A volume-licensed Visio or Project copy on a session host needs a licence for each device remotely accessing it. The subscription route needs a plan that includes the desktop version – Microsoft names Planner and Project Plan 3 and Visio Plan 2 as examples of plans that support shared computer activation for exactly this reason. Planner Plan 1 and Visio Plan 1 are web experiences and do not qualify.

The cheaper route that sometimes suffices

Before licensing desktop Office on the host at all, check what the session actually needs to do. The Office web applications run in a browser inside a published session and cost nothing beyond the Microsoft 365 seat the user already has. Visio in Microsoft 365 is included with the Business and Enterprise plans and allows viewing and editing of basic diagrams. If a population of users only reads and lightly edits, they may not need a desktop installation on the host at all – which removes both the device count and the activation problem in one move.

Questions people ask about this