If you have a terminal server/RDS server you probably know that there are specific rules that Microsoft puts in place regarding software licensing for use on such a box.  The short description of those rules is that you have to have a license for each user that logs into the machine.  You may also know that “retail” versions of Microsoft software such as Office will not install on these machines, you need Volume License versions for the install.

The version of Office that is available at various subscription levels through Office 365 (O365)  is considered “retail software” as it is delivered and installed through by the “Click to Run” mechanism.  This means that you cannot just run the download and install Office from O365 as the installation will fail.

Microsoft has made tools available to perform what is termed a “shared activation” installation on a terminal server/RDS server that has the ability to pull down the “source” files for Office 365 ProPlus from O365 and then install with “shared activation”.  You can find references to the process here.  The salient point that you must understand is the shared install process works solely with Office 365 ProPlus which only comes with certain O365 plans.  Those plans are the ones that actually state “Office 365 Pro Plus” in their name or are Enterprise E3 or E5 plans.  Small Business Premium which Includes Office use rights does NOT provide Office 365 Pro Plus, as an example.

If you are on an O365 plan that includes Office but is NOT one of the plans that specifically includes Office 365 ProPlus (eg Small Business Premium) and want to install on a terminal server, you’ll have to purchase a Volume License version of Office Professional 2016 and install it on the terminal server/RDS server.  This is because you are limited to the “traditional” method of installing Office on the server.  However, you do NOT have to purchase a Volume License for each user as Microsoft has granted the right to use user’s subscription rights to Office through O365 as a “User CAL” on a terminal server/RDS server.  In other words, if a user is licensed for Office through O365 then the user is deemed to have an Office CAL on a terminal server/RDS server.  (I have participated in a number of Microsoft Software License Audits for organizations that have exercised this license right and they have all passed the audit successfully; the audit has recognized the rights grant.)

The following is a listing of the Office 365 plans that grant Office 365 Pro Plus:

– Office 365 ProPlus

– Office 365 Enterprise E3

– Office 365 Enterprise E5

NOTE:  Government and Non-profit plans with E3 or E5 in their name also include Office 365 ProPlus rights.

I hope this helps to clarify things.  I know I went around in circles at first trying to get a “shared activation” installation working on a RDS server using the “regular” Office user licenses from O365.  It wasn’t until I had a discussion with O365 support that I realized the salient differences between Office 2016 and Office 365 ProPlus.  See, even an MVP can get caught in licensing confusion!

Office Installation on RDS/Terminal Servers
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