Microsoft 365 Apps with Shared Computer Activation

In short

Microsoft 365 Apps for Enterprise on a Raff Windows VPS with multiple users requires Shared Computer Activation (SCA) — a licensing mode where each user authenticates with their own M365 account at app launch instead of activating Office to the machine. Configure via the Office Deployment Tool (SharedComputerLicensing = 1) or Group Policy. Requires either Microsoft 365 Apps for Enterprise OR Microsoft 365 Business Premium licensing — Business Standard does NOT support SCA. Tokens cache locally; users must reach the internet for periodic re-activation.

What is Shared Computer Activation?

Default Office activation pins to the machine + signed-in user. On a single-user PC that works fine. On an RDS host where 10 different users sign in throughout the day, default activation breaks — the second user gets blocked because Office is "already activated" by the first user.

Shared Computer Activation (SCA) changes this:

• Office is installed once on the server
• At launch, Office checks who's signed in (the RDP user, not the install-time admin)
• Office calls Microsoft, requests a per-user activation token, caches it locally to that user's profile
• Token valid for ~30 days; renewed silently when the user next launches Office online

Per Microsoft Learn — Overview of shared computer activation, SCA is required for any RDS / multi-user environment running Microsoft 365 Apps.

What you'll need

• Raff Windows VPS with RDS Session Host role installed (see Multi-user RDP vs RDS)
• Microsoft 365 licensing for each user — eligible plans:
  • Microsoft 365 Apps for Enterprise
  • Microsoft 365 E3 / E5
  • Microsoft 365 Business Premium (only Business plan supporting SCA)
  • NOT supported: Microsoft 365 Business Standard, Business Basic, Personal, Family
• The Office Deployment Tool (ODT) — free download from Microsoft
• Local administrator rights on the VPS
• Estimated time: 45-60 minutes

Step 1 — Download the Office Deployment Tool

1. Download the Office Deployment Tool on the VPS
2. Run the self-extracting .exe — choose a folder like C:\ODT\ to extract setup.exe and a sample configuration.xml

Step 2 — Build the configuration XML

Create configuration.xml in C:\ODT\ with SCA enabled:

<Configuration>
  <Add OfficeClientEdition="64" Channel="MonthlyEnterprise">
    <Product ID="O365ProPlusRetail">
      <Language ID="en-us" />
      <ExcludeApp ID="Groove" />
      <ExcludeApp ID="OneDrive" />
      <ExcludeApp ID="Lync" />
    </Product>
  </Add>
  <Display Level="None" AcceptEULA="TRUE" />
  <Property Name="SharedComputerLicensing" Value="1" />
  <Property Name="AUTOACTIVATE" Value="0" />
  <Property Name="FORCEAPPSHUTDOWN" Value="TRUE" />
</Configuration>

Key elements:

• OfficeClientEdition="64" — install 64-bit Office (recommended for RDS)
• Channel="MonthlyEnterprise" — predictable monthly updates (avoid Current Channel for RDS — too frequent)
• SharedComputerLicensing="1" — the SCA flag, this is what enables multi-user mode
• AUTOACTIVATE="0" — don't try to activate at install time (admin's account would be used otherwise)
• <ExcludeApp ID="Groove" /> — exclude OneDrive for Business sync client (multi-user file sync gets messy)

Adjust Channel, language, excluded apps to match your needs.

Step 3 — Download Office source files

cd C:\ODT
.\setup.exe /download configuration.xml

Downloads ~3 GB of Office installation files into C:\ODT\Office\Data\. Takes 10-30 minutes depending on your VPS bandwidth.

Step 4 — Install Office with SCA enabled

.\setup.exe /configure configuration.xml

Installs Office Apps to the server. With Display Level="None" it runs silent. Takes 10-15 minutes.

After install, verify SCA is active:

$key = 'HKLM:\SOFTWARE\Microsoft\Office\ClickToRun\Configuration'
(Get-ItemProperty -Path $key).SharedComputerLicensing
# Should output: 1

If the output is 0 or empty, SCA didn't take effect — re-run the install with the correct configuration.xml.

Step 5 — Test as a non-admin user

1. RDP into the VPS as a non-admin user (one of your real M365-licensed users)
2. Launch Word
3. Office prompts: "Sign in to set up Office"
4. Sign in with the user's M365 account
5. Office activates for THIS user, caches the activation token in their roaming profile
6. Word opens normally

Confirm in Word: File → Account → should show the signed-in user, not the admin who installed.

Sign out and have a second user repeat. They get their own per-user activation, independent of the first user.

Step 6 — (Optional) Set the activation token cache location

By default, SCA tokens cache in %LOCALAPPDATA%\Microsoft\Office\Licenses\. For roaming profiles or User Profile Disks (UPDs), you may want to redirect:

# Computer-wide: cache tokens in a fixed location (NOT roaming with profile)
$key = 'HKLM:\SOFTWARE\Microsoft\Office\ClickToRun\Configuration'
Set-ItemProperty -Path $key -Name 'SCLCacheOverride' -Value 1 -Type DWord
Set-ItemProperty -Path $key -Name 'SCLCacheOverrideDirectory' -Value 'C:\OfficeCache'

This is the right pattern when using non-persistent profiles (e.g. RDS pooled deployment), since cached tokens shouldn't roam.

Step 7 — Plan license assignment

Each user RDPing into the RDS host needs:

• A Microsoft 365 license (E3/E5/Apps for Enterprise/Business Premium) assigned in your Microsoft 365 admin centre
• An RDS CAL (per-user or per-device) — see RDS CAL Licensing on Windows Server

Don't conflate these:

• M365 license = right to USE Office apps
• RDS CAL = right to CONNECT to the RDS Session Host

Both are required for users running Office over RDS. There's no "bundled" option that replaces both.

Common errors

"We can't sign you in to Microsoft 365 Apps because you don't have a license"

The user signed in with an account lacking an M365 license that supports Apps. Check the user's license assignments in the Microsoft 365 admin center.

"Microsoft 365 Apps cannot be activated because shared computer activation is not enabled"

SCA wasn't enabled at install time. Re-install Office with SCA configuration.xml, OR enable via Group Policy:

Computer Configuration → Policies → Administrative Templates → Microsoft Office 2016 (Machine) → Licensing Settings → Use shared computer activation = Enabled

(Templates download from Microsoft Office Administrative Template files.)

"An account already exists" — second user blocked

The first user's activation cached at the machine level instead of user level. SCA isn't on. Verify Step 5 — token cache should be in %LOCALAPPDATA%, not C:\ProgramData.

Outlook fails to load profile after RDS deployment

Common cause: User Profile Disks not configured. Outlook caches the OST file in the local profile; when RDS terminates the session, the OST is gone. Fix: enable User Profile Disks in the RDS Connection Broker, OR use Outlook in cached-Exchange-mode-off (online mode, slower but no OST).

"Microsoft 365 Business Standard" — supposedly not working

Correct. Microsoft 365 Business Standard does NOT include the right to install Apps via Click-to-Run for shared computer scenarios. Only Business Premium in the Business tier supports SCA. Upgrade users to Business Premium or to Apps for Enterprise.

Tested on

[HUMAN-REQUIRED: Replace before publishing.]

Tested on Raff Windows VPS, $128 plan (8 vCPU / 32 GB), Windows Server 2022 build [VERIFY], M365 Apps for Enterprise via Office Deployment Tool with SCA, 8 concurrent users via RDS Session Host, [DATE]. Tester: [Engineer name].

What's next

• Multi-user RDP vs RDS Session Host — set up the RDS infrastructure first
• RDS CAL Licensing on Windows Server (BYOL & SPLA) — license the RDP connection
• QuickBooks Multi-User on a Windows VPS — another common multi-user RDS workload
• Microsoft Learn — Deploy Microsoft 365 Apps by using Remote Desktop Services

Sources

• Microsoft Learn — Overview of shared computer activation for Microsoft 365 Apps
• Microsoft Learn — Deploy Microsoft 365 Apps by using Remote Desktop Services
• Microsoft Learn — Issues with shared computer activation
• Date last verified: 2026-04-20