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What do the new SPLA price increases mean for you?

Recently, Microsoft announced new pricing for 2022 that can greatly alter the way you report.

We have received A LOT of responses to this announcement and thought we would host a webinar to bring clarity and to provide an update to the program. I hope you can join us! Details and webinar link (via Zoom) are below. If you cannot join but would still like to review your reporting, please send me an email at info@splalicensing.com

Join us as we discuss the upcoming SPLA changes including Microsoft price increases and how to optimize your SPLA reporting.  If you have a SPLA agreement, you will NOT want to miss this session with SPLA Man!  Topics include:

·         New Announcements and the future of SPLA

·         Tools to use to help optimize data center environments

·         Top Licensing Q&A

·         New promotions only from SPLAlicensing.com

Two sessions:

December 8th 11 AM US Chicago

December 9th  2PM UK time

We hope to have these monthly and yes, it will be recorded! We will post the recordings on our sister site www.mscloudlicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on November 15, 2021 in Uncategorized

 

SPLA Pricing Going Up (again)

I recently wrote a summary on SPLA pricing and the reasons behind the increases. Still, I thought today I would share a real example of reducing SPLA reporting for a specific service provider, so the increase was not as impactful.  If you would like a summary of your particular scenario, feel free to email me at info@splalicensing.com.  I just helped over 30 hosters this week alone in this analysis.

Company Name: 

Hosting Delight

Summary: 

They are providing IaaS (primarily Windows Datacenter, RDS, SQL Enterprise).  Has license mobility for end customer dedicated VM environments.  He dabbles a bit in VDI but is so frustrated because it is NEVER allowed in SPLA the way they want to provide it. 

Current Price Structure

Hosting Delight reports over 30,000 (USD) a month in licensing reported to their Reseller.  Hosting Delight earns roughly 20% in the margin (including licensing costs and support).

2021 Price Structure

Without doing anything, his cost is going up on all Windows Server and RDS deployments, making up over half of their reported revenue.  Ultimately this is DECREASING his margin between 5-10% for each customer.

2022 Price Structure with SPLA Man

I sat down with Hosting Delight and did a quick summary.  It turned out they were paying more for his licenses than other providers.  Not all providers charge the same, which had some impact but did not paint the entire picture. 

 I also analyzed what they are reporting on a product-by-product basis.  I was able to save them 10% on their licensing.  This was great news; the price increase had little to no impact on their business. 

How was I able to save them?

First, I worked in the SPLA Reseller space for over 20 years and know how the pricing model works in SPLA and other programs.  Secondly, this provider (Hosting Delight) kept reporting the same thing month in and month out.  They had an Excel file, the engineer submitted what they thought was accurate to an office manager, and the office manager reported to the Reseller.   Sound familiar?  I thought so.

The problem with this strategy wasn’t necessarily compliance; the issue was no one was considering licensing optimization.  I hate the word “optimization,” but it is true.  (I also hate the word “transformation” for the record, but it is what it is).  Here is a brief of what we did.

  • We set up security rules for SAL-based RDS licensing – restricting user access to server workloads.  Remember, it is not who accesses but who HAS access.  So frustrating.
  • For SQL workloads, we noticed many servers were passive, yet they were paying for those passive instances.  We changed the server’s name to “passive” for easy trackability and to take advantage of active/passive use rights.
  • We consolidated VMs and Host machines and advised them to report SQL Enterprise instead.  Yes, SQL Enterprise is super expensive, but it allows unlimited VMs and is one of the few products NOT going up in price next year.
  • For Windows Server, we offered VDI through the Windows Server GUI instead of Windows 10.  This provided a VDI type offering, something they had been considering for a very long time.

It is easy for an organization to say, “we will save you money,” but NO ONE has a website dedicated specifically to SPLA Licensing.  I know how SPLA pricing works, how Resellers work, and how your competitors price their hosting environment. 

Please don’t wait for the price increase; let’s start having the conversation now.  You can email me at info@splalicensing.com or check out www.mscloudlicensing.com (SPLA Man sister website).  Let’s optimize your SPLA Reporting transformation. Ugh. There I go again!

Thanks for reading,

SPLA Man

 
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Posted by on October 26, 2021 in Uncategorized

 

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New SPLA Price Announcements Coming! Are you ready?

Ahhh…..Microsoft. If you haven’t heard the news, there is an update coming for SPLA regarding pricing and new announcements to the program. Some of these changes include Windows Server, CIS, and the Office Suite. Suppose you want an opportunity to review these changes and how it directly affects your business. In that case, we can certainly set up a time to review and how other service providers are handling this impact. You can reach us at info@splalicensing.com Why the changes, and what precisely are they? The change has a lot to do with the direction Microsoft is going with its programs. SPLA is a mature program, with other solutions such as CSP, an emerging program for Microsoft.  That doesn’t mean SPLA is going away, but it does mean there will be changes, updates, and pricing increases.  If you would like to learn more, we can assist.  Do not keep licensing the same each month, expecting different results.  If you are frustrated and want an opportunity to optimize and, in some cases, reduce your costs, let SPLA Man come to the rescue! Let’s set up some time and review what these updates mean for you!  Please email us at info@splalicensing.com Thanks for reading, SPLA Man
 
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Posted by on October 18, 2021 in Uncategorized

 

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Biggest mistake a service provider makes in an audit in 2021

  • Not keeping track of end customer licenses. Your sellers need to remind your customers of license mobility. Yes, your customer may have active software assurance when they first bring licenses into your datacenter, they have to maintain software assurance. It does expire.
  • Office 365. Hosting O365 without QMTH on shared infrastructure. Don’t do it.
  • Not having rules in place that prohibits and engineer from installing whatever they want to install. Your engineer installs SQL Enterprise out of convenience but you thought it was SQL Standard. Guess what? You owe for SQL Enterprise.
  • Reporting usage just to report usage. Reporting needs to used as business intelligence. In the above example, if you report incorrectly, you are not charging your customers correctly.
  • Not having a tool in place to help support and track your licenses. Check out www.octopus.cloud

If you are going through an audit, reach out to us. I know the audit process well and our team can help!

info@splalciensing.com

Thanks for reading,

SPLA Man

 
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Posted by on September 23, 2021 in Uncategorized

 

Why a SAM Practice is Important

I recently took some time off to spend with Mrs. SPLA Man and the kids when my 13 y/o son asked me, “Dad, why do service providers only have one person reporting SPLA usage to their reseller? Why would they report anything if they didn’t know it was right? After all, you wouldn’t even drive away from a fast-food drive-thru or pay for a new pair of shoes unless the order was right or the shoes fit! So why would an SPLA provider spend thousands (if not millions) of dollars each month when they don’t know if what they are ordering is right! And then Dad, they get audited and have to pay even more!”

I was never so proud of my son. Me and Mrs. SPLA Man certainly raised him right. That story about my son was a bit silly, but the moral of the story is accurate. Why do service providers spend so much money reporting usage if they do not know it’s right?

I think they know it’s not right, but they also think it’s not that far off either. How many of you who have gone through an audit said this prior; “We might be off a SAL or two, but in the end, we won’t owe much. After the audit, they find themselves owing millions of dollars. So much for being off a SAL or two! Here’s where I think service providers do themselves a disservice in not having a SAM practice/plan in place.

  1. They only have one person reporting usage. In most cases, a procurement person or office manager will email an engineer, and the engineer will send an excel report with what he/she believes should be reported. The office manager reports it to the reseller. The problem with this scenario is what happens if the office manager leaves? What happens to the relationship with the reseller? Does the engineer know they should license what is installed? A great example is Office Pro Plus/Std. Most engineers will install Office Pro Plus, forget about it, and report Office Standard. Don’t be that guy!
  2. You are reporting simply because it’s a requirement by Microsoft. Yes, reporting is a requirement, but reporting SPLA should be used as a tool to gain information inside your data center. What is installed? What do users HAVE access to? Are we reporting SQL Standard when we installed SQL Enterprise? We report SQL Web, but is it a public website we are hosting? Reporting SPLA usage should provide you with insight into how profitable you are per individual customer. If you get audited and find out you should be reporting SQL Enterprise (that’s what is installed), but you report SQL Standard; how easy is it to go back to your customer and ask for more money? You just lost the customer and lost out on all that additional revenue. Reporting is about business intelligence.
  3. Not have a tool in place or SAM practice. The two go hand in hand (SPLA tool and SAM practice). You can have a tool, but what good is it if you only use it to scan a small portion of your data center? Are you saying the other parts of your data center are licensed 100% accurately? You NEED a SAM practice – document licensing rights, document contracts with your customer, have a paper trail with your reseller, know pricing changes, and use the tool to collect the actual data. Don’t know a SPLA tool provider? Use Octopus Cloud They are the only tool provider designed specifically for multi-tenant environements with licensing intelligence built in specific to the SPUR. Yes, I do marketing for Octopus 🙂

In summary, I know spending money to invest in an SPLA tool or SAM practice doesn’t seem appealing (it’s kind of like buying new windows for your house. Wow! I spent a thousand dollars on a new window, but no one would ever know it besides you). The same can be true about a SAM practice. A SAM practice will not win you new customers, but here’s one thing I will promise, it won’t lose you customers either.

Thanks for reading,

SPLA Man

 
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Posted by on June 15, 2021 in Uncategorized

 

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To use a tool or not?

Ahh, SPLA reporting. We’ve heard the line, the only sure thing in life is death and taxes. The only thing certain for a service provider is that Microsoft will change the licensing rules (frequently) and SPLA reporting. There’s not much we can do about Microsoft changing the licensing rules, but alas, there is something you can do about SPLA reporting. I’ve written this on several occasions, but it’s worth repeating. The biggest mistake a service provider will make is believing that SPLA reporting is a requirement by Microsoft. Yes, it is a requirement by Microsoft, but that is not the only reason you should track licensing. Let me provide an example, HostingRUs has one man managing their SPLA reporting. He runs a “foolproof” script that will identify everything in their environment. He reports all the licenses installed and looks at invoices to know the number of users to report. He submits it to his reseller. There is nothing wrong with that strategy except for one thing – nowhere in the reporting process is anyone tracking licensing rules, updates, optimization, and, more importantly, billing. So in the above example, yes, HostingRUs is reporting licenses to Microsoft, but they should consider so many other areas. Here’s another example. A member of my site (Mscloudlicensing.com) wrote me, saying, “Microsoft is really Sh*tting on me.” He has an application that requires Office Excel; his customer already owns Office 365. He wants to use the O365 license that his customer already purchased to be installed in his datacenter. Obviously, that is not possible without the QMTH addendum. That’s when he got a bit crabby and threatened an anti-trust lawsuit with Microsoft. (Good luck, my friend, but my money is on the company with a trillion dollars in the bank). What the service provider failed to do in this example is look at his datacenter environment from a perspective of what he can do, not what he can’t. He didn’t know he could offer just Excel (instead of the entire suite). He also didn’t consider using open office. He also had very little knowledge of who accesses the application indirectly. If you believe Microsoft changes the rules A LOT and SPLA reporting are cumbersome; then maybe a tool is worth it. I recommended Octopus Cloud to the service provider in my example above. Many service providers use Octopus to keep track of SPLA reporting, but more are using it as a business intelligence tool to understand what is happening inside their datacenter. Octopus helped him know what is installed versus what is reported (a big miss for him was reporting Office Standard, but Office Pro was installed – not only was he underreporting, but in reality, he just needed Excel in the first place, a third of the cost of Office Standard!) Can you imagine if he was audited? His customers just required Excel, but he was on the hook for Office Pro just because his engineer thought it was convenient when he installed it! So when I asked (in the title) should you use an SPLA tool or not? I would argue you can’t afford not to. If you report 1,000 dollars a month or 100,000 dollars a month, don’t you want to make sure you got it right? Thanks for reading, SPLA Man
 
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Posted by on April 28, 2021 in Uncategorized

 

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What country do I report my SPLA usage? Why that question matters.

The year was 2008, the stock market crashed, the world was crazy, but there’s a silver lining to every sticky situation.  In 2008 my son, SPLA Man Junior, was born. It was also the year SPLA started to change. Acquisitions were happening, data centers began to scale and expand into different regions, hosters were signing multiple agreements in multiple countries, AWS and Azure were getting started, and the world became right again. Nowadays, SPLA Man Junior is catching on real quick that he wants nothing to do with SPLA (smart boy). The world is once again in turmoil, and now SPLA organizations face another challenge that could jeopardize their business. Where they signed, the SPLA agreement mattered.

Don’t be Joe

Let me provide an example, Joe Hosting is located in the Netherlands but has a small datacenter located in the USA. Joe decided to sign his SPLA agreement in the USA. Not a bad idea; after 2008, the US dollar fell dramatically compared to other regions. The problem with Joe is the small datacenter in the US is not his primary business. As part of SPLA, you should sign your primary business, not where you have a small data center. Unfortunately for Joe, he is out of compliance. The big bad wolf can come knocking, force to sign a new agreement in the country he should have signed years ago, thus increasing his costs, and perhaps add a licensing compliant audit on top of it. Good ol’ Joe is stuck.

The good news?  SPLA Man is here. If you find yourself in a pickle like Joe, all is not lost. Any time there’s a dilemma, there could be an opportunity. Maybe now is a good time to look at your datacenter licensing, what areas of your business can be optimized, what licensing can be removed, what technology can be deployed, and finally, be on a transformation road map to success.  We can also provide you education regarding your agreement.  Our team can certainly assist and offer you options. If you have questions about your SPLA agreement, it’s imperative to understand your potential risk before it becomes a risk. Have a question or want to talk more about your options? Email info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on February 22, 2021 in Uncategorized

 

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Questions Microsoft might ask a service provider and the feedback they would receive

As we venture into 2021 (see ya 2020!)  I thought I would put together a list of talking points from SPLA providers to Microsoft.   The response is from hundreds of calls, meetings, emails, etc., who directly or indirectly (kind of like a SAL 😊) voiced their opinion on SPLA and the feedback they would like to give to Microsoft.  If you would like to join the community to receive licensing advice, learn what others are doing, and learn/provide feedback, please email info@splalicensing.com. We would love for you to participate.  Here are the top 10 questions Microsoft is asking and the hosting community’s response.

  1. Why not move to Azure?  The response was not surprising and certainly repeated throughout the community.  It boils down to cost, customer service, and customer needs.  Cost:  A SPLA provider knows its price in running its datacenter.  They made the investments in hardware, know the storage/network costs, etc.   Azure is not as simple and can quickly increase (so there’s fear in that).   Customer Service: The reality is customers still want local and accessible business partners.  They know they can call their local rep and get an answer.  Customer needs:  In a way, Microsoft is a competitor when it comes to the datacenter.  End customers can just as quickly go to Azure themselves or go to an array of CSP partners or MSP providers.  Hosting companies want to hold onto their customer base.   Some customers want a private cloud.  Ironically, as many years SPLA has been in existence, they do not want it to go away.  They built their business on SPLA.  There is even a petition they would sign if it did go away. 
  2. Why are you with AWS?   ISVs moved to AWS didn’t do it because Microsoft was terrible; it just wasn’t available.  It takes time to move to the public cloud; many ISVs have been on the journey for quite some time.  They started using AWS for platform as a service:  to develop applications.  Once the application(s) was created, they leverage the same datacenter for hosting.   For traditional SPLA (non-ISV), many providers used AWS for infrastructure and continue to do so today.  Everyone talks about moving to the cloud; no one talks about moving away.   There is also the mindset that AWS is not Microsoft.   Using AWS allows them to use another vendor as opposed to putting all their eggs into one basket. 
  3. Why are you so pissed?   
  4. Silly question, but there is a bit of animosity when you look at Microsoft and the SPLA providers’ historical relationship.  For one, service providers very rarely spoke to Microsoft.  When there is a change, SPLA partners are the last to know.  Resellers do not care about SPLA, Microsoft does not (or at least in the past) care about SPLA, the only ones who cared about SPLA were/are the SPLA providers, and this idiot named SPLA Man.  Secondly, these price increases.   They are upset that pricing continues to go up, especially on the one product they must report: RDS. Let’s face it, in SPLA, there are only three products commonly licensed – RDS, SQL, and Windows.  Microsoft raised the pricing on all three throughout the years. 
  5. Why are you reporting Office when there’s Office 365?   Service providers state there’s a massive push for desktop as a service and VDI.  Again, not all customers want to move to Azure, and it’s easier to package everything under one umbrella. It’s also not compliant to license Office 365 out of their datacenter without QMTH.  The second reason has to do with multiplexing.  A lot of ISVs have Office as a component in their application.  As we all know, you run Excel; Excel must have a license.  
  6. Isn’t licensing getting easier?  Not really.  Yeah, it’s easier to license a USL than a SAL, but service providers face various challenges when it comes to licensing.  They have end customers who want to leverage their existing licenses (including Office 365), the CSP program. However, many indirect providers face challenges with on-premise licensing, cloud licensing, and hybrid.  They long for the days of just SPLA and License Mobility. 
  7. Should we discontinue SPLA?  This was answered briefly earlier; the short answer is absolutely not.  SPLA is not easy to remove, like the Open or EA programs.  SPLA provides flexibility.  Although the licensing challenges will always be there, at the end of the day, SPLA provides options for everyone.  Microsoft gets to have a competitive advantage over public cloud providers such as Google and AWS.  With Microsoft, you can have a private cloud (SPLA), public cloud (CSP), or on-premise (volume licensing).  It provides options for the customer, and it provides options for the hosters.  Why change it?
  8. Isn’t the Listed Provider use right helping?  No.  It is making it more challenging.  The service providers appreciate you did not extend the Listed Provider restriction for the entire SPLA community, but it does restrict them on their public cloud options.
  9. Should we remove individual SPLA Resellers?  Maybe that’s not a bad idea.  Why keep a SPLA Reseller who is not CSP Indirect authorized?  Service providers must work with multiple resellers: (1) for CSP Indirect business and (1) for SPLA. 
  10. Should we add partner benefits to SPLA?  Service providers would LOVE that.  Let SPLA attribute to their cloud competency and give rebates back to the SPLA hoster.  SPLA Man does not understand why Microsoft would not do this.  Yes, SPLA is a mature program, but provide us (the SPLA hoster) a reason to continue to develop our applications, host our applications, invest in resources, expand our business, and grow our mutual partnership?    Yes, you can achieve this through CSP, but there is so much business in the private cloud that Microsoft could and should take advantage of.

Again, if you are a service provider and would like us to help you with your challenges and maybe discuss all the different options available to you, please shoot us an email at info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on January 15, 2021 in Uncategorized

 

Can SPLA go towards the 300k CSP requirement?

Many CSP Direct partners who also have an SPLA agreement have asked if their SPLA usage reporting will go towards the 300k requirement to remain CSP Direct authorized.  Unfortunately, they are two separate programs, and one does not affect the other. 

The other question we get asked is: Can CSP replace SPLA for Windows, RDS, and SQL?  The answer again is no.  You are not allowed to host CSP products from your datacenter.  You can; however, license CSP products on-premise for your customers or in Azure. 

Whenever you license CSP for on-premise deployments, the software will follow the Product Terms, which (A) Prohibits hosting, and (B) Requires CALs.   When you deploy in Azure, you can host to third-parties, and there’s no CAL requirement.     

What is a service provider to do?  If you already invested in a platform, services, and billing systems to enable CSP Direct sales and still feel nervous about achieving the 300k requirement, here’s a quick list of things you may want to consider.

  • Microsoft recently discontinued the Open licensing program.  In doing so, they added perpetual licensing to the CSP program.  Do not think of CSP as a cloud-only solution, rather an opportunity to maybe expand your sales to include on-premise licensing sales.  On-premise CSP sales will go towards your 300k number.
  • If you are only CSP Direct authorized to have the QMTH addendum, make a cost comparison of running the same solution in Azure versus investing in sales and other activities to reach the 300k mark.  Is it worth it, or can you forgo the CSP authorization and use Azure?
  • Lower your cost for certain CSP products.  You do not make money from the sale of CSP licensing anyway.  Stop thinking your Exchange Online price increase is going to grow your bottom line.  Lower your cost to win customers and raise it later.  You can add services such as migration and cloud support to increase margins.  The 300k will not be based on your margin; it is based on Microsoft’s revenue billed.

Those are only suggestions, and a lot of this requires a change in business strategy, not just licensing.  Many service providers have asked about the future of SPLA.  I recently wrote an article regarding the future of the SPLA program.  You can download it here https://mscloudlicensing.com/product/whitepaper/  Some of the proceeds will go towards our charity, Mow Down Cancer, Inc. 

Thanks for reading,

SPLA Man

 
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Posted by on January 15, 2021 in Uncategorized

 

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What is really going on with SPLA?

I recently wrote a paper that outlines my opinion on SPLA and the future of the program. What is really going on with SPLA?   Will Microsoft discontinue the program?  If so, why haven’t they done so already?  So many questions surrounding the program but in the end, service providers just want a direction.  There’s also CSP, Audits, and SPLA FAQ’s to help identify ways to not only be compliant but license the most cost-effective way possible.  To download a copy, please go to our sister site Whitepaper – Cloud Licensing (mscloudlicensing.com

There is a small fee but a portion will go directly to our 501C3 Charity – Mow Down Cancer, Inc.  Find out more at www.mowdowncancer.org

Thanks for reading,

SPLA Man

 
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Posted by on December 28, 2020 in Uncategorized

 
 
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