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New Licensing Changes Brings New Challenges for Service Providers

15 Dec

SPLA Man took a vacation and the world turned upside down for SPLA partners! As most of you are aware, there’s been a lot of changes with hosting and more specifically how end customers deploy technology from your datacenter environment. In this post, let’s review these changes and discuss the challenges that accompany them. Have a question? Email info@splalicensing.com to learn more!

The Announcement

In October, Microsoft announced a new strategy for end customers (not SPLA) to deploy workloads on shared infrastructure from a third-party datacenter environment. This includes software subscriptions, software assurance benefits, etc. There was also a change to how Listed Providers deploy workloads. The article can be found here in case you missed it. https://www.microsoft.com/en-us/licensing/news/options-for-hosted-cloud

So what does all this mean? What’s the catch? There’s no catch. Microsoft made these changes in response to service providers long ago when QMTH came to fruition. Maybe there’s no catch, but there are specific things to consider.

For example, if you are an end customer, you can buy licenses from whoever you want (even Microsoft directly in some instances), but they can’t deploy it wherever they want. Your customer wants to deploy licenses they already purchased in AWS; well, they can’t for certain workloads. But guess what? They CAN in your datacenter! Think of Windows Server with Software Assurance. Your end customer wants to leverage their existing Windows licenses and not buy SPLA Windows licenses. They can deploy Windows Server with SA in your shared cloud environment but not in a Listed Provider.   This is a GREAT time for service providers to help end customers with the options available. The challenge for service providers is that most are not educated on the different deployment options, nor do they know what software their customers own or how they bought them. 

I think another challenge service providers face competition. Every service provider can offer the same solution as mentioned above. If you do not stay on top of your customers, someone else will. And finally, just because Microsoft allows something to happen doesn’t always mean you should license that way. Given the Windows Server example above, it might be cheaper for your customer to buy Windows Server from you rather than buy Windows Server with Software Assurance. You can offer a more affordable price for running Windows Datacenter than if they were to purchase it outright. Secondly, is it more profitable to have your end customers bring their licenses? As much as we sigh about SPLA, it is also a great revenue stream. 

Maybe as this year comes to a close, we can plan for next year. If you have questions on any of this, or perhaps you want to get a good grasp on your licensing now, let’s have a discussion. Email info@splalicensing.com, and we can help.

Thanks for reading,

SPLA Man

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Posted by on December 15, 2022 in Uncategorized

 

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What’s REALLY going on with SPLA????

16 Sep

In this article, let’s review the new licensing changes in greater detail. A LOT of questions on this change, so let’s get started! As always, if you have questions, please email info@splalicensing.com

Windows Server

For starters, Windows Server licensing rule change. In the past, (not specifically for SPLA) Windows Server was only available in CSP for Windows Standard edition. Fast forward to today, CSP will now have both Standard and Datacenter options. Great!

For end customers, they also have the option to license Windows Server by virtual machine, making it easier to move Windows Server workloads to a public cloud (as long as the hoster is not a Listed Provider). Other requirement is the Windows Server MUST have Software Assurance. No SA, NO outsourcer.

My Take?

Great move although now Hosters REALLY need to educate themselves on pricing options and licensing rules. DO NOT try and do this without assistance. Think about this from an end customer perspective:


1. They can leverage their EA to move to the cloud for Windows Server. Question is do they have SA on ALL workloads and associated CALs?

2. They can move workloads such as Office, Visio, and Project as well as Windows 11. Do you know the purchasing rights and do you know for certain they have SA? Are you CSP Direct? See below for more details on Office.

3. Is it less expensive for them to buy Windows Datacenter licenses through you in SPLA instead of buying perpetual licenses? That is the big question and often overlooked.

4. How are you going to track CSP, On -premise, and SPLA?

Our team can help you identify the best option for your customers. I also believe this is a GREAT way to differentiate yourself amongst your competitors. I work with SPLA partners all over the world, the one common denominator is not understanding the licensing rules and trying to do this alone. The best option is to outsource your licensing if you are unsure of what to do and how to properly educate your customers. Need help? Email us at info@splalicensing.com

Office, Visio, Project

If your end customer has license AND SA, they can use and authorized outsourcer (you if you meet the requirements) for shared hosting. Other terms may apply so stay tuned. If your end customer has license only, you have to isolate the hardware for the customer.

My Take?

This is great considering it provides options, but tracking the licenses may be difficult. This is especially true if you use a Listed Provider such as AWS. Most of these new rules do not apply to Listed Providers so stay on top of it!

Microsoft 365

If you purchase these licenses through CSP or through volume licensing the end customer has the ability to leverage an existing Authorized Outsourcer for both dedicated and shared environments. This is not defined as License Mobility, but “Extended Use Rights”

My Take?

Same as above to be honest. Windows Server and SQL have the same benefit in CSP (sorry, forgot to mention that) but the complexity still exists. As an example, for Windows Server through CSP, not only are you purchasing the Server licenses, but you are required to buy CALs. In SPLA, no CAL requirement to host. Microsoft 365 is a big deal and will be a bigger deal once they open it up to everyone.\

Windows 11

The big news here is mobility and the removal of a Qualified Operating System for VDA deployments. There’s going to be a lot of information on this. Microsoft stated the following:

Source: Microsoft Sept 2022 training

Other announcements? Last but not least….CSP for Hoster program. Basically allows hosters to deploy and manage CSP workloads from a datacenter environment.

Must be QMTH authorized, have an active SPLA and be CSP Direct. More details on this to follow. If you have a question, I encourage you to email us at info@splalicensing.com to help walk us through your specific questions.

Thanks for reading,

SPLA Man

 
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Posted by on September 16, 2022 in Uncategorized

 

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New Hosting Model to help CSP Direct Partners

30 Aug

A new “license-included hosting” solution will allow CSP Direct Bill partners the ability to pre-build hosted desktop (and server) applications that they can sell to customers including CSP. It will also allow end customers that have previously purchased CSP licenses to bring their licenses to a partners data center.

The Qualified Multitenant Hosting (QMTH) program is being replaced by the new “CSP-Hoster”. As mentioned in the article https://blogs.partner.microsoft.com/mpn/new-licensing-benefits-make-bringing-workloads-and-licenses-to-partners-clouds-easier/ hosters will not need unique keys from each end customer to deploy, this reduces time and streamlines installation. Currently, this program is only eligible for CSP Direct partners, but they did give hints the program will eventually be offered for everyone. That would be a great move.

Other news mentioned in the article:

Longer-term hosted solutions for CSP that will included one or three year subscriptions for RDS, Windows Server, SQL. Nothing mentioned for SPLA specific products.

New Virtual Core Licensing for Windows Server option that will allow customers the ability to elect to license Windows Server by the number of virtual cores instead of the physical hardware. They used the word “elect” indicating you can still license by the physical cores.

Virtualize Windows 10 or Windows 11 simplification that will allow any user with a M365 F3, M365E3, or M365 E5 license the ability to virtualize WIndows 10 or 11 on their own server or on outsourcers (hoster) servers (except AWS, Google, Alibaba and other Listed Providers). The big news is they no longer will need a qualified operating system (like the pro editions) without the need for ANY additional licenses.

Greater flexibility for outsourcing: Expanding Software Assurance benefits or subscription license will be able to use their own licensed software to build and install solutions and run on any outsourcers’ infrastructure (non Listed Provider) dedicated or shared! Your customer has Windows Server licenses with SA? bring them to your datacenter.

SPLA Mans opinion? This is huge news. Finally, I believe hosters have a lot of options that were previously restricted. Windows Server installed on shared infrastructure? Finally! CSP Hosted options? Yes! There’s still a lot to digest, we will be reviewing these and A LOT more in the coming days. Have a question? Email us at info@splalicensing.com

Thanks for reading

SPLA Man

 
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Posted by on August 30, 2022 in Uncategorized

 

Come Join the Community

06 Jul

Looking for Microsoft audit support or have a question on licensing? Check out our licensing community from our sister site http://www.mscloudlicensing.com

It’s more informative than a blog, there’s whitepapers, forum, and articles specifically for service providers. Together we can uncover the complexities of Microsoft licensing!

Thanks for reading!

SPLA Man

 
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Posted by on July 6, 2022 in Uncategorized

 

Update to Listed Provider Definitions

18 May

Interesting development recently with Microsoft regarding dedicated hosts, license mobility, and Listed Provider terminology. 

You can read the article here from my friends at ZDNet.  In short, they are removing the Listed Provider language that was announced 2019 for European markets only.    This story is still evolving but there are a couple of things to consider:

  1. European markets only
  2. When you sign a SPLA agreement, you are bound by the terms in the SPUR during the duration of the agreement.
  3. Expansion of Software Assurance will cover Windows, Office and Microsoft 365 apps for business and enterprise. 

I could imagine there will be changes to QMTH with this announcement.  I also know the goal of Microsoft is to make it easier to move to the cloud.  End customers can still buy Office 365, but deploy it in someone else’s datacenter.  It’s kind of win for Microsoft regardless. 

Here’s a link to the Microsoft blog site.

https://blogs.microsoft.com/eupolicy/2022/05/18/microsoft-responds-to-european-cloud-provider-feedback-with-new-programs-and-principles/

Thanks for reading,

SPLA Man

 
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Posted by on May 18, 2022 in Uncategorized

 

What do the new SPLA price increases mean for you?

15 Nov

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)

26 Oct

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?

18 Oct
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

23 Sep
  • 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

15 Jun

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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