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Monthly Archives: June 2014

License Mobility With Software Assurance – the facts

Here’s another post on license mobility.  I am not purposely trying to be redundant, but majority of compliance issues come from customer owned licenses.  It’s important that you, your sellers, and more importantly your customers understand this program in its entirety. So here we go!

License Mobility, in its simplest terms, is a software assurance benefit that allows customers to migrate their existing licenses to a third-party data center.  Third party data center is a service provider.  (Amazon, Azure, Joe’s Hosting, etc).  Primarily this applies to application servers – Lync, Exchange, SharePoint, and CRM.  It also will include products such as System Center, SQL, and Remote Desktop Services.  I encourage you to check out the Microsoft website http://www.microsoft.com/licensing/software-assurance/license-mobility.aspx for more information.  Since this website is dedicated to the service provider community, I thought I would put together some common mistakes service providers make when deploying license mobility.  Fasten your seat belt, there might be a few surprises in this list.

Fact #1

License Mobility is an addendum to your SPLA.  This is NOT automatically granted.  If your company is not on this list, make sure you sign the addendum!  Download the list here  At a hosting summit several years ago, Microsoft announced this program to a room full of service providers.  You should have seen the look on everyone’s face as they made the announcement; almost hear the thoughts running through their minds “Wait a minute, this wasn’t legal before this announcement!!, We were doing this for years!”  That’s right, if you are hosting customer owned licenses in a shared hardware infrastructure/dedicated VM, make sure the products are license mobility eligible (see the SPUR) and make sure you sign the addendum!  I said this before, if Microsoft allowed all products to be installed on a shared hardware infrastructure, why would they have license mobility?  If you have customers that are bringing licenses into your data center and are not mobility eligible, make sure it’s dedicated.  (VM and hardware)

Fact #2

You need to make sure your end customer submits the verification form.  Why?  It’s a requirement by Microsoft.   Essentially there are three times your end customer should complete and submit a License Verification form:  (This is from the verification form guide).

1. “When you deploy eligible licenses with an Authorized Mobility Partner. A new form is required each time you deploy additional licenses.”

2.” When you renew your Software Assurance.”

3.” When you renew your Volume Licensing Agreement.”

“The form can include multiple enrollments or license numbers under a single agreement, provided that they are supported by the same channel partner. However, you should complete a License Verification form for each agreement under which you are using License Mobility (for example, an Enterprise Agreement and a Select Plus agreement).”

How many verification’s forms have been completed?  Very few if any.  Since this is not completed, you (the service provider) can be on the hook.  If anything else, please make sure you make this mobility guide available to your customer to review.  Check it out here

Fact #3

When end customer use license mobility, they are transferring the licenses into your data center.  When you transfer licenses, they can only transfer the licenses away from your data center once every 90 days.  Good news – you keep the customer for a minimum of 90 days!  So let’s say they decide to go back to their own data center; same story – once every 90 days.  From the License Mobility FAQ Guide.

“Customers must assign licenses for a minimum of 90 days, after which they may move their licensed software from a service provider’s shared servers back to their local servers or to another service provider’s shared servers.  Instances run under a particular license must be run in a single server farm and can be moved to another server farm, but not on a short-term basis (90 days or less). A server farm includes up to two data centers each physically located either in a time zone that is within four hours of the local time zone of the other [Coordinated Universal Time (UTC) and not Daylight Savings Time (DST)], and/or within the European Union (EU) and/or European Free Trade Association (EFTA).”

Fact #4

You need to include educational materials to your customers during the purchasing process.  I did not make this up, it’s part of the addendum you need to sign to take part in the program.  Azure does this via their website http://azure.microsoft.com/en-us/pricing/license-mobility.  Amazon does this as well http://aws.amazon.com/windows/mslicensemobility/ Very few on the partner list makes this readily available on their website.  In fact, out of 10 random selected partners on the list, none have a written statement on mobility.  Perhaps you make this as part of your agreement with your customer; but not sure why you wouldn’t make this as part of your marketing strategy.  If you look up “authorized mobility partners” why wouldn’t you want them directed to your site? To prove my point  I looked up “authorized mobility partners” and only a handful of actual hosters show up in the top searches.  Make it your company.

Fact #5

I’ll make this one short; Windows does not have mobility rights.  You need to report Windows server via SPLA.

I know I am beating a dead horse with license mobility.  I just feel this is a big miss by providers and customers.  The bigger miss is SAL for SA  – check out my old post here

I hope you find these articles helpful.  Have any concerns, questions, or just want a second opinion – feel free to email me at blaforge@splalicensing.com

 

 

 
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Posted by on June 24, 2014 in License Mobility

 

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How the other guys do it

So you want to get in the hosting business.  You start looking around the web and notice that other service providers seem to charge less than what you can charge your customers.  You notice other’s advertising solutions that seem to conflict with the licensing rights.  You are at a loss.  You ask yourself, “how do they do it?”  You ask your reseller who seems just as confused.  So what do you do?  How do THEY do it?

Since this blog is about licensing, I’ll educate you on how other’s save costs based off licensing alone.  I’ll break this down into three parts – Exchange, Mobility, and VDI.  Those are probably the big 3 and more often than not, can make you scratch your head.   I will also add one more, and that’s your reseller.

Exchange Licensing

Exchange is your best friend and enemy. I say that only because it is so important and one of the reasons organization’s move towards the cloud.  They don’t want to babysit an Exchange server anymore, but it’s a must have.  Licensing aside, to deploy Exchange you must have redundancy (God forbid it goes down) you must have infrastructure (they have to receive email as fast as their eyes can focus) and finally administration (dedicate an employee(s) to make sure the former happens).  That’s pricey.  Now the licensing.

Exchange is licensed by user, which means all users who have access to the software needs a license.  To deploy Exchange, you also need Windows.  Windows is licensed by processor.  So let’s say you have 10 users and you provide those users access to your Exchange server. Exchange cost’s $5 per user (hypothetical).  Windows costs $20 for Standard edition or $100 for Datacenter edition.  Because Windows is licensed only by processor (not user) the more users, the less expensive Windows licenses become. See below. (example purposes only)

Hoster with 10 Exchange users on a two processor box

Exchange: $5 per user

Windows: 2*20= 40.  But if we do a per user cost it would equate to $40 divided by 10 ($4 per user for Windows).

The entire Exchange solution is $9 per user.  ($5 for Exchange + $4 for Windows)

Hoster with 1,000 Exchange users on a two processor box with multiple VM’s

Exchange: $5 per user

Windows: $100 per processor or $200 (using Datacenter, 2 processor box – multiple VM’s).  So $200 divided by 1000 users equals $.20 per user.

The entire Exchange solution is $5.20 per user.

So what do you do?  You either fight the good fight – offer something the bigger guys cannot offer – customer service, deployment services, kiss your server good night, etc. or if you can’t beat them…join them.  A lot of big providers offer partnerships in which they will provide the Windows server (think Amazon/Azure) but you provide the Exchange license via your own SPLA.  This is called Datacenter Outsourcing.  Perfectly legal, and part of your signed SPLA agreement.

Mobility

If you really want to get into Exchange hosting – this is the best way to do it.  (in my opinion).  You should offer license mobility.  For a complete definition of license mobility, check out my previous blog post here.  In short, this allows your customer who purchased Exchange with Software Assurance to transfer that license into your datacenter.  All you need to do is dedicate a VM for that customer but install it on shared hardware.  One caveat – you must report Windows via SPLA.  Windows is relatively inexpensive so it could be a win-win.  Just make sure you sign the mobility addendum to legally offer this solution and check with your reseller for eligibility

I also think you should consider SAL for SA.  This allows you (the service provider) to host the solution in a shared environment (VM and Hardware) using the Exchange license your customer purchased with SA.  You still report Windows and SAL for SA SKU via SPLA.  (way cheap by the way).  Difference between SAL for SA and License Mobility is under license mobility they are transferring the license to your datacenter.  Under SAL for SA, nothing is transferred, the original licenses can still be deployed on premise and in your cloud!  Great hybrid situation or ability to provide disaster recovery.  Reach out to me at blaforge@splalciensing.com to learn more

VDI

“I see they advertise VDI!!!”  You look online and see other providers offering VDI as a service.  Well, they are either out of compliant (more probable) or they are using Windows Server and RDS to emulate a desktop via SPLA.  Last option is to have the end customer bring their desktop OS licenses to a datacenter provider.  This is not likely since desktop OS does NOT have mobility rights.  This means the service provider would need to dedicate (server and vm) to one customer.  This is the least likely scenario, since dedicating an environment just for a desktop license makes little sense.

Moral of the story with VDI- there is NO way a service provider can offer a desktop license in a shared environment.
Conclusion

Do you ever wonder why you report licenses to your current reseller?  Is it just out of convenience or do they provide you strategic value?  My advice -don’t work with a reseller out of convenience.    Do they have their own cloud services that directly competes with you?  Hmmm…

Reach out to me at blaforge@splalicensing.com or linkedin.  Would love to review your options or simply offer a second opinion.

Thanks

SPLA Man

 

 

 

 

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Volume licensing or SPLA?

Here’s another scenario that can help you identify whether you should use SPLA or volume licensing.

Your company leases software developed from a third party but market it as your own.  You modify the software to fit your clients needs, adding plug-ins and other basic functionality, but nothing that changes the software.  You decide to host this application on your servers to your customers.  From a licensing perspective, you want the greatest discount and would prefer to leverage your existing volume licensing agreement.  What do you do?

Unfortunately your reseller is not SoftwareONE; so you decide to listen to your current reseller.  They tell you they should absolutely license this using your volume licensing agreement since this falls under “self hosting.”  Hmmm…but does it?

Let’s take this section by section but first let’s define the term “self hosted.” From the Product Use Rights pages 128 and 129. “…you may run licensed copies of Self-Hosted Applications with your own software to create a unified solution (“Unified Solution”) and permit third parties to use it, subject to the terms below. A Unified Solution also includes any Self-Hosted Applications that interact with your software that is part of the Unified Solution.”  One other criteria – must be marked as ‘Yes’ for ‘Self Hosting of Applications Allowed’ in the license terms and product section.

Some of the requirements according to the Product Use Rights (PUR)

Your software must:

  • add significant and primary functionality to the Self-Hosted Applications that are part of the Unified Solution (dashboards, HTML editors, utilities, and similar technologies are not a primary service and/or application of a Unified Solution);
  • be the principal service and/or application, and sole point of access, to the Unified Solution;
  • be delivered over the Internet or a private network from your datacenter to end users. The Self-Hosted Applications component may not be loaded onto the end user’s device; and
  • be owned, not licensed, by you, except that your software may include non-substantive third party software that is embedded in, and operates in support of, your software.

So let’s break this down into sections.

A. Is it a unified solution?  Yes, it sounds like a unified solution.  You have software that runs on Windows and SQL and all works together.

B. Are the products self hosted eligible?  Yes, Windows and SQL are self hosted eligible according to the products section in the PUR.

C. Delivered over the Internet? Yes, let’s assume it’s delivered over the internet.

D. Be owned, not licensed by you.  Uh oh.  You did not develop this application you are licensing it.  So now what?

Well, that’s where my friend SPLA comes in.  This organization has a volume licensing agreement for their internal employees and now requires SPLA for their hosted environment.  Now comes the issue of deploying the solution.  Can they run the hosted solution on the same hardware they are using internally?  No, you cannot mix your internal licenses for external access.  All hardware running Microsoft software needs to be isolated from what you are using internally.

In conclusion, pay attention to ALL the requirements when deploying a solution.  Just because under products section it says “self hosted eligible” does not mean the solution as a whole is self hosted eligible.  This goes for all solutions, all vendors, and one of the many reasons you need to work with someone who truly understands your opportunity and what you want to accomplish as an organization. Not just today, but where are you going 5 years down the road?  Think for a moment if you would have picked volume licensing instead of SPLA; 5 years down the road Microsoft comes knocking on the door.  How would your customers, your future projects, and your management feel if you picked the wrong licensing solution?

Thanks for reading.

SPLA Man

P.S. I wrote another blog post about Self Hosted and Office.  Check it out here

 
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Posted by on June 3, 2014 in Self Hosted

 

300 Level SPLA Licensing

Now it’s time to get into the fun part; the licensing scenarios that can literally drive you NUTS because if interpreted wrong, it can cost you and your company money.  Based on experience, here’s a list of the top confusing scenarios….simplified.

Customer Owned Licenses

Let’s say you have a customer that would like to bring their license into your datacenter.  You first ask them if the licenses are legit and if they have software assurance for those licenses.  Why ask if they have software assurance (SA).  If they have SA on certain software applications, they could be eligible for license mobility (shared hardware, dedicated VM).  If they do not have software assurance, now you have to consider dedicating (see dedicated v shared in this post) a server and VM for that customer and that customer only.  Without software assurance, they do not qualify for license mobility.  So keep this in mind – no software assurance = 100% dedicated hosting.

Now let’s say the end customer owns 100 Exchange licenses (CAL) without SA and they would like you to host Exchange for them using these licenses. No problem, you just dedicate a server for those users. But what happens if they hire 50 more employees that need Exchange?  Do you simply add those additional 50 users via SPLA or do they have to buy those additional 50 licenses from their volume licensing agreement?  If you picked the latter, you would be correct.

You cannot mix server/CALs on a product-by-product basis. This means the end customer CAL’s for a particular product cannot be used to access servers deployed with that product and which are licensed by the service provider under SPLA. It is ok for a service provider to rely on end customer owned licenses for one particular product (like SQL) but acquire licenses for a different product (like Windows) via their SPLA as long as they dedicate the server.  It also means that if an end customer has Servers/CALs for a particular product(s) and chooses to move to a hosted model with a service provider, they will need to acquire any additional licenses for that product(s) under their volume licensing agreement (i.e. if they increase the number of seats or need more servers for deployment or load balancing). It’s not ok for the service provider to acquire SAL’s under SPLA when the number of seats goes up for the end customer or when additional servers is required. This is because the licensing construct of internal use doesn’t match that of SPLA ,and therefore needs to be separate.

Dedicated v Shared

So what does “dedicated” and what is “shared mean?”  In short, it means one customer per server/VM for dedicated, and multiple customers using the same server/VM for shared.  But what about the other components of a hosted offering?  You have a SAN, does that need to be dedicated?  No, according to this document it doesn’t (download it  here)

“Any hardware running an instance of Microsoft software (OS or application) must be dedicated to a single customer. For example, a SAN device that is not running any Microsoft software may be shared by more than one customer; whereas, a server or SAN device that runs Microsoft software may only be used by one customer.”

So ask yourself “is this running Microsoft software on this device?”

SQL Virtualization

SQL virtualization boils down to five options

1) License per virtual machine (if nothing is running physical)

2) License the physical cores on the host and report SQL Enterprise. (allows you to run unlimited VMs)

3) License both physical and virtual (if reporting Standard or Web and it’s running both physically and virtually)

4) Report SQL Business Intelligence (BI) which is licensed per user and can access multiple servers (physical and virtual)

5) Report SQL Standard per user.  Same story as BI.

Don’t forget about license mobility within server farms.  A server farm by Microsoft’s definition consists up to two datacenter located within 4 hours of each other.  So if you have a datacenter in Seattle and another datacenter in New Jersey; that does not qualify.  Likewise if you are in Europe; the datacenter must be “within the European Union (EU) and/or European Free Trade Association (EFTA)

One benefit of license mobility within server farms is it will allow a qualified VM to migrate from one host to the next within the same server farm without adding additional licensing costs.  You have to license the machine with the most processors or cores to be compliant.  In the Service Provider Use Rights (SPUR) it shows you if the product is license mobility within server farms eligible.  Pay attention to this use right; there’s a lot of service providers who are reporting license mobility without license mobility.

Hope this brings some clarity.  If  you have additional questions contact me at blaforge@splalicensing.com

Thanks for reading,

SPLA Man

 

 
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Posted by on June 2, 2014 in Uncategorized

 

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