Volume licensing or SPLA?

03 Jun

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.


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


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