I’ve written before on how partnering with an established provider can save you money, especially as a short term solution to get your hosting business started.  What I haven’t really addressed is the licensing.

Data Center Outsourcing is essentially what the name applies.  “Data Center” and “Outsourcing”; you outsource your data center. Amazing how that works.  Microsoft definition is a bit more confusing – amazing how that works too. From the outsourcing guide:

1. “A Data Center Provider is a Service Provider that provides Software Services, usually IaaS, to another Service Provider using Products licensed from Microsoft through its own SPLA..”

Microsoft Azure is a good example of a data center outsourcing company.  When you sign up for Azure, Windows will be included in the service.  They are essentially providing the infrastructure (Windows and/or SQL cores) and you provide the application licenses via your own SPLA.  When you leverage another service provider who provides the infrastructure, they must be providing the Windows licenses. Hmmm…here’s why.

Let’s say you have a signed SPLA agreement to offer Exchange to your clients and you decide to use Brett’s Hosting to provide the infrastructure.  Brett’s Hosting offers a public cloud environment (multiple customers sharing same resources).  Under this model, you will report Exchange licenses for each user that HAS access to the software and NOT report Windows under your own SPLA; Brett’s Hosting would report Windows via their own SPLA.  Why?  If it is a shared environment, there is no way Brett’s Hosting can allocate processors for you to report it.  SQL cores works the same way.  Still don’t believe me?  Check out the FAQ guide from Azure here. Notice under SQL it states you can purchase a VM or use SAL licenses.  Notice under Windows it states Windows is included with your agreement.

Here’s the bottom line, if you decide to outsource your data center to a public cloud provider, ask them how they manage the Windows OS.  If they say it is not included in the cost of the service and you should be providing the licenses, they are out of compliant.

Want more proof?  Download the outsourcing guide here

That being said, if you provide data center outsourcing services, I think you are in the right business. This is the fastest growing area within the hosting industry.  Windows is relatively inexpensive from a licensing perspective, especially as you add more VM’s and can capitalize on the Data Center edition.  (remember…unlimited VM’s).  SQL can get a bit more complex, but if you understand it I think that could be an added value over your competition.  Last, because you report Windows and SQL only and let the service provider control the user based licensing; it limits your compliance exposure.  (processors/cores are easier to track).

So are you a data center outsource or a service provider?  Do you work with someone to resell your solution or do it alone?  Would love to learn more about your offerings. If you need guidance or best practices or just want a second opinion from a licensing perspective you can email me at blaforge@splalicensing.com.

Thanks for reading,

SPLA Man