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 email@example.com. I just helped over 30 hosters this week alone in this analysis.
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 firstname.lastname@example.org 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,