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Author Archives: MS Licensing

SPLA Partners: It’s time to be proactive

01 Apr

One of the issues with SPLA is that the program is very reactionary. You report in the arrears, you bill clients based on what they used previously, and no one cares about compliance until you receive an audit notification. It’s time to be proactive in this reactionary world.

With over 20 years of experience working with cloud providers in various capacities, one thing they all have in common is the challenges of licensing. For many organizations, they license the same thing month after month, without any data or understanding of why, solely for convenience. When you are audited, there is a typical 3-year lookback period. If you do not understand the licensing requirements, you will be charged a penalty for licenses not reported during that period. That tells me two things: 1) You are out of compliance and will owe a significant unbudgeted expense. 2) You are not charging your customers correctly, either.

For a moment, set aside the compliance risk and consider how long it takes your sales organization to close a deal. Most sales cycles are typically 3-6 months. You spent all that time, resources, and education to land that customer. Fast-forward 3 years, and all along, you have been charging them incorrectly. You are then faced with either telling the customer they owe for those licenses (which is unlikely, as the customer will likely just leave) or you are forced to absorb the costs. That’s why it’s crucial to be proactive before audit time. In addition, this is your opportunity to eliminate risk before it becomes a risk.

How do you become proactive? It’s important to understand what you have installed now. You can do this by running scripts. If you were audited in the past, most auditors provide this script; if not, I have one used for audit purposes that I can send to you. The tool/script is only one side of the story, though. You have to understand how to connect what is installed to the licensing rules. We perform this analysis by creating an Effective License Position (ELP) report. It will show what you should be reporting now and potentially what you would owe if audited based on your SPLA usage report. We can correct the mistakes now and provide education to your customers about their options if for whatever reason what they are doing does not meet the licensing rules (as an example, no software assurance).

What you need is not a tool, what you need is a SAM program to help you create processes and policies now rather than later. Think about this, if you are reporting 100k a month or 5k a month, don’t you want to ensure it is right?

Have a question about this or other topics or would like to review more, please email info@splalicensing.com Together, we can navigate the treacherous waters called Microsoft licensing.

Thanks for reading,

SPLA Man

 
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Posted by on April 1, 2025 in Compliance

 

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What’s your AI Strategy?

07 Jan

The other day, I listened to Bill Gates explain the Internet to David Letterman in a 1995 YouTube clip. Letterman asked him, “Are you familiar with this internet thing? What the hell is that exactly?” Gates explained that it has become a place where people publish information. You can even have your own homepage! The clip is hilarious but shows how far the world has come in 30 years. You can check out the clip here. So here we are today. Artificial intelligence (AI) is a hotter topic than the cloud was in the early 2000s. A stock skyrockets to oblivion if a company mentions “AI” on their conference call. Don’t believe me, check out the 2-year chart on Nivida.

This site is dedicated to licensing, strategy, and, of course, service providers. As a service provider, what do you think of AI? What are Microsoft’s plans around AI? What are some steps you can do now to prepare for whatever or wherever AI may lead us?

Microsoft announced earlier that they will spend approximately $80 BILLION on AI-enabled data centers. That pretty much sums up the question on what Microsoft plans to do around AI.

I came across several organizations that are now offering AI as a Service (AAS for short, close to ASS but…) It’s interesting how an organization can adapt, create a new service offering, and still continue to offer the same solution as they did prior. As a cloud partner or CSP Partner, you can join the AI Cloud Partner Program, allowing you to access enhanced skilling, specializations, co-sell marketing funds, and incentives. They defined this as your “foundation for success.” I get it, I sound like a Microsoft commercial, but It is available through the Microsoft partner center if you want to learn more. It’s also a way to connect with other providers in this area.

That’s all great, but AI is only as good as the data and information it collects. I would argue that the first step to your AI journey (or the foundation for success) is understanding how and where you collect your data? Azure solutions, such as Purview, can help identify and solve data sprawl if implemented correctly. AWS has a similar solution called Amazon Macie. Whichever partner you work with, make sure your data is collected, protected, and relevant.

If your strategy is status quo, good for you. I don’t blame you. I’m SPLA Man. But I wonder what role AI will play as we are literally in the infancy phases of this new technology. Will we sound as silly as David Letterman when he asked about the internet thirty years from now? I welcome your thoughts.

Thanks for reading,

SPLA Man

or is it SPLA Man? Maybe it’s an AI generated form of SPLA Man.

 
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Posted by on January 7, 2025 in Uncategorized

 

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Welcome to 2025: What’s your licensing resolution?

02 Jan

Some people make resolutions to lose weight, go to the gym more, and maybe give up late-night snacks; for guys like me, I want to correct licensing woes for customers and partners. Imagine not having to worry about license compliance. Imagine going through an audit and not being concerned about it. Imagine billing your customers correctly and accurately, all the while gaining profitability. When working with managed service providers or hosters, sometimes licensing gets in the way of strategy. They are so focused on the service or solution, and the licensing is an afterthought until audit time. Here’s a list of resolutions to consider reducing costs, gaining profitability, and maintaining compliance. Curious about your thoughts?

SPLA Man’s Resolution Checklist

  1. SPLA reporting or any reporting should be considered business intelligence, not just a requirement by Microsoft. If you are underreporting, what that tells me is you are not charging your customers accurately either. And of course, you are also out of compliance. In essence, you are losing out on additional revenue all along and you have to pay for the licensing anyway for not reporting accurately.
  2. Understand your end customer options. This is a big one for a lot of companies. In every audit engagement I have ever been a part of, the question is asked: “The licenses are my clients; I have no idea what is installed or even care.” The reality is Microsoft auditor’s care. You have to prove or provide evidence that what you are doing is accurate. No evidence? You could be on the hook. As a resolution, I would understand all the different licensing programs available for customers. Take a look at Flexible Virtualization or outsourcing scenarios. Not only can you reduce your costs but you can provide an added value for your customers. Licensing knowledge is a differentiator.
  3. Understand your agreement. You are allowed 20 users per data center to access the software and not be out of compliance. There are ways you can provide testing or demonstrations without licensing costs. There is also language in the agreement about audits. What must you provide to the auditors, and what servers are you required to give them access to?
  4. Have strong contractual language with your customers about who is responsible for what. AWS does a great job of this. They tell their customers “We are responsible for everything under our Microsoft agreement, but you are responsible for everything under yours.” End-customer licensing has separate terms and conditions. All the new program updates involve end-customer licensing, not SPLA. Think Flexible Virtualization, Authorized Outsourcer, CSP, etc.
  5. Perform your own risk assessment. During an audit, Microsoft will perform an Effective License Position Report (ELP). This report shows everything installed and then compares it against everything you reported. It is critical to perform this assessment before an audit occurs. This is the key to resolution 1, which is mentioned above, regarding business intelligence. This report will show where you have license gaps, but also ways you can reduce your reporting. Did you know an engineer installed Visio, and ALL of your users have access? Did you know you can consolidate your SQL Server footprint significantly?

If you are interested in the above resolutions, how do you perform them? We developed a team of licensing experts, including ex-auditors who know the programs and can create this ELP report for you. It is not uncommon to find millions of dollars of risk, but our goal is to help you identify and correct the licensing gap before it becomes a risk to the auditor. If you want to learn more, email info@splalicensing.com. Together, we can make 2025 the best year ever.

Thanks for reading,

SPLA Man

 
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Posted by on January 2, 2025 in Uncategorized

 

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Azure Arc is Replacing SPLA

03 Dec

Good, bad, or indifferent, Microsoft is pushing to replace SPLA. The writing is on the wall; SPLA is D.E.A.D. Then I woke up. My heart was pounding, sweat dripping from my brow, and my wife whispering to tell me everything was OK, it was just a dream. SPLA Man is still alive. But for how much longer?

Thank goodness it was just a dream. But the reality is things are changing. It’s CSP Hoster, it’s Flexible Virtualization, it’s Azure Arc, whatever the topic, change is on the horizon. What’s interesting about SPLA to me is the following:

  1. My anonymous sources tell me it is roughly a 7 BILLION dollar business globally. I know that is how much Microsoft probably spends on toilet paper annually, but for any other company, a 7-billion-dollar business is massive.
  2. Imagine running that 7-billion-dollar business without any overhead. There are very few licensing resources; Microsoft just discontinued their getlicensingready program. The only actual expense in my eyes is paying a 3rd party audit firm to collect revenue. Even in that scenario, there’s a massive return on investment.
  3. Hosters still love SPLA. Why? All the other programs Microsoft introduced has nothing to do with SPLA, but everything to do with end-customers. In SPLA, hosters control the end-end customer experience. In CSP, one hoster mentioned “We are just another reseller.”
  4. Microsoft continues to raise pricing but it has little impact on hosters. Hosters do not price solutions based on the cost of an individual license, but on the overall solution.
  5. Compliance risk has always been an issue, but it is present no matter what you do. Even in Azure Arc, there’s no license verification; you simply check a box. Does your Azure admin understand the licensing impact?

I don’t know if I just provided a case for SPLA, but it doesn’t appear it is going away anytime soon. You must understand your different licensing options and use cases, know your risk before it becomes a risk, and, lastly, if you want to move to Azure, go for it. But I recommend understanding what is going on in your own data center before moving to someone else’s.

Have a question or worried about your next audit? email info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on December 3, 2024 in Uncategorized

 

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What is the Purpose of Using AD Scripts?

14 Aug

Great question campers.  Glad you asked.  This is one of the most painstaking processes during an audit.  Not only do you have to run scripts, discover licensing gaps, and ensure all user groups are accounted for, you have to spend time collecting this information in which your team could be focusing on other projects.  So why do they go through this?

The bottom line is to ensure completeness and accuracy in reporting. For instance, let’s say you report ‘x’ number of servers for a particular customer, but there are additional servers in the domain that you should have reported and were responsible for.  Auditors use this output as a way to ensure they have all the servers.  The other reason is to discover user-based licensing products.  As an example, an auditor might discover a user group within AD has access to workloads you thought they did not have access.  Or maybe they discover AD is indeed restricted and you were reporting them anyway.  No, you won’t get a discount for over reporting, but at least you can correct future reporting.

Do AD scripts need to be run on each customer’s environment?  At a minimum, it needs to be run across all customer domains for which the hoster (who is going through the audit) is responsible.  If it’s the end-customers AD, and some servers are not your responsibility, then it’s not as critical – especially if RVTools would capture the in-scope machines.

It’s VERY important to have language in your agreement with your customers that explains when there are end-customer servers, the different licensing rules, and who is responsible for what.  I have witnessed hosters lose customers over this disagreement.   It is a lot easier to be upfront with your customer, so come audit time, you are prepared, and so is your customer. 

One last note: all the new licensing changes (flexible virtualization, mobility, CSP Hoster) have nothing to do with SPLA; it is all about end customers.  If you can help your end customers, be prepared; it will separate you from your competition.

Do you have a question, or are you going through an audit?  We can help you.  Email info@splalicensing.com to learn more.

Thanks for reading,

SPLA Man

 
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Posted by on August 14, 2024 in Uncategorized

 

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CISPE and Microsoft Settlement – Good or Bad?

24 Jul

You might have heard that the Cloud Infrastructure Services Providers in Europe (CISPE), which has 27 members, filed a complaint against Microsoft in November 2022. If you recall, its complaint concerns the unfair advantage of running Microsoft workloads in public clouds that are not in Microsoft Azure.

Microsoft “settled” (use of quotation marks because they have nine months to adhere to their commitment) that will allow a more enhanced version of Azure Stack HCI for European hosters. What’s interesting to me is Azure Stack HCI forces customers to run Hyper V. Does this enhanced version allow those hosters (almost every hoster I work with) who deployed VMWare the opportunity to partake in this offer? Does it lower licensing costs? What about the USA? We’re a mess already. Can we at least get this Azure Stack HCI?

I am not sure this settlement matters as much. I spoke to one hoster who asked about Listed Providers (Google, AWS, Alibaba). What options will Microsoft provide to them? We kind of laughed at the question because we knew the answer—not much.

Here’s my take on this for what it’s worth. For the past 24 months, Microsoft has been promoting Azure to hosters, whether it’s Azure Stack to monitor everything from one panel to CSP Hoster or Flexible Virtualization. Although there are many different programs and options for hosters and end customers to participate in, licensing is increasingly becoming more difficult. Regardless of the settlement, my recommendation for hosters is to get your own house in order before considering whatever Microsoft and the European courts decide. Here’s a small list of things to consider:

  1. How do you know what is installed? (the process to report or purchase licensing each month)
  2. Are you aware that different programs have different use rights? Flexible Virtualization requires CALs, but CSP Hoster does not.
  3. Flexible Virtualization requires ACTIVE Software Assurance. How do you track end-customer licensing?
  4. What kind of language is in your agreement with your customers around software audits?
  5. How do you know which cloud provider is the most economical?
  6. An end customer can have a CSP agreement, EA Agreement, SPLA through the Hoster, Open Value, and PAYG (Pay as you go) through publishers directly. How are you tracking this?

Need help or have a licensing question? Email me at info@splalicensing.com. Don’t wait for things to happen; make them happen. Do it. If you license 100 or 5 million dollars a month, don’t you want to ensure it is right?

Thanks for reading,

SPLA Man

 
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Posted by on July 24, 2024 in Uncategorized

 

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CSP Hoster Assessment

15 May

The CSP Hoster Assessment: Microsoft launched a new initiative to ensure compliance within the CSP Hoster Program. Just because you are not using SPLA does not mean you are immune to compliance risk.

What do you need to do?

The first thing you should do, is take a breath. You will be fine. (maybe) Nah, the world does not end because of an audit, but you do need to prepare. Here is a checklist to ensure what you are doing is accurate. Have a question? email info@splalicensing.com to learn more.

  1. Are you a CSP Hoster? Dumb question, but this is for CSP Hoster only, not the Flexible Virtualization Benefit.
  2. Are you providing the customer with the licenses? Meaning you are not using your own licensing, correct? Remember in the CSP Hoster program, the end customer is the licensee.
  3. When was your last audit? This is important because usually there is a settlement date.
  4. Are you reporting the licenses accurately to Microsoft?
  5. How are you tracking the licenses and deployments? Do you have a way to track SPLA and CSP?

Remember, in any engagement, Microsoft is trying to verify what you are doing is accurate and fits withing the licensing terms. Unfortunately, with hosting, there are several different terms and conditions to adhere to. There’s the SPLA (SPUR) there’s volume licensing (EA’s) and now CSP and Flexible Virtualization. If you are not sure what the rules are, let’s set up some time to review in greater detail. This is a great opportunity to eliminate any risk before it becomes a risk.

Thanks for reading,

SPLA Man (or maybe CSP Man)

info@splalicensing.com

 
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Posted by on May 15, 2024 in Uncategorized

 

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MSP Global

08 Nov

Just a quick post on the upcoming MSP Global Event. Octopus Cloud will have a booth to discuss the direction of SPLA, understanding CSP Hoster reporting and how other service providers are handling audits. This one is hosted in Germany, but there will be others as well.

Check it out! https://mspglobal.com/

If there are any events in the USA you are attending, let me know! I would love to meet you. Info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on November 8, 2023 in Uncategorized

 

Licensing Microsoft Workloads in AWS

29 Sep

If you have followed me for some time, you may know that I always like to refer to the AWS model as an example for hosters in handling licensing and educating customers. AWS has a SPLA, they have end customers, they report usage, and they have to manage Microsoft licenses.   Sound familiar? 

AWS has more complexities than the average hoster because they are a Listed Provider. There’s no Flexible Virtualization or CSP-Hoster option; they are also restricted by the Hyperscaler definition in the SPLA Agreement, limiting certain use rights for specific products. So how do they win?

If you take one thing away from this article, please educate your end customers on licensing. AWS does a phenomenal job at that as compared to Microsoft. They have very informative licensing videos and a dedicated webpage specifically for Microsoft licensing inquiries. You can check it out here. I would do the same for your organization. Need help? You can email info@splalicensing.com

What are the licensing rules for running Microsoft workloads using AWS? Glad you asked. As mentioned, AWS is a Listed Provider, which means they have restrictions on workloads end customers can bring into their datacenters. For example, they cannot host a Windows 10 Operating System from their datacenter in shared environments because they are not authorized outsourcers. Let’s review some licensing challenges and options for end customers using AWS.

October 2019 Microsoft Licensing Changes

Changes were announced on October 1, 2019, that prohibited software without License Mobility to be installed in a Listed Providers datacenter regardless of whether it is dedicated (single-tenant) or shared. A good example of this is Windows Server. If you purchased Windows Server after 10/1/2019, you can no longer bring that Windows license to AWS. You can still install it on dedicated infrastructure if you purchased it before 10/1/2019 and the version was publicly available. Once you upgrade, you can no longer leverage your existing Windows licenses.   As a regular hoster (non Listed Provider), you can still run workloads in dedicated environments without issue. 

It seems unfair, especially since Azure has Hybrid-Use-Benefits.  One way AWS solves this issue for customers who want to upgrade or maybe purchase the Windows license after 10/1/2019 is to offer the “License Included” option. The end customer will lease (through SPLA) the Windows Server license. In many cases, end customers no longer want to mess with the licenses; they can purchase them from AWS and move on.

No Flexible Virtualization Benefit 

Microsoft does allow AWS customers to bring their M365 apps for Enterprise (workspace only) to their environment. They also can provide Windows desktops on dedicated infrastructure only, but with restrictions, they have to pay for the VDA license (M365 VDA E3 or E5). That is an increased cost for end users to use AWS versus an authorized outsourcer. However, they offer Windows Server + RDS to emulate a desktop and offer it as a service. This is a less expensive option, and end users would not know the difference. Using Windows Server + RDS + M365 apps for Enterprise makes a good bundled solution. As a hoster, you can offer the same thing.

End of Security Updates

I get asked a lot about this in the community.   Windows Server 2012/2012R2 support will end on October 10, 2023. That’s a big deal. What is ESU? This means Microsoft no longer offers patch security updates for products that reached their expiration (Windows 2012 – October 10 and SQL 2012 – July 12). Customers can bring their licenses (with SA) that are ESU eligible to AWS. Quick note: SPLA licenses are eligible. You purchase the ESU SKU from CSP or Microsoft directly.

What does AWS think of the new licensing rules? Flexible Virtualization/CSP Hoster/Listed Provider?

Are they happy? No. But one of AWS’s big advantages is they are not Microsoft. The cloud space is minimal right now. It seems odd to say that, but there are a lot of on-premise workloads not in the cloud. There’s an opportunity for everyone, including you (SPLA provider).   One thing that is consistent with Microsoft is change. No matter what Microsoft does, how will you help win customers and keep the ones you already have? I think AWS does a great job at both. With all the new changes, I believe, brings opportunities. Help your customers understand the licensing rules, and you will win.

Thanks for reading,

SPLA Man

 
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Posted by on September 29, 2023 in Outsourcing Scenarios

 

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SPLA Paused!

28 Sep
SPLA Paused!

In certain markets, Ukraine, Turkey, Iraq, Brazil, India, Poland, and a handful of others SPLA is paused. What does “pause” mean and what impact does this have if I am a hoster in the US or UK?

Well, kind of like an audit. take a breath. SPLA is not dead. In fact, globally, SPLA continues to grow. This pause is for net new hosters who want to sign up in the program. If you are an existing hoster, there’s no impact. You can continue to use SPLA and even renew SPLA with updated terms. I think the bigger question is SPLA moving forward, and what changes do I see happening. To answer that question, let me share an example.

This morning I had the pleasure of speaking to a large hoster in Europe. We discussed SPLA and his thoughts on CSP. He’s an infrastructure provider, mainly hosting Windows, RDS, and a little SQL. Most customers bring licenses into their datacenter. He’s not interested in using Azure or AWS, he wants to host out of his datacenter, and uses it to differentiate amongst the larger providers. End customers bring licenses into their datacenter and they host it.

Wow SPLA Man, that’s a turn pager of a story. Tell me more!! Sure. I think this hoster is what SPLA is about. No one is a SaaS provider using SPLA. Hosters don’t provide Office as a service through the SPLA program. They provide Windows Server (it’s cheap) and they provide SQL (it’s expensive). What he likes about SPLA is the flexibility. He controls the customer end-to-end. Unlike CSP hoster, Microsoft does not know who the end customer is in SPLA. That’s where I see SPLA changing. In fact, with this latest announcement, they state “change is the first in a series of changes evolving the SPLA program. Future changes, including new SPLA agreement templates and a new process of reporting and submitting END CUSTOMER USER DATA for compliance verification are also planned”

End customer data has and always will be the problem with SPLA for Microsoft. They want to control the end customer and know why and how they are purchasing their software. Other than that, SPLA is a huge benefit to Microsoft. Differentiates Microsoft from AWS and the like.

If you are an infrastructure provider (like in the story above) what should you do now? I will keep saying it, start with education. Arm yourself with the best licensing practice around. This licensing environment in which we live is changing rapidly. Second, I would communicate these changes to your customer and how they may impact the way they purchase Microsoft products. All the changes that happened over the last few years, has zero impact to SPLA. It is all about the end customer. Last, I would start developing a SAM practice internally. You need to clean up your own mess before you do anything else. You should look into using OctopusCloud

More to come on this. I am also doing an interview with AWS and Microsoft. Stay tuned for more.

Thanks for reading,

SPLA Man

 
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Posted by on September 28, 2023 in Uncategorized

 

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