Microsoft reported earnings last night that surpassed expectations and gave us insight into their cloud business. I am not a stock analysts, but I thought I would spend some time reviewing some of the highlights and my opinion for what’s next for the software (I mean cloud, actually, no -I meant Intelligent Cloud) giant.
Azure – Microsoft did not provide specific revenue numbers for Azure, but did say revenue grew 97% y/y. Although exact numbers for Azure revenue is not specified, Azure is part of the all-important commercial space, which includes Dynamics 365, Azure, and a little program called Office 365. That revenue number combined was over 18B which more than doubled last year’s number.
Office/Dynamics and Competition – Office 365 subscription business just surpassed the traditional Office model with revenue up 43%. When was the last time you went to a box retailer and purchased software? That’s a telling sign that more and more organizations prefer subscription pricing over box products. Dynamics 365 was up 74%, probably because Dynamics in SPLA is about as complex as it can possibly get. Need help with a Dynamics licensing question? Ask your reseller. The reseller will ask Microsoft – and then it goes into a big, dark, black hole until someone loses their mind. Nothing happens. Microsoft also revamped Dynamics in SPLA to make it very difficult to compete. The same can be said for Office. Where I see concern for Microsoft is with Google, who is just getting their foot in the door in the enterprise space. If they make traction (and they will) it will be interesting to see the two giants go at it. Google’s cloud platform is growing exponentially as well.
Surface Sales – I guess you can say is one of the low points of the conference call. Surface revenue dropped 2%. Xbox sales also dropped and became less profitable with price drops and competition. That’s the bad news – the good news? Maybe with the new CSP Windows 10 thing Microsoft will include Surface as part of the program to those not already a Surface Authorized Distributor, or make Surface authorization available to every CSP Direct partner.
LinkedIN – Only Microsoft can spend over 26B for an acquisition and investors are still wondering what it is they bought; and more importantly, not hurt their quarterly earnings. Yeah, they can tie it in for Dynamics and Yammer/Teams with all those users. They also have a pretty impressive data list of users to sell additional collaboration products and services to. I guess the jury is still out on this.
Opinion – Microsoft recently announced a major change in their sales organization. Their sales teams that were focused on the enterprise need to focus more on solution type selling. A lot of organizations in the industry are going through the same transformation. It’s also not an easy thing to do. Time will tell.
I wrote an entire article without mentioning Amazon, they report earnings next week. It will be interesting to see how they compare to Microsoft and how much they grew year of year in comparison. Lots of analysis say Microsoft will surpass AWS as the king of the cloud. I still think Google is lurking in the background and might surprise some people as well.
What does all this mean for SPLA? In my humble opinion, I think Microsoft better be careful with the way they are handling their third-party hosters. Those numbers they threw out yesterday were great, but they can get even better.
Microsoft built a program for partners who have their own datacenters, relationships, and sales resources to promote Microsoft products and technology. There are close to 30,000 SPLA partners (rough estimate) that have datacenters spread throughout the globe. Nobody, can have the reach like your SPLA partners. Google and Amazon do not have 30,000 datacenters, why disrupt it? Don’t audit them, partner with them and help grow this business to build a true hybrid cloud ecosystem. The strategy should be their cloud – our cloud, and customers will thank you. Teaming with Walmart makes sense too. Say what!
Thanks for reading,
SPLA Man
Tags: Amazon, Amazon Web Services, AWS, Azure, Cloud Solution Provider Program, Dynamics 365, google cloud, Hosting, LinkedIN, Microsoft 365, Microsoft Azure, microsoft CSP, Microsoft Earnings, Microsoft SPLA, Microsoft Surface, Office 365, Qualified Multi-tenant addendum, spla, SPLA Audit, SPLA VDI
The year 2017 has brought on A LOT of change for the hosting community. A hosting company used to be an organization that hosted Exchange – fast forward to today and a service provider takes on a whole new meaning. In this article, we will take a look at defining a service provider and how it applies to licensing. Let’s play a little game called “Do they qualify” Have a question? Email info@splalicensing.com
An organization that provides or extends litigation software (that they leased from the publisher) to law firms and other legal entities who are not wholly owned by the organization providing the solution. Does this organization qualify for SPLA?
Yes. If you are an avid reader of splalciensing.com, you probably read my article on EMR Software The same holds true for any software (not just EMR) that runs on Microsoft technology that you do not own, but lease from a third-party. Remember “AS” If you are providing software AS a service that’s hosted from your datacenter environment, SPLA must be part of the equation. Why does this solution qualify for SPLA?
#1 they don’t own the software they are hosting
#2 they do not own the organization(s) who are consuming (using) the software for their benefit.
An organization who sells a product on a website to external users – do they qualify for SPLA?
No. Although they are selling something to consumers via the internet, the software used to deploy the solution benefits the e-commerce company, not the end-user. Where SPLA does fit is if the web company decides to host a website on behalf of another organization. The web company would fall under the SPLA rules. Who benefits from the access is a key question to ask yourself. Second question – is the access used to run their business or my own?
An organization who provides SharePoint to end users to share information. Do they qualify?
No. Simply sharing information does not qualify. If the organization was hosting SharePoint on behalf of another organization, that’s SPLA.
A company hosts Exchange on behalf of another organization but does not charge for this access. Does this qualify for SPLA?
Yes. Microsoft doesn’t care how much money you make from the solution. The question remains – are you providing this “as a service” for a third-party?
A company decides to use AWS as their datacenter provider to host an application they use internally. Do they need SPLA?
No. In this example, you are the end-user. AWS has a SPLA to cover all infrastructure products they host on your behalf. If you were to use AWS as a datacenter provider to host SharePoint to your end customers employees; you would pay AWS for Windows and SQL and report on your SPLA SharePoint SAL licenses.
I have 25 Linux machines that I host for my customers. Do I need SPLA?
No. You have 25 Linux machines. If you had 24 Linux machines and 1 Windows VM, you would have to license the host machine to cover that Windows VM through SPLA.
My reseller told me I didn’t need SPLA because the access qualifies for Self-Hosted. The auditors told me it does not qualify. Why?
All software used to deploy the solution has to be self-hosted eligible. I bet you are running an application that does not qualify as part of your solution. This would be SPLA. Secondly, if you did not buy the software with software assurance, that is out of compliant.
Thanks for reading,
SPLA Man
Tags: Amazon licensing, Amazon Web Services, AWS, Azure, CSP Licensing, Datacenter outsourcing, EMR and SPLA, Epic Software and SPLA, Kcura hosting, License Mobility, Linux Hosting, Linux VM's, Microsoft Azure, Microsoft Cloud, Microsoft Cloud Solution Program, Microsoft Exchange Server, Microsoft Office 365, Microsoft SPLA, Microsoft SQL, SAL, Self Hosted, Self-Hosted for ISV, Service Provider License Agreement, SPLA Compliance, SQL Licensing, Subscriber Access License, User Subscription License, VDI and SPLA, Windows Hosting
- Is the SCA addendum removed now that Microsoft announced the Qualified Multitenant Hoster addendum? Yes. SCA has been removed and replaced with the QMH addendum.
- If I have a CSP Indirect/Tier 1 authorization, can I resell Azure Stack but license Windows Server through SPLA? Yes. You will pay the base consumption rate because you A) Purchased the hardware through an authorized dealer and 2) paid for the Windows license through SPLA.
- If I am not authorized for CSP, can I still sell Office 365 to my end users? Not in the general sense. What you can do is resell CSP through a distributor or authorized CSP Indirect/Tier 2 partner. You can also partner with a CSP Direct partner to offer the solution. They would resell the actual license but you can provide services on top of it.
- I am a SPLA partner who wants to resell Office to my end users. What are my options? You can sell Office through SPLA and include RDS and Windows. You can become CSP Direct authorized and use the QMH addendum mentioned above. You can also use end customer owned Office licenses and host it in a dedicated environment.
- Will Microsoft offer QMH for Indirect partners as well? Not at this time. You must be CSP Direct to qualify, not Indirect.
Lots more on this.
Thanks for reading,
SPLA Man
Tags: Amazon Web Services, AWS, Azure stack, CSP, CSP Licensing, Microsoft Azure, Microsoft Cloud, Microsoft Cloud Solution Program, Microsoft Hosting, Microsoft Licensing, Microsoft O365, Microsoft SPLA, Multitenant Hosting Rights, Office 365, Qualified Multi-tenant addendum, SCA
Good news for those who have customers who want you to host Windows 10 in your shared cloud environment – they might now have that as an option. Microsoft recently announced “Multitenant Hosting Rights for Windows 10. You can read the announcement here
We also created a new website called MSCloudlicensing to help SPLA and CSP partners understand the different program options and use rights available to them. The new website is www.mscloudlicensing.com it’s designed to be a collaborative platform that includes a forum to ask and answer licensing questions, document library, and licensing articles. Check it out, it’s free.
What is it?
Allows customers who purchased qualified Windows 10 licenses the ability transfer those licenses over to a Qualified Multi-Tenant Hoster shared datacenter environment.
Why is this important?
For years SPLA partners have asked for VDI in SPLA. Although this is not technically VDI in SPLA, is does provide an avenue to implement a virtual desktop session from your shared server environment. At the end of the day, it gives your end customers deployment options.
Can I still license Windows Desktop in SPLA?
No. Windows desktop licenses were removed last year. You can read/download the lease agreement that outlines the details here
What are the requirements?
To no surprise, the SPLA partner must be CSP Tier 1 authorized. They must also sign the Qualified Multitenant Hoster addendum and have an active SPLA with Microsoft. To get the QMH (another Microsoft acronym) you can contact info@splalicensing.com or your Microsoft Reseller.
What happens if I offer dedicated environments? Do I still need the addendum?
No. If it is 100% dedicated (isolated hardware) you can always transfer end customer licenses over to your datacenter environment. Whenever it is shared – VM or hardware, you must consider SPLA or in this case the QMH addendum)
When is it available?
Program will be available August 1, 2017 for VL and September 6, 2017 to transact in CSP.
Can I bundle my customers Office solution they purchased as well as Windows 10 to offer a complete VDI experience?
Yes. This is a great way to bundle different desktop applications.
Conclusion
If you provide IaaS to your customers, this is definitely something you should consider. Any time you can offer your customers the ability to leverage existing investments the better. Azure is not going away. In fact, you don’t have to be QMTH authorized to leverage Azure as your datacenter provider. Please review the announcement, there will be a lot more information on this in the coming days. I will also write out several scenarios to make this more simple. As always, you can email me at info@splalciensing.com
Thanks for reading,
SPLA Man
Tags: Amazon Web Services, AWS, Azure, Cloud Solution Program, CSP, CSP Direct, CSP Tier 1, IaaS, Microsoft Azure, Microsoft Cloud, microsoft CSP, Microsoft SPLA, MS Hosting, Multienant Hosting Rights, QMH Addendum, QMTH, Service Provider License Agreement, shared computer activation, Windows 10
Why I think SPLA will not go away:
- Service Providers can differentiate. You are independent from the publisher and have unique set of offerings. The hybrid cloud, dedicated cloud, local support are all compelling to the end user.
- Warren Buffett – “Price is what you pay…value is what you get.” There’s a lot of truth in that when it comes to the hosting world. Other large providers and vendors may cut pricing, but is the price really worth it?
- You own your datacenter and no one can take that away.
- SPLA licensing rules are complex. What’s even more complex is CSP.
- SPLA is a great revenue stream for the channel. The hosting provider, Azure, and AWS all win.
- The world needs more SPLA. Don’t hate the SPLA Man.
Thanks for reading,
SPLA Man
In this article we will review how Epic Community Connect effects your Microsoft licensing position. This is a follow up to my earlier post which can be found here
What’s the concern?
If you host/extend Epic (or any EMR software that you do not own) to outside clinics or other healthcare facilities SPLA must be licensed.
What’s an outside organization?
If your organization (who hosts Epic/EMR) does not have at least 51% ownership of the other entity, that would be considered an outside organization as it pertains to this solution.
I’m confused…big time. Why would I license SPLA when I was told to license through my Enterprise Agreement?
The EA is for your own internal employees. The Service Provider Licensing Agreement (SPLA) is for companies who host Microsoft software to third parties.
Wait. I just went to your website and I am not an employee. Are you saying you have a SPLA agreement?
No. I don’t host an application or any server whatsoever. I do pay a web company to host my website. The web company is under a SPLA agreement if they use Windows Server.
What are my options now? I already deployed Epic and I don’t have a SPLA.
I would work with a SPLA Reseller who can walk you through the steps and how to be compliant. You can email me at info@splalciensing.com if you have additional questions.
Thanks for reading,
SPLA Man
Tags: Azure, Enterprise Agreement, Epic Community Connect, Epic Software, Healthcare, Microsoft Cloud, Microsoft Compliance, Microsoft Licensing, Microsoft RDS, Microsoft SPLA Reseller, Microsoft SQL, Office 365, Service Provider License Agreement, SPLA Agreement, SPLA Audit, SPLA Compliance
There are so many license changes and gotchas with SPLA, Azure, AWS, and all the others that I thought I would highlight for you some of the trends we see when it comes to compliance.
- Licensing Office Standard when Office Professional is installed. In many cases, an IT administrator will inadvertently install Office Pro, report Office Standard to their procurement team who in return reports it to the reseller. The IT admin will leave the company, and the procurement team continues to report Standard not knowing Pro is installed until audit time. In this situation, Microsoft will check when Office was installed, and take the delta of what was reported (STD) v. what should be reported (Pro). Don’t make this mistake. Many partners are only charging their customers for Standard pricing!
- Not reporting SPLA at all. Sounds silly, but many providers focus on developing software and not on the licensing. We have found instances in which the procurement manager (who was in charge of reporting SPLA) left the organization and no one else took over their responsibility. The reseller continues to email the procurement manager but obviously the email goes unnoticed. After many months, their SPLA will be terminated and all licenses will have to be trued up. The problem with this scenario is not just unexpected licensing expense, but when your SPLA terminates, you must sign a new one. When you sign a new SPLA, you must adhere to the latest SPUR use rights. As an example, if you had a SPLA prior to the Windows core licensing change, you could continue to report processors. If your SPLA terminates, you would be forced to license by core now instead of later when your previous agreement (that is now terminated) expired.
- Using a VL copy of Office to deploy Shared Computer Activation (SCA). SCA is specific to Office 365. If you install Office Pro Plus VL, it goes against the product use rights in which Office (without SCA) cannot be installed on shared hardware. It takes a lot of negotiation power and time to prove you are SCA eligible, the customer purchased Office 365, and you inadvertently installed the wrong product.
- Using License Mobility without License Mobility. This is by far the most popular compliance trend. Many organizations do not know what is installed in their datacenter when it comes to customer owned licenses. Be sure to have the right documentation, addendum, and licensing to ensure compliance.
- Leasing an application, hosting the application, and purchasing volume licensing agreement to offer software as a service. A healthcare company may lease an EMR application, host the application to other healthcare organizations, and license the infrastructure through volume licensing. If your organization does not own the application you are hosting, you must license it through SPLA. Self-Hosted for ISV is only eligible for providers who develop and own the application. This means the code, the rights, everything must be owned by the organization. Leasing the application and using other plugins you may have developed does not qualify.
I hope this provides you a little insight into the world of compliance. If you find yourself out of compliant, let us know and we can connect you to the right resource. info@splalicensing.com
Thanks for reading,
SPLA Man
Tags: AWS, Azure, Cloud Solution Program, CSP, EMR Hosting, License Management as a service, License Mobility, Microsoft Cloud, Microsoft Office 365, Microsoft SPLA Audit Support, SCA Addendum, shared computer activation, spla, SPLA Audit, SPLA Compliance, Volume Licensing
Quick update for those interested in Dynamics 365 for SPLA and what you should remember when selling to your customers.
- No Enterprise Plans in SPLA
- No PowerApps in SPLA
- Transitions SKU’s are available in SPLA
- More differences found here
Not all bad news but not all good either. You can read more about my opinion here
Thanks for reading,
SPLA Man
Tags: Azure, Cloud Solution Program, Dynamics, Dynamics 365, Dynamics CRM, Hosting, Microsoft, Microsoft Cloud, microsoft CSP, Microsoft Hosting, MicrosoftSPLA, MS Cloud, O365 Enterprise Plans, Powerapps, SaaS, spla, SPLAlicensing
We read article after article, use rights after use rights, to provide you the best and accurate information. The Cloud Insider News takes articles written by you and others to tell your story and help educate the community. In this edition, we take a look at Hosted Email. Have a hot topic? Email info@splalicensing.com
Tags: Abovethelaw, Cloud Computing, CRN, desktop as a service, Email, Email Archive, Email Protection, Exchange Enterprise, Exchange Enterprise Plus, Exchange Server, Exchange Standard Plus, Exchange Standard SAL, Forbes, Google, google cloud, Hosted Exchange, Intermedia, Intermedia Email, Microsoft Cloud, Military technologies, MSP, MSPmentor, Office 365, Phishing and SPAM, RapidScale, Vaultastic, VOnage, Wired, Zimbra, Zimbra.org
For Dynamics hosters worried about all the changes with CRM have until October 31, 2019 to license the transition SKU’s in SPLA.
Although good news and provides some flexibility, the transition pricing is still higher than current CRM licenses. As an example, Basic CRM SKU transition pricing for Customer Service is almost double!
Transition pricing is available to ease transition to the new Dynamics 365 pricing model. It is also designed for current CRM customers, not new customers. To learn more about Dynamics 365, please check out Dynamics 365 Licensing for SPLA
Thanks for reading,
SPLA Man
PS- Dont forget to license SQL and Windows with CRM!
Tags: CRM, CRM transition pricing, Dynamics 365, Dynamics CRM, Hosting, Microsoft Cloud, Microsoft SPLA, Office 365, spla, SPLA Pricing, SQL Server, Windows Server
