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Category Archives: Data Center Outsourcing

Do you have SA? Why this question really matters.

Brett’s Hosting’s sales director is consistently looking on the web to see what competition is advertising.  It drives him nuts to see other “hoster’s” advertise SharePoint for less than what he can get directly from his reseller.  He’s upset..big time.   How can this be?  Then he stumbles upon the Microsoft Office 365 website.  He blew a gasket.  “There is no way I can compete!  I am going to go out of business!”

So the sales director decided to get creative.  “I will forgo SPLA and just have my customers purchase SharePoint.  They bring it into my datacenter, I won’t report SPLA anymore.”  So that’s what he did.  He started selling SharePoint by the truckload.  Their reseller kept placing orders for him as they’d joyfully ask  “how many CAL’s do you need?” and they would order it; never once asking what it was for.

Brett’s Hosting did a tremendous job marketing their SharePoint offering.  “No SharePoint…No Problem!” It was marvelous.  The CEO of Brett’s Hosting vociferously announced at the World Partner Conference “We are hosting over 10,000 SharePoint sites!”  The celebration continued.  Then one foggy October morning, the office manager for Brett’s Hosting received a letter from Microsoft.  She excitedly opened it thinking they were being promoted as ‘SharePoint Partner of the Year’ but was severely disappointed.  It was an audit letter.  The story turns.

Brett’s Hosting CEO reviewed the letter and then called in their sales director (now sales VP).  The CEO threatened him with his job unless he fixed this mess.  The sales director/VP was at a loss.  “Where did I go wrong.”

To be continued….

Where do you think he went wrong?  Have you ever been given wrong licensing advice?  You don’t need to answer that, I already know.

Hosting industry has changed.  Competition has changed.  End users have changed.  In my experience, the conversation has changed from “how do I license Windows” to “what are ways I can optimize my licensing spend?”  I’ve written about license mobility; I also reviewed SAL for SA.  Those two programs have a common theme – Software Assurance (SA).  In the above fictitious story, the sales person should’ve asked his customer “do you have SA on these licenses”  That question is important because if they do not have SA, the entire environment (hardware/VM) must be dedicated.

I can’t stress this enough.  The hosting game is getting brutal.  Every service provider is looking for a way to cut/reduce costs.  Getting in compliance hot water is not a good way to do that.  If the customer does not have SA, you can certainly use SPLA in its place.  If you go this route, be sure to make it a bundled solution.  Telling customers they must pay for something they already own is not an easy conversation.

The customer can also purchase SA.  You just have to be ready to clearly explain their options. That’s why it’s important to work with a reseller that understand SA benefits to help educate and coach you through the process; not all products are eligible.  Be prepared.

Story continued…

The sales vp went back to his customers and asked them to purchase Software Assurance.  When the customer asked “why?” all the sales vp could say is “because Microsoft told me you needed it.” (he clearly couldn’t explain why…it only made the customer more upset).  The customer simultaneously yelled and slammed the door –  “I’m going to Joe’s Hosting! They advertise VDI too!”

The sales vp went back to his CEO and was forced to resign.  The customer went to Joe’s Hosting and was very happy for over a year. When out of the blue he received a call from his sale rep from Joe’s Hosting.  The sales rep frantically told him they could no longer offer VDI; it apparently is not available under SPLA.  The sales rep also asked him to buy SA for his SharePoint…”Microsoft told me you needed it!” The customer loses again!

Moral of the story – read the SPUR, read the PUR, and don’t be afraid to ask “Do you want SA with that?”

Thanks for reading

SPLA Man

 

 

 

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Datacenter Outsourcing

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

 
1 Comment

Posted by on August 7, 2014 in Data Center Outsourcing

 

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