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Why Timing is Everything

29 May

Whether you’re signing a new SPLA or renewing your old one, timing is everything.  When you sign an agreement, you are bound by the use rights at the time of sigining.  For example, if you sign a new SPLA in April, 2013 you will be bound by the SPUR (product use rights) for April 2013. 

Why is this important?  As with technology, licensing is always evolving.  As an example, with the release of SQL 2012, Microsoft switched from a processor based licensing structure to a core based licensing structure.  Since the 2013 SPUR only has core licensing (not processor), you will be forced to license by core when you sign a new SPLA regardless of which version you have installed. In other words, anyone (whether renewing or new) who signs an agreement after December 31st, 2012 will be forced to license by core. 

Windows 2012 is another change that can impact your usage reporting.  With the release of Windows 2012 last August, anyone who signs a new SPLA after August 31st, 2012 will be forced to license by the 2012 use rights.  You can run previous versions such as 2008, but you will need to license by the current SPUR. 

What happens if you sign a new SPLA in August before the license change?  You will have 3 years (SPLA is a 3 year agreement) to license the old way.  The catch? If you migrate any servers to the 2012 version you will have to license those servers by the 2012 use rights.  For example, if you are running SQL 2008 R2 Standard edition and decide to migrate to SQL 2012 Standard edition, the new server will need to be reported by the core not by processor!

Ask in advance for the licensing impact before renewing your SPLA agreement.  Better yet, follow this blog for the latest updates and you will be well prepared!

Thanks for reading-

SPLA Man

 
17 Comments

Posted by on May 29, 2013 in Compliance, SPLA General

 

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Why I Love License Mobility (Farm Edition)

15 May

Life is full of little surprises, license mobility within server farms happens to be one of them. License mobility within server farms allows a service provider to take advantage of virtualization without the worry of over licensing or for that matter; under licensing.

Let’s say you have a host machine and that has (2) 6 core procs running 10 virtual machines. You want to run SQL Enterprise. You also have a second host, within the same server farm. The VMs on one machine can migrate to the other. You have to license both hosts right? Wrong! Here’s why.

The old licensing methodology would require you to license both hosts. The new methodology, would allow you to license 1. In the above example, you would need to license 12 cores of SQL Enterprise. You have to license the host with the most cores, but at least it is just the one host! What’ the caveat? You cannot have both hosts running VMs at the same time. If you do, you must license both hosts. Check out the SPUR. Not all products allow license mobility so be sure to check!

The definition of a server farm is as follows:

Assigning Licenses and Using Software within a Server Farm

You may determine the number of licenses you need, assign those licenses, and use the server software as provided in the General License Terms.  Alternatively, you may apply the use rights below.

Server Farm. A server farm consists of up to two data centers each physically located:

  • in a time zone that is within four hours of the local time zone of the other (Coordinated Universal Time (UTC) and not DST), and/or
  • within the European Union (EU) and/or European Free Trade Association (EFTA).

Each data center may be part of only one server farm. You may reassign a data center from one server farm to another, but not on a short-term basis (i.e., not within 30 days of the last assignment).

Please check out the products in the SPUR to ensure the mobility rights apply. Keep in mind, not all products are eligible.  For example, SQL Web does not have mobility rights, but SQL Enterprise does.  Be Careful!

In my opinion, this is a great way to take advantage of virtualization, reduce licensing costs, but more importantly…be compliant.  If an auditor were to come knocking on the door to your datacenter, there’s not much they can say if you take advantage of unlimited virtualization rights such as Windows Datacenter and SQL Enterprise 2012.

Thanks for reading,

SPLA Man

 
2 Comments

Posted by on May 15, 2013 in License Mobility

 

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How to License Exchange

04 May

Article update: We created a new website called MSCloudlicensing to help SPLA and CSP partners understand the different program options and use rights available to them. The site is designed to be a collaborative platform,  which includes a forum to ask and answer licensing questions, document library, and licensing articles.  It’s more in depth than a simple blog. Check it out, it’s free!  www.mscloudlicensing.com 

 

 

 

In my years of managing the SPLA program, I came to the conclusion that no one likes to babysit an Exchange server.  Organizations do not have the resources or the time to constantly monitor a server, and hosters (if that’s a word) feel the pressure of managing a mission critical application such as email.  If it goes down, not only can you lose a customer, but the customer might lose business as well!

For those hosters that feel up to the challenge, Exchange can be a very profitable opportunity.  Whenever there is complexity, along comes value…which every hoster needs to run a business. What’s the downside? As always, there’s a concern over licensing.

Exchange for SPLA partners (hosters) comes in five flavors: Exchange Basic, Standard, Standard Plus, Enterprise, and Enterprise Plus. Each comes with different functionality as well as price. From experience, 90% of what is being reported is the Exchange Standard SKU. The breakdown of each SKU is as follows:

Exchange Basic – Think of OWA/POP Mail only
Exchange Standard – Features of Exchange Basic as well as shared calendaring and mobile device synchronization
Exchange Standard Plus – Features of Exchange Standard plus the full Outlook client
Exchange Enterprise – Includes all the features of Exchange Standard as well as unified messaging and anti virus/spam features
Exchange Enterprise Plus – All the features listed above plus the full Outlook client

The list above is just an overview, for a full feature list check out the SPUR (user section). The way you license Exchange is by user. Every user that HAS access to the software will need a license; not who does access. Think of your cable company, they will charge you regardless if you turn your TV on or not. User licenses works the same way.

In my opinion, the key to a successful Exchange launch is to offer a multi-tenant (shared) environment. If you license Windows by processor (Exchange runs on a Windows OS) and Exchange by user, the more users you have on that particular server the less expensive it is for the user. Eventually all you are charging is the cost of the Exchange license. That’s how large service providers are able to seemingly charge less. They have thousands of users accessing a limited number of servers in a shared environment.

If a customer wants a dedicated environment (one server hosting one client) the end customer can bring their licenses to you and you host it for them, or provide the licenses via SPLA, but the cost per user is going to be higher (unless it’s a large enterprise).

Once you offer Exchange, it makes it easier to offer other collaboration applications as well; such as SharePoint, CRM, and Lync. Who knows, you might become the next Amazon or Rackspace.

Thanks for reading!

SPLA Man

 
14 Comments

Posted by on May 4, 2013 in Exchange

 

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Hosting SharePoint 2013

29 Apr

The newest addition to the SharePoint family has features that are built off it’s younger sibling; SharePoint 2010, but offers cool/semi cool new features as well.   For a full list check out Microsoft.com/sharepoint.

Personally, we don’t care about the features, all we care about is how to license it!  SharePoint 2013 for Hosting Providers is not overly complicated, and if you knew how to license SharePoint 2010, chances are you will know how to license the 2013 version.

To license SharePoint 2013, you will either need to license by user (intranet sites) or by processor (extranet site).  If it’s for your customers employees or contractors, you have to license by user (SAL).  If you require Enterprise functionality, you will need to license SharePoint Standard and Enterprise together. (SharePoint Enterprise is an additive license to Standard).

Some things did change with the new edition.  For starters, I noticed the lnaguage in the SPUR has changed for the processor based license.  It now reads:

All content, information, and applications accessible by internal users must also be accessible to external users. Access to servers that provide content, information, and applications that are limited to internal users, must be licensed under SharePoint Server 2013 SALs. “External users” means users that are not either (i) your customer’s employees, or (ii) your customer’s onsite contractors or agents. All other users are “internal users.”

In other words, if you have users that are external and internal, you can license by processor for both scenarios.  The trick is this – the same information has to be accessible to both groups.  If it’s not, you would have to license internal users by SAL and external users by processor. If you are running this in a virtual environment – you will have to license the virtual processors.

To recap:

1. If you license SharePoint by user (internal employees only) you need to report SharePoint Standard Sals.  If you need SharePoint Enterprise, you need to report SharePoint Standard + SharePoint Enterprise

2. SharePoint requres SQL  (either Standard or Enterprise)

3. SharePoint Foundation is free.

4. Always report Windows

5. External users = processor.

6. Virtual environment? – Must license virtual procs (if external)

I wrote a new blog post that tells a fictitious story about a SPLA licensing SharePoint incorrectly. You can check it out

Don’t be Dave – Hosting SharePoint 2013

Hope this helps!  Thanks for reading.

SPLA Man

 
13 Comments

Posted by on April 29, 2013 in SharePoint

 

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What CAN I do with my SPLA Licenses?

04 Apr

When it comes to licensing, most of the time we discuss what you cannot do with the licenses.  Today I thought I would touch on what you CAN do with Microsoft licenses as it pertains to the SPLA program.   I came up with a list of ideas that you can take advantage of being a Microsoft hosting partner.

  • Use SPLA licenses internally.  There is a 50% rule with SPLA that states you can use 50% of what you are hosting for your internal employees.  Let’s say you are hosting 10 Exchange licenses externally, the terms of the agreement states you can use up to 5 licenses internally.  These licenses are not free, you would still need to report those 5 licenses on your monthly report (report a total of 15 licenses to your reseller).  One way of reducing your volume licensing count.
  • 60 Day Evaluation – This allows a service provider to host an application as a trial for up to 60 days per customer!  Trick is you cannot receive a fee during this period.
  • Customer Owned Licenses – Customers can bring their own licenses into your data center and you can host the software for them.  The issue: you must host it in a physical dedicated environment (nothing shared amongst other customers).
  • Install Servers on Customers Premise – As long as you own the hardware, you can locate the server at your customers location.
  • Receive the latest version. As new technology is released, you will have access. (check SPUR for availability)
  • Partner with another service providers to host the software.  This is especially important for customers looking to deploy a Dynamics solution but are not Dynamics authorized.

It’s refreshing to write about what you can do. Microsoft is not always the bad guy!

Thanks for reading!

SPLA Man

 
8 Comments

Posted by on April 4, 2013 in Compliance

 

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Windows Virtualization for SPLA Partners

15 Mar

If you were to ask me “What’s the number one question I receive day in and day out in managing the SPLA program?” Without hesitation my answer would be “Windows virtualization.” Windows is not overwhelming complex, but it is the most reported/licensed SKU in the program. All Microsoft software runs on a Windows operating system and is required to be licensed!

With the release of Windows 2012, there are only two SKUs that allow virtualization; Windows Datacenter and the ever so popular Windows Standard. With Windows, you must license each physical processor (not core) on the host machine that will allow “x” number of virtual instances. For example,if you have a (2)processor box with (1) virtual instance licensing Windows Standard; how many processors do you need to report? The answer is (2). Another example, let’s say you are running the same server (2 processors) with (2) VMs. How many do you need to report? The answer is (4). The SPUR (Service Provider Use Rights) for Windows Standard edition states you must license each physical processor that allows (1) virtual instance. If you run a second instance, you must license each processor on the host machine again. This can add up pretty quickly!

What happens if you are licensing Windows Datacenter on a (2) processor box with (4) virtual instances? You would only need to report (2). Windows Datacenter allows unlimited virtual instances. You must license each physical processor on the host machine (regardless which virtual technology you are running. i.e. VM Ware or Hyper V) that will allow you to run unlimited virtual instances. This by far is the less complicated way to go and in a lot of ways, the most cost effective. Most service providers are virtualizing to lower hardware costs, this is one way of reducing your overall licensing spend as well.

Hope this helps and thank you for reading!

SPLA Man

 
15 Comments

Posted by on March 15, 2013 in Windows Virtualization

 

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SPLA Compliance Audit- How Not to be the Chosen One!

05 Mar

If you recently went through an audit or just nervous about being notified, I outlined ten steps that service providers can take to arm themselves more efficiently and be compliant.

  1. If you are running Microsoft software, you must license Windows.  All Microsoft software runs on a Windows OS.
  2. If you are licensing SharePoint- SharePoint requires SQL and Windows.
  3. Reporting SharePoint Enterprise you must license SharePoint Standard
  4. Installing Office on a server requires Remote Desktop (RDS) licenses.  Office and RDS licenses should match (cannot have more Office licenses than RDS licenses)
  5. If you have customers bringing licenses into your hosted environment you need to host it in a physical and dedicated environment.  (nothing shared among other customers)
  6. If you are reporting user licenses (SAL- Subscriber Access License) you need a license for each user that has access.  For example, if you have 10 totals users in the month of May and only 4 actually use or access that software, you must license all 10.  SPLA user licenses are similar to your cable bill; your cable provider is going to charge you regardless if you turn your TV on or not.
  7. If you have customer owned licenses in your environment, you must keep all relevant documentation.  This includes enrollment information, start date, end date, and who they bought the licenses from.
  8. Renting out a PC make sure the PC has an OEM license preinstalled.
  9. No virtualizing/streaming Windows desktop OS from a datacenter.
  10. You can install your server on a customer premise, but do not install SPLA software on your customer’s server!

This is not bulletproof by any means.  Use this as a guide when looking at your own environment.  Look at it from the auditors eyes.  What information would they need to verify that I am compliant? The SPUR (Service Provider Use Rights) is the best reference when it comes to Microsoft SPLA.  You can download a copy here.  If you have trouble sleeping at night; this is a must read.

Thanks for reading,

SPLA Man

 
1 Comment

Posted by on March 5, 2013 in Compliance

 

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Office 365 Under SPLA

26 Feb

Article update: We created a new website called MSCloudlicensing to help SPLA and CSP partners understand the different program options and use rights available to them. The site is designed to be a collaborative platform,  which includes a forum to ask and answer licensing questions, document library, and licensing articles.  It’s more in depth than a simple blog.  www.mscloudlicensing.com 

Document Library: Easy to read white papers on licensing and best practices. What really happens in an audit? How are other service providers handling CSP and Azure? AWS licensing? https://mscloudlicensing.com/document-library/
Forum: Experts always review and answer your licensing questions. https://mscloudlicensing.com/forum/
Articles: Most of the splalicensing.com articles you are used to reading and many more on CSP, Azure, AWS, and other cloud providers.
https://mscloudlicensing.com/subscription/

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With the release of Office 365, the Microsoft hosting community has been asking “What’s in it for us?”   At a glance, I would agree, especially when it comes to Office.   Office can be installed on up to 5 devices with Office 365, under SPLA, you have to install it on a server and have remote access into the server.  This would require not only Office, but RDS and Windows Server!  Microsoft did recently (January, 2014) announce RDS mobility rights. More details found here. I also wrote why Office needs to have mobility rights or else the entire “Office 365” type experience (from a licensing perspective) won’t work. Check it out here
If I was in the hosting business, I would not try to compete against Office 365 from a licensing perspective; I would embrace it.  The most successful service providers offer Office 365 as part of their solution.  For example, if you host SharePoint, like it or not the end customer is going to look at Office 365.  They will want to compare your solution to Microsoft’s. What differentiates your offering to Microsoft’s?  There’s the obvious – you are regional or local, you can offer customization, you can also offer dedicated or multitenant environments; but more importantly you can offer services. Customers want to move to the cloud, the question is “how do they get there?”  This is what you do.  This is what you are great at.  This is where you can increase your margins. Back to my SharePoint example, if you say to your customer – “here’s Microsoft’s SharePoint and here’s ours.  We will help you facilitate to Office 365 if you choose (become the partner of record) but here is what you will be missing.”  You are promoting your brand and not shunning Microsoft’s.  I like what FP Web is doing.  They are the SharePoint experts and are wiling to compare their solution to Microsoft’s on their website.  Check it out for yourself http://www.fpweb.net/why-us/compare-o365-fpweb/

From a SPLA licensing perspective, the only bundled SKU is the productivity suite.  This includes Lync Enterprise, SharePoint Standard, and Exchange Standard.  It does not include Windows, SQL, or Office. Windows processor licenses allows unlimited number of users to access, the more users, the less expensive it is. Eventually all you will be quoting is the Exchange license.  (if you are an Exchange only provider) That is how large service providers are able to hold down their costs.

Other option to Office 365 is to offer License Mobility.  License Mobility allows your end customers to purchase licenses (with Software Assurance) and bring it into your environment.  The advantage for the customer is volume discounts, and the advantage for the service provider is the ability to offer this in a multitenant hardware infrastructure.  The virtual instance has to be dedicated, but the hardware it resides on can be multitenant.  This is only if the customer has Software Assurance and the service provider signs the license mobility addendum.  Windows is not included and would have to be reported under SPLA.  I will write another blog on license mobility.  Stay tuned.

Thanks for reading,

SPLA Man

 
22 Comments

Posted by on February 26, 2013 in Office 365

 

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What is SPLA?

26 Feb

Article update (April, 2018 ) New use rights and updated articles on SPLA and CSP could be found at https://mscloudlicensing.com/blog-articles/ . Including best practices in reducing audit exposure, use rights and guidelines for SPLA licensing.

SPLA stands for Service Provider Licensing Agreement (SPLA). The key difference between a SPLA license and a license that comes with a boxed product (similar to something you would buy at a retail store) is the person who uses the software. The software you buy at a retail store can only be used by the person who purchased it. SPLA on the other hand, is designed for hosting companies that provide software as a service to their customers. It is for third-party access, not internal employee access. For example, if a company wants to host an Exchange server on behalf of another organization, the Exchange license needed for this access would be SPLA. Some other common examples of organizations that use SPLA are companies such as Rackspace, Go Daddy.

SPLA is a month-month licensing program. If a service provider has 10 users who has access to the software in the month of February, they would pay for those 10 users in the first week of March. In March, if they have 10 users they would report those 10 users the first week of April, and so forth. SPLA is very flexible, it allows usage to scale up and down on a monthly basis. It is non perpetual, after the service agreement ends, no one actually owns the licenses. Think of SPLA as a leased software program designed for hosting companies who want to offer Microsoft software as a service.

Is the SPLA program right for your business? Here are some common business’ that fit the SPLA model.

Web Hosters

Independent Software Vendors

Application Providers

Hospitals

Managed Service Providers

Online Gaming Providers

Telco Companies

This program is only available for external users and is not designed for internal employees. For anything internal, you will need to purchase a volume licensing agreement not, SPLA.

Thank you for reading,

SPLA Man

 
4 Comments

Posted by on February 26, 2013 in SPLA General

 
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