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Answers to Your Cloud Licensing Questions

Will Azure be part of the SPLA program?

I wouldn’t think so and wouldn’t know how they could incorporate the two.  Azure is Microsoft hosted and SPLA is partnered.   Microsoft will want to keep SPLA and Azure separate.

Is Azure Stack part of SPLA?

Azure Stack by itself is not part of SPLA.  What’s part of SPLA is the Windows licenses.  As a service provider, you could deploy Azure Stack, pay the base consumption rate, and use Windows licensing with SPLA.  In fact, I think it’s less expensive to do it this way.

If my customer wants to use their own Windows license on Azure Stack, do they also require CAL’s?

Yes.  You need to pay attention to the Product Terms to ensure compliance.  As an example, volume licensing prohibits hosting.  You cannot install your own Windows licenses through volume licensing and host using Azure Stack.

Does Office 365 qualify for the SAL for SA product in SPLA?

The only Office 365 product that is eligible for SAL for SA is Skype.

Is SPLA pricing going up?

Yes and will not be decreasing anytime soon.

Since AWS offers dedicated hardware, could I transfer my customer’s license to their datacenter without Software Assurance?

Yes.  If its dedicated hardware Software Assurance is not required.

What about Azure?

No, you would need Software Assurance.

Will Microsoft finally allow MSDN to be licensed in my datacenter?

Probably not.  Although if you use Azure, MSDN is eligible to be transferred.

If I sell CSP through 2-Tier distributor, can I sign the QMTH addendum?

No.  You must be CSP 1 – Tier to qualify for QMTH.

Can I outsource support for certain software through CSP?

Yes.  You an resell the solutions you can support and leverage another partner for support for other products.

Thanks for reading,

SPLA Man

 

 

 

 

 

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Posted by on November 7, 2017 in Top 5 Licensing Questions

 

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Deep thoughts with SPLA Man

As we enter the new FY at Microsoft, I thought I would put together a list of topics that’s on everyone’s mind.

  • SPLA going away?  I don’t think so.  There’s too many SPLA partners to make an entire program disappear.  I also think this is one of the benefits Microsoft has over all it’s competitors.  If a customer wants to have an application hosted in one datacenter and use Azure for disaster recovery – Microsoft wins.  If Amazon is running Windows workloads (which they are) they must pay Microsoft for that usage through SPLA.  I also think SPLA is a way to move customers to Azure.  If you are a SPLA customer who just went through an audit, the SPLA customer might ask themselves why they continue to host at all?  Let’s use Azure and my compliance problems go away.  (they don’t but that’s for another article).
  • Is CSP/QMH really a must?   I guess the jury is still out (it hasn’t even launched yet for the partner community – September 2017).  There are a lot of restrictions to this program to consider – underlying Windows Pro licenses, becoming CSP direct authorized, not using CSP Indirect, RDS licenses when deploying VDI, etc.  If you decide to go down this route, pay close attention to what you can and cannot do.
  • Will SPLA pricing increase?  Yes.  No doubt about it.  Nothing stays the same for too long.
  • How can AWS win the cloud war?   Amazon has a revenue first, profit second mentality in my opinion.  Just look at their last earnings report (2017).  They can buy their way into the SaaS market at any cost.  They are not just a cloud company, they are an everything company.  They have the leverage to really get creative with their marketing and win businesses over.
  • How can Google beat AWS and Microsoft?  Google hasn’t scratched the surface with their footprint in the enterprise space.  One slip up by the other cloud powerhouses and Google becomes a very attractive offering.  Google has the power, the money, and the brand to make headway. Like AWS, they are not just a cloud/software company, they are an everything company.  I really think Google will surprise a lot of analyst in the near future with their cloud growth.
  • How can Microsoft beat them all?  Any organization that uses Microsoft software in a hosted environment must pay Microsoft for that luxury.  They already have a large footprint and very large customer base to move to Azure.  They also have 30k + SPLA partners (estimate) that are being used to sell their solution.
  • Will SPLA Man be able to afford a nice piece of jewelry for Mrs. SPLA Man?  For all the single women who read SPLAlicensing.com, don’t make the same mistake Mrs. SPLA Man made.  Poor Mrs. SPLA Man, when I first met her at the bar, she thought SPLA was something I created for the space station. Space Program Living Association.  S.P.L.A. – kind of like a home owner’s association but for space.  (I am not sure where she got that idea).  I do have a cool blog??!

Thanks for reading,

SPLA Man

 
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Posted by on August 2, 2017 in In My Opinion

 

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Breaking down Microsoft’s Q4 and what it means for your business.

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

 
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Posted by on July 21, 2017 in In My Opinion, Uncategorized

 

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Opinion – Microsoft audits will skyrocket in 2018

Microsoft compliance programs are not going away and will increase significantly in the coming years.  Why such a doom and gloom outlook?  In this article, I will highlight some of the reasons but more importantly the ways to stay ahead of the game before Mr. Audit comes knocking on your door.

This past week, most of my articles had to do with CSP, Azure, and more CSP.   To no surprise, CSP is the direction Microsoft is moving towards for the partner community.  Check out my friend www.csplicensing.com 🙂 Licensing is not getting easier, in fact it’s getting harder.  Check out my Azure Stack article if you don’t believe me.  That article will either put you to sleep or give you a headache.

In today’s world, a service provider is not just licensing SPLA, they are combining on premise licenses, different cloud vendors, and hybrid licenses.   Unless you focus full-time on licensing, one misstep can ruin an organization.  In the coming weeks and months, I will focus heavily on all the cloud transitions and as the title of this blog site states ‘uncover the complexities of SPLA licensing.”

So why will audits rise?   There’s two reasons: 1) Licensing is confusing.  Publishers know there’s no “one-size fits all” solution to solving all licensing complexities and scenarios.  2).  With the push towards the public cloud (such as Azure), CFO’s and owners will start to wonder why they mess with the licensing at all, especially after a large compliance settlement  from an audit.  The goal will be to move to AWS or move to Azure and let them deal with the complexities licensing.

What do you do?   Throw in the towel and say, “they win” or develop a strategy to maintain compliance and create a solution to help your customers?  My advice? Don’t throw in the towel.

  1. Develop a license management practice.  Licensing is a full-time commitment (Full-time job).
  2. Don’t cave in.  I get it, that’s easier said than done – even for SPLA Man.  I HATE confrontation in all areas of my life but compliance.  I always like to see the underdog win the audit battles.  When SPLA started, I felt it was the rest of the world v. the SPLA community.  ABS – Anything But SPLA.  I still feel that way today (even stronger).  When was the last time you talked to a representative or were offered advice to help grow your business?  I am an advocate for the hosting community and the primary reason I started this blog in the first place.  Checkout my “About” section written over 4 years ago.  Don’t get bullied into the tricks of the audit.  If you need help, ask.
  3. Eliminate risk before it becomes a risk during the audit.  Going back to point #1, create a practice, understand the areas of concern, and correct it before the auditors force you to.  The time is now.
  4. I promote 3rd party advocacy for support.  I like to say, “there’s the publisher’s way and then there’s the real way” both are compliant, but one will cost you a lot more than the other.

Will audits be on the rise in 2018?  Yes. And 2019, 2020, and 2021.  After that who knows, we might be flying around the moon and vacationing on Mars.  Licensing is a dangerous game but everyone can win – if they have the right strategy in place.

Thanks for reading,

SPLA Man

 
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Posted by on July 19, 2017 in Compliance, Uncategorized

 

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How service providers can use Azure Stack in their datacenter environment

Azure stack is what Microsoft describes as an “extension of Microsoft Azure…”  to on premise (or partner hosted) datacenter environments.  In this article, we will review what it takes to deploy Azure Stack and best practices for partner hosted scenarios.

How a Service Provider Acquires Azure Stack

Azure Stack is available through the Cloud Solution Program (CSP) for service providers. Just like any other CSP relationship, the service provider will ultimately own the billing, the support (if Direct/Tier 1) or through your authorized distributor who will manage the support (Indirect/Tier 2).  Usage can be purchased through CSP or through the Azure hosting exception leveraging your existing Enterprise Agreement.  One thing to note is the actual Windows license.  In my humble opinion Windows Server in SPLA is less expensive and has the flexibility of month/month licensing.  Let’s use a couple examples to illustrate this further:

Scenario 1:  Bill sells Jennifer Azure Stack services through CSP.  Bill is Direct authorized and has a SPLA agreement in place.

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill licenses Windows Server via his own SPLA agreement.
  • Jennifer will pay Bill for her consumption through CSP at a lower rate because Bill is already providing the Windows Licenses.
  • Bill is responsible for all the support and billing because he is CSP Direct authorized.

Scenario 2 – Bill sells Jennifer Azure Stack services through CSP.  Jennifer decides to transfer her Windows Server licenses through her own Enterprise Agreement.  

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill would have to completely isolate the hardware for Jennifer if she wants to transfer her existing licenses to Bill’s datacenter environment.  As with other hosting scenarios, Windows is not license mobility eligible and therefore the Windows licenses must be deployed in a 100% dedicated cloud environment.
  • Bill will sell the consumption via his CSP Direct agreement.  Since she is using Windows licenses that were already purchased, he will only pay the base consumption rate.
  • Bill will provide the support since he is providing this as a service to Jennifer as part of the CSP program.

Scenario 3 – Bill deployed Azure Stack in his datacenter.  He’s running Jennifer’s SQL Server she purchased with SA from her Open agreement.  She will also pay Bill for the Azure Stack consumption through Bill’s indirect CSP agreement.

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill will have an agreement with his authorized Indirect distributor to resell Azure Stack through CSP.  (Bill is not Direct authorized, he must use a distributor to enable him to resell CSP to his end customers.  The distributor will provide all the support and billing platform).
  • Jennifer will transfer her SQL Server licenses and CAL’s she purchased with Software Assurance over to Bill’s shared cloud environment through license mobility.

Conclusion

These are all hypothetical scenarios used to illustrate the different licensing options available to SPLA partners.  As you can see, the licensing can be complex as you are crossing multiple licensing programs – CSP, Enterprise Agreement, and SPLA.  I am always interested in different scenarios.  Have one?  Email me at info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on July 18, 2017 in Azure, Uncategorized

 

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What is a Service Provider?

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

 
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Posted by on July 18, 2017 in Compliance, Uncategorized

 

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Top 5 CSP Questions….Answered!

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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

 
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Posted by on July 17, 2017 in Office 365

 

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