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Top 5 Licensing questions…Answered

  1. If a customer has 4 x SQL Server Standard (8 cores), does that mean I will also need to have 4 x SQL-SAL?

There’s no server + CAL model in SPLA.  You license either per core or per user depending on the product.  Remember, SAL is not licensed per server, but for each user that has access to that server.  Your question indicates you might believe a SAL is licensed per server which is not true.

2.  Is MSDN available through SPLA?  Is it through Azure?

MSDN is not available in SPLA, but you can license the individual components through SPLA.   If an end-user would like to bring their MSDN license over to your datacenter, you must dedicate the solution for your customer.  Yes, Amazon must play by the same rules.  Oddly enough, Azure (which is shared) does allow MSDN to be transferred over to their datacenter.

3. I received an audit notification.  Should I respond?

Yes. But don’t work on their time, work on yours.

4.  If I signed the SCA addendum, do I need to sign the new QMTH addendum?

Unless you are planning on hosting Windows 10 you do not need to sign the new addendum.

5.  If I buy from a CSP indirect partner, do I qualify for QMTH?

No.  Your company must be CSP 1 tier authorized in order to qualify.

Thanks  for reading,

SPLA Man

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Posted by on September 11, 2017 in Top 5 Licensing Questions

 

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Details of the Qualified Multitenant Addendum

There’s been a lot of talk as of late about the new QMTH addendum.  I’ve written a couple of articles on the topic here  In this article, we will summarize what is written in the addendum so there’s no surprises.  I listed some (not all) of terms and conditions to ensure you are up to speed on the latest developments.

  • CSP Membership – You (or affiliates) must be a Direct CSP partner.  This means you cannot leverage an Indirect CSP partner for this program.  In other words, if you receive CSP licensing from Ingram Micro or SherWeb (as an example) your partnership with those distributors/partner does not qualify for QMTH.  Your organization must be CSP Direct authorized, not your partner.
  • Must meet the system requirements – System Requirements can be found here
  • Have an active SPLA agreement.
  • Reporting Requirements – You will always need to report underlying licenses in SPLA.  Those underlying licenses could be any software to deploy a VDI solution – (Windows Server and RDS).   In addition, you must report (by the last calendar day of each month) the Windows 10/O365 licenses deployed.  This is manual, meaning you will send an email to the QMTH alias for submission.  Once automated reporting is available, you must enable Microsoft’s automated reporting tool.  Microsoft will use the tool to collect your customer’s organization ID and tenant ID as well as the total number of users accessing the software.
  • As the provider, you must report to your SPLA Reseller the program administrative fee.  If you are currently in the SCA program, you will be familiar with this SKU.
  • As the provider, you must make all education materials publicly available.  You cannot just sign up for CSP, the education material should be like what’s on the QMH website.
  • For each per user subscription to Windows 10 Enterprise, the end-user can only access up to four (4) instances of Windows 10 either on Azure or you, the QMTH hoster.  This is like the SCA program in which the end user has five (5) instances of Office Pro Plus, Windows 10 works the same way.

Listed above is a summary.  I encourage you to reach out to your Microsoft rep for additional information.  I am happy to review it further, it’s a new program with pluses and minuses.  Be sure to understand the minuses first 🙂

Thanks for reading,

SPLA Man

 

 
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Posted by on August 3, 2017 in Office 365

 

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Yikes…how to move from one cloud to the next.

The latest buzz word in this crazy IT world in which we live is not “Cloud” it’s “Hybrid Cloud”.   Even the definition of hybrid cloud has evolved throughout its short existence. Having a mix of on premise workloads and cloud workloads has transformed into having workloads spread throughout different cloud vendors as well.  “Cloud Sprawl” is born and guessing is here to stay.

In this article, we will review how the licensing works to move a customer’s workload from one cloud to another; customer’s owned licenses back to on premise; and customers on premise licenses back to your cloud.  As the title of this article states..Yikes!

Moving away from your cloud to another cloud

So, your sales rep “accidentally” promised the world to your customer that he/she could not deliver.  Unfortunately, they now want to move to another provider.  First thing to do is fire the sales rep.  Second thing to do is read your SPLA agreement.

When you sign a SPLA agreement (or any Microsoft agreement) your license keys are your license keys.   The data is not yours, but the keys are (at least while you have an active agreement – remember, SPLA is non-perpetual license). License keys are not to be transferred, resold, etc. over to another datacenter provider.   Where does it say that?

In section 6C, page 5, of the 2017 SPLA Indirect Agreement “Copying and distribution of Products and Software documentation” states: “customer may distribute original media or software contains products only to outsourcing company and affiliates.”  Another cloud provider is not your affiliate or outsourcing company, they are your competitor.  The section continues: “Customer may distribute original media or software containing client software and/or redistribution software to its end users.”

What that statement is saying is the service provider can provide the image to their client but not to another service provider.  If they do this, Microsoft requires the license keys to be removed first.  Remember, your keys are your keys, not theirs. As mentioned, the data is not yours either.  An end customer has the right to transfer their data from your datacenter to another provider.  You can also transfer the media to your customer, but not to another service provider as the statement suggests.

Over the years, the transfer of data, transferring images, and using outsourcing companies has made it difficult to track which media/keys belong to which company.  My recommendation is to have language in your agreement that is like the one in your SPLA to protect you.  Is this a gray area?  Absolutely.  My other recommendation is that no matter which keys belong to which organization – be sure to license the environment correctly; in the end, that’s the most important part.

Customer’s owned licenses back to on premise 

The same sales rep screwed up again.  They promised the customer that by moving to your cloud environment they would never be audited again.  Guess what?   They got audited.  Now they are upset and want to move back to on premise.  How does the licensing work?

In this situation, let’s assume the customer is moving workloads that have software assurance (SA) and are using license mobility. (even if they didn’t, same rules would apply.  I just like using license mobility because it’s more common).   Whenever an end customer transfers their own licenses (not SPLA) it’s important to read the Product Terms, not just the SPUR.  The Product Terms is for volume licensing, which applies to customer owned licenses.  The SPUR, as we all know is for SPLA.  Two different programs, two different use rights.

Page 84 (good Lord this is a massive document) of the 2017 Product Terms states “Customer (your end customer) may move its licensed software from shared servers (license mobility) back to its Licensed Servers or to another party’s shared servers, but not on a short-term basis (not within 90 days of the last assignment).

When you buy a license through volume licensing (VL), you assign that license to a server.  That’s one of the reasons you cannot mix SPLA and VL on the same server (different use rights).  When you assign that server to a different server farm (another datacenter provider) that server license cannot move within 90 days of assignment.  If your end customer gets upset and demands you transfer their licenses back to their premise, you can pull out this little blurb in the Product Terms.  I would recommend having language in your agreement that states the same.

You might be wondering – “isn’t the benefit of Software Assurance the ability to move workloads freely without worrying about the 90-day rule?”  That’s true and I’m glad you brought that up.  If it’s within the same server farm, workloads can move freely.  Pay attention to page 84 of the Product Terms as well as the definition of a server farm.

One of the best lines in the Product Terms happens to be on the same page (84).  “Customer (again, customer in this example is your end customer) agrees that it will be responsible for third-parties’ actions about software deployed and managed on its behalf” I would definitely include that statement with your customers.

Moving back to your cloud

You gave your sales rep an ultimatum, win the customer back or lose your job!  Your sales rep won the customer back.  Now your customer can move back to your cloud, but make sure you follow the license mobility use rights as mentioned above.  Remember the 90 day rule.  Once a customer assigns a license back to their premise, they have to wait 90 days to move it back.  Secondly, if they do not have SA, you must dedicate the entire infrastructure for your customer.  Dedicated means the hardware used to support the solution.

The moral of this story?  Make sure you have a good sales rep!  Secondly, read the SPUR, Product Terms, SPLALicensing.com, and have language written in your agreement to protect yourself.  Lots of talk about moving to the cloud, moving away from it is just as important.

Thanks for reading,

SPLA Man

 

 

 

 

 
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Posted by on August 3, 2017 in Compliance

 

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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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Why you need a plan B, C, D, and E.

The title seems obvious, if you are an entrepreneur, you should always be thinking about what’s next.  I read/follow Richard Branson, who wrote an article recently on focusing on the future, check it out here.  It’s all about looking forward to what’s next and dreaming big.  Very few organizations are as diversified as Virgin.  In a way, it might be too diversified, but the point is he does not settle for the status quo, if he doesn’t like it, he changes it.  Think of all the different industries under his portfolio: Entertainment, health, financial, technology, travel, and many more.  The company started out in the music industry!

What does this have to do with SPLA licensing?  Over the past week alone, how many different programs and licensing nuances did I write about? (too many to count). Those changes only had to do with Microsoft!  Think of all the other changes going on in the industry including security, data and backup, and development.   If you do not have a plan in place or to adapt change, you might be left in the dust.

In SPLA, way too many organizations report the exact same thing each month.  They even report the same quantities!  They have a few loyal customers in which their hosting business depends on.  My question to them –  What happens if the loyal customer is not so loyal?   If you are hosting, you have everyone and their brother trying to convince your customer to move to their cloud.  If you are a managed service provider, forget about it.  Not only are hosters your competition, everyone in the industry is your competition.  What are you going to do to stand out?

This blog is about licensing, and I like to think there are ways to be creative with your SPLA usage to diversify your business.  Don’t just report the same thing each month and not give it a second thought.  There are always ways to reduce or optimize what you license.  In a way, licensing can help expand your offering.  SAL for SA, as an example, can help build your DR business and lower your SPLA costs.  Check out my article here  Windows Datacenter, allows unlimited VM’s which can help build your IaaS platform.  Azure Stack, can help bring an Azure type offering from your own datacenter.   Qualified Hosting Addendum, will allow you to offer VDI from a shared environment.  My point being, don’t just settle for the same old usage report each month.  Licensing is a big headache even for a guy who spends his free time writing about it, but that doesn’t mean you cannot learn to leverage licensing to your own advantage.  If you understand the licensing, you can start to look at ways to really get creative and expand your offering.   I’ll go back to SAL for SA.  If you did not know about SAL for SA, you would be telling your customers that they cannot leverage their investment in software assurance from both your datacenter and theirs.  You would probably tell them about license mobility which transfers a license over to your datacenter.  That’s a big miss in my opinion.

Learn the licensing, diversify your business, and I promise your loyal customer will remain loyal.

Thanks for reading,

 

SPLA Man

 
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Posted by on July 23, 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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