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Tag Archives: Azure

Azure Arc is Replacing SPLA

03 Dec

Good, bad, or indifferent, Microsoft is pushing to replace SPLA. The writing is on the wall; SPLA is D.E.A.D. Then I woke up. My heart was pounding, sweat dripping from my brow, and my wife whispering to tell me everything was OK, it was just a dream. SPLA Man is still alive. But for how much longer?

Thank goodness it was just a dream. But the reality is things are changing. It’s CSP Hoster, it’s Flexible Virtualization, it’s Azure Arc, whatever the topic, change is on the horizon. What’s interesting about SPLA to me is the following:

  1. My anonymous sources tell me it is roughly a 7 BILLION dollar business globally. I know that is how much Microsoft probably spends on toilet paper annually, but for any other company, a 7-billion-dollar business is massive.
  2. Imagine running that 7-billion-dollar business without any overhead. There are very few licensing resources; Microsoft just discontinued their getlicensingready program. The only actual expense in my eyes is paying a 3rd party audit firm to collect revenue. Even in that scenario, there’s a massive return on investment.
  3. Hosters still love SPLA. Why? All the other programs Microsoft introduced has nothing to do with SPLA, but everything to do with end-customers. In SPLA, hosters control the end-end customer experience. In CSP, one hoster mentioned “We are just another reseller.”
  4. Microsoft continues to raise pricing but it has little impact on hosters. Hosters do not price solutions based on the cost of an individual license, but on the overall solution.
  5. Compliance risk has always been an issue, but it is present no matter what you do. Even in Azure Arc, there’s no license verification; you simply check a box. Does your Azure admin understand the licensing impact?

I don’t know if I just provided a case for SPLA, but it doesn’t appear it is going away anytime soon. You must understand your different licensing options and use cases, know your risk before it becomes a risk, and, lastly, if you want to move to Azure, go for it. But I recommend understanding what is going on in your own data center before moving to someone else’s.

Have a question or worried about your next audit? email info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on December 3, 2024 in Uncategorized

 

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CISPE and Microsoft Settlement – Good or Bad?

24 Jul

You might have heard that the Cloud Infrastructure Services Providers in Europe (CISPE), which has 27 members, filed a complaint against Microsoft in November 2022. If you recall, its complaint concerns the unfair advantage of running Microsoft workloads in public clouds that are not in Microsoft Azure.

Microsoft “settled” (use of quotation marks because they have nine months to adhere to their commitment) that will allow a more enhanced version of Azure Stack HCI for European hosters. What’s interesting to me is Azure Stack HCI forces customers to run Hyper V. Does this enhanced version allow those hosters (almost every hoster I work with) who deployed VMWare the opportunity to partake in this offer? Does it lower licensing costs? What about the USA? We’re a mess already. Can we at least get this Azure Stack HCI?

I am not sure this settlement matters as much. I spoke to one hoster who asked about Listed Providers (Google, AWS, Alibaba). What options will Microsoft provide to them? We kind of laughed at the question because we knew the answer—not much.

Here’s my take on this for what it’s worth. For the past 24 months, Microsoft has been promoting Azure to hosters, whether it’s Azure Stack to monitor everything from one panel to CSP Hoster or Flexible Virtualization. Although there are many different programs and options for hosters and end customers to participate in, licensing is increasingly becoming more difficult. Regardless of the settlement, my recommendation for hosters is to get your own house in order before considering whatever Microsoft and the European courts decide. Here’s a small list of things to consider:

  1. How do you know what is installed? (the process to report or purchase licensing each month)
  2. Are you aware that different programs have different use rights? Flexible Virtualization requires CALs, but CSP Hoster does not.
  3. Flexible Virtualization requires ACTIVE Software Assurance. How do you track end-customer licensing?
  4. What kind of language is in your agreement with your customers around software audits?
  5. How do you know which cloud provider is the most economical?
  6. An end customer can have a CSP agreement, EA Agreement, SPLA through the Hoster, Open Value, and PAYG (Pay as you go) through publishers directly. How are you tracking this?

Need help or have a licensing question? Email me at info@splalicensing.com. Don’t wait for things to happen; make them happen. Do it. If you license 100 or 5 million dollars a month, don’t you want to ensure it is right?

Thanks for reading,

SPLA Man

 
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Posted by on July 24, 2024 in Uncategorized

 

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Licensing Microsoft Workloads in AWS

29 Sep

If you have followed me for some time, you may know that I always like to refer to the AWS model as an example for hosters in handling licensing and educating customers. AWS has a SPLA, they have end customers, they report usage, and they have to manage Microsoft licenses.   Sound familiar? 

AWS has more complexities than the average hoster because they are a Listed Provider. There’s no Flexible Virtualization or CSP-Hoster option; they are also restricted by the Hyperscaler definition in the SPLA Agreement, limiting certain use rights for specific products. So how do they win?

If you take one thing away from this article, please educate your end customers on licensing. AWS does a phenomenal job at that as compared to Microsoft. They have very informative licensing videos and a dedicated webpage specifically for Microsoft licensing inquiries. You can check it out here. I would do the same for your organization. Need help? You can email info@splalicensing.com

What are the licensing rules for running Microsoft workloads using AWS? Glad you asked. As mentioned, AWS is a Listed Provider, which means they have restrictions on workloads end customers can bring into their datacenters. For example, they cannot host a Windows 10 Operating System from their datacenter in shared environments because they are not authorized outsourcers. Let’s review some licensing challenges and options for end customers using AWS.

October 2019 Microsoft Licensing Changes

Changes were announced on October 1, 2019, that prohibited software without License Mobility to be installed in a Listed Providers datacenter regardless of whether it is dedicated (single-tenant) or shared. A good example of this is Windows Server. If you purchased Windows Server after 10/1/2019, you can no longer bring that Windows license to AWS. You can still install it on dedicated infrastructure if you purchased it before 10/1/2019 and the version was publicly available. Once you upgrade, you can no longer leverage your existing Windows licenses.   As a regular hoster (non Listed Provider), you can still run workloads in dedicated environments without issue. 

It seems unfair, especially since Azure has Hybrid-Use-Benefits.  One way AWS solves this issue for customers who want to upgrade or maybe purchase the Windows license after 10/1/2019 is to offer the “License Included” option. The end customer will lease (through SPLA) the Windows Server license. In many cases, end customers no longer want to mess with the licenses; they can purchase them from AWS and move on.

No Flexible Virtualization Benefit 

Microsoft does allow AWS customers to bring their M365 apps for Enterprise (workspace only) to their environment. They also can provide Windows desktops on dedicated infrastructure only, but with restrictions, they have to pay for the VDA license (M365 VDA E3 or E5). That is an increased cost for end users to use AWS versus an authorized outsourcer. However, they offer Windows Server + RDS to emulate a desktop and offer it as a service. This is a less expensive option, and end users would not know the difference. Using Windows Server + RDS + M365 apps for Enterprise makes a good bundled solution. As a hoster, you can offer the same thing.

End of Security Updates

I get asked a lot about this in the community.   Windows Server 2012/2012R2 support will end on October 10, 2023. That’s a big deal. What is ESU? This means Microsoft no longer offers patch security updates for products that reached their expiration (Windows 2012 – October 10 and SQL 2012 – July 12). Customers can bring their licenses (with SA) that are ESU eligible to AWS. Quick note: SPLA licenses are eligible. You purchase the ESU SKU from CSP or Microsoft directly.

What does AWS think of the new licensing rules? Flexible Virtualization/CSP Hoster/Listed Provider?

Are they happy? No. But one of AWS’s big advantages is they are not Microsoft. The cloud space is minimal right now. It seems odd to say that, but there are a lot of on-premise workloads not in the cloud. There’s an opportunity for everyone, including you (SPLA provider).   One thing that is consistent with Microsoft is change. No matter what Microsoft does, how will you help win customers and keep the ones you already have? I think AWS does a great job at both. With all the new changes, I believe, brings opportunities. Help your customers understand the licensing rules, and you will win.

Thanks for reading,

SPLA Man

 
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Posted by on September 29, 2023 in Outsourcing Scenarios

 

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SPLA Paused!

28 Sep
SPLA Paused!

In certain markets, Ukraine, Turkey, Iraq, Brazil, India, Poland, and a handful of others SPLA is paused. What does “pause” mean and what impact does this have if I am a hoster in the US or UK?

Well, kind of like an audit. take a breath. SPLA is not dead. In fact, globally, SPLA continues to grow. This pause is for net new hosters who want to sign up in the program. If you are an existing hoster, there’s no impact. You can continue to use SPLA and even renew SPLA with updated terms. I think the bigger question is SPLA moving forward, and what changes do I see happening. To answer that question, let me share an example.

This morning I had the pleasure of speaking to a large hoster in Europe. We discussed SPLA and his thoughts on CSP. He’s an infrastructure provider, mainly hosting Windows, RDS, and a little SQL. Most customers bring licenses into their datacenter. He’s not interested in using Azure or AWS, he wants to host out of his datacenter, and uses it to differentiate amongst the larger providers. End customers bring licenses into their datacenter and they host it.

Wow SPLA Man, that’s a turn pager of a story. Tell me more!! Sure. I think this hoster is what SPLA is about. No one is a SaaS provider using SPLA. Hosters don’t provide Office as a service through the SPLA program. They provide Windows Server (it’s cheap) and they provide SQL (it’s expensive). What he likes about SPLA is the flexibility. He controls the customer end-to-end. Unlike CSP hoster, Microsoft does not know who the end customer is in SPLA. That’s where I see SPLA changing. In fact, with this latest announcement, they state “change is the first in a series of changes evolving the SPLA program. Future changes, including new SPLA agreement templates and a new process of reporting and submitting END CUSTOMER USER DATA for compliance verification are also planned”

End customer data has and always will be the problem with SPLA for Microsoft. They want to control the end customer and know why and how they are purchasing their software. Other than that, SPLA is a huge benefit to Microsoft. Differentiates Microsoft from AWS and the like.

If you are an infrastructure provider (like in the story above) what should you do now? I will keep saying it, start with education. Arm yourself with the best licensing practice around. This licensing environment in which we live is changing rapidly. Second, I would communicate these changes to your customer and how they may impact the way they purchase Microsoft products. All the changes that happened over the last few years, has zero impact to SPLA. It is all about the end customer. Last, I would start developing a SAM practice internally. You need to clean up your own mess before you do anything else. You should look into using OctopusCloud

More to come on this. I am also doing an interview with AWS and Microsoft. Stay tuned for more.

Thanks for reading,

SPLA Man

 
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Posted by on September 28, 2023 in Uncategorized

 

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Is Azure Arc the gateway to ending SPLA?

21 Sep

I had a dream the other night, SPLA was going away. I woke up in horror. My wife thought something dramatic happened, and in a way, it did. In my dream there were pricing discounts, incentives, metered pricing, and security updates for hosters, not one benefit was part of the SPLA program. When I woke up, I was thankful it was just a dream until I Binged (man I can’t say that) Googled around and found Azure Arc. Is SPLA gone? No. But maybe there’s opportunities hosters should consider. In this article, let’s dive into the licensing side of Azure Arc and how it may benefit SPLA providers.

I like to think of Azure Arc as a bridge between your infrastructure and Azure. Maybe it’s the “arc” in the title or I just plagiarized it from the Microsoft website. https://azure.microsoft.com/en-us/products/azure-arc#overview either way, there’s a connection because it manages IT resources in your cloud, Joe’s Hosting Cloud, or another third-party using the same tools you would use to manage Azure hosted resources. So let’s take a look at how a SPLA partner might use this technology ,where does the licensing come into play, and the benefits.

I think we can all agree SQL is one of the most expensive products at Microsoft and managing SQL Server can be just as expensive. Azure Arc allows a hoster to manage all SQL Servers deployed in the hosters datacenter from, you guessed it, Azure. A hoster is still “hosting” SQL Server but using Azure resources to manage it. From the Azure portal, a hoster can query deployment information, get detailed information on the number of cores, or maybe they want to know which editions are running and where.

Ok, we get the management piece of it. But managing doesn’t replace SPLA. That statement is correct. When Azure Arc is enabled, customers, hosters, whoever has the ability to purchase SQL using a pay as you go model through Microsoft directly or CSP such as the CSP Hoster program. Yes, pay as you go model is SPLA, but one benefit over SPLA is pay as you use. In other words, if you are looking to save costs on SQL Server for development projects or maybe there’s times in high demand and times of low demand, hosters might benefit. With SPLA, if you spin up a server on the 28th of the month, you have to report that license as if you deployed it on the 1st of the month. You also receive incentives, rebates, and the deployment of Azure Arc goes towards your Azure revenue credit. One other side note, is end of security updates are also included as an add on which is not available in SPLA. (Your end customers can purchase ESU and deploy it in a SPLA providers datacenter though).

Ok, but the biggest benefits of SPLA is unlimited virtualization rights. And that is a BIG benefit. You can’t license SQL Enterprise on the host level and deploy SQL Standard virtual machines using CSP licenses. I also think Windows Datacenter in SPLA is very profitable for service providers. In addition, just because the virtual machine is installed locally when using Azure Arc, data/information is relayed back to Azure. There could be compliance/security concerns. You don’t have that issue with SPLA.

SPLA has it’s place and so does CSP. Can’t we all just get along? Either way, Microsoft still gets paid.

Thanks for reading,

SPLA Man

 
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Posted by on September 21, 2023 in Uncategorized

 

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Is License Mobility Dead?

20 Sep

Note – When we discuss License Mobility, we mean leveraging end customer licensing in shared environments.

With the new Flexible Virtualization Benefit, what is the reason for License Mobility? Great question. There is no need for License Mobility. However, if you use a Listed Provider (Google, AWS, Alibaba, and kind of Azure), you must use the License Mobility form. If you are a non-listed provider or an authorized outsourcer) you can use the Flexible Virtualization Benefit. There is no form to complete, no authorization. 

What about compliance? Contrary to what Microsoft or maybe a consultant will tell you, if you are hosting anything, you need to track it. In an audit, you have to prove the way you are licensing. If you are not reporting the product in SPLA, how are you reselling it? If you say, “Hey, it’s my customer’s license,”  they will ask you to prove it. I also think this is a huge opportunity to educate your customers. Imagine getting audited. Auditors ask you to verify the licenses, and you go back to your customers and tell them they are out of compliance. What is your customer going to do? That’s right. They are going to Joe’s Hosting down the street, can careless about compliance, and report only ten dollars a month to stay “under the radar.”  On the other hand, if you educate your customers and look at different ways to reduce their licensing spend, Joe’s Hosting will be out of business. Take care of your customers; they will take care of you.

Thanks for reading,

SPLA Man

 
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Posted by on September 20, 2023 in Uncategorized

 

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SPLA Audits: Survival Guide

19 Sep
SPLA Audits: Survival Guide

Here’s an example of an unsuccessful audit and what this Company could have done differently. True story. Don’t waste a failure. 

Customer A

Background

The Company reports roughly 75,000 USD a month in SPLA revenue. At one point, it was almost double that amount, but over the years, they moved workloads away from SPLA and into Azure. Although their SPLA has decreased, their CSP spend has increased significantly.

Five years ago, Company A went through an audit. They owed a small amount of money but were not nearly as large as now. Most of their growth has come by the way of acquisitions. Last year, Company A received another audit notification.   They were not as worried about the audit because they expected the same outcome as the previous one. 

The Process

The CEO received an audit notification specifying the audit process. A kick-off meeting would outline the requirements and what information they (auditors) would need to complete the project. This was conducted by a third-party audit firm, not Microsoft directly. Once the kick-off meeting was completed, they would move on to the data collection phase. They ran a scan of their entire infrastructure using the MAP tool and produced a raw data report. Once received, the auditors will compare Company A’s past usage reports and what was discovered during the audit. Whatever the delta is, ultimately, is what they would owe. 

The Outcome

This process was completely different than the original audit several years ago. Company A worked directly with Microsoft, not an audit firm. It was easier and completed on time. This new audit took a long time to complete. More assets (Servers/VMs) to uncover resulted in a longer time to perform the analysis. The longer it dragged out, the more uncomfortable senior management became. The Board wanted to move past this audit quickly to budget for the upcoming fiscal year. The auditors obliged; they didn’t want to spend too much time on the audit either. So, the auditors delivered a settlement letter with the total amount owed. The CEO was shocked. They initially thought they might owe about a month’s worth of licensing, but they owe well into seven figures. Completely unbudgeted, heads were going to roll. They pleaded with Microsoft, but the only option was to inquire about financing. Company A settled at the direction of their Board. Audit complete.

What did Company A do right?

They were responsive to the auditor’s request. I think this is a good thing. You shouldn’t ignore them, and your response is always appreciated.

What did Company A do wrong?

Everything outside of being responsive. Here’s what they should have done differently.

They have worked on their timeline, not the auditors. Company A should have taken a deep breath to respond but not rushed into something they were unprepared for. They knew their licensing wasn’t 100% accurate. They should have performed their risk assessment to understand their exposure.

Hired a consultant such as SPLA Man. You need to interpret and translate the data into a SPLA licensing report. This is also a great way to identify software you may have installed but never turned off or removed access. It’s good to get this information before the kick-off call.

They barely negotiated. The best Company A came up with is financing. When you negotiate with a major publisher, they must keep the conversation sales-oriented. When you don’t, it becomes very black and white. The product terms are the product terms, and you can’t change them. But leverage what you do have. In this example, Company A has a lot of CSP spend, leverage that. They also moved workloads to Azure. Guess what’s a top priority at Microsoft? Yes, Azure. 

They need a go-forward strategy. Maybe find a tool such as Octopus. Cloud to help manage installations more efficiently. Find your risk before it becomes a risk.

The key thing to remember is not only did Company A have to spend seven figures on an audit, but it also tells me they are not charging their customers accurately either. That’s the more significant issue, in my opinion.

So there you have it. What am I missing? Have a question? Going through an audit? Email info@splaicensing.com, and we can help.

Thanks for reading,

SPLA Man

 
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Posted by on September 19, 2023 in Uncategorized

 

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Can I use CSP for Windows Server and not SPLA?

30 Jul

No.  How about that for a short answer?

We have been asked multiple times on this topic. It is not impossible, but not really viable either. Let me explain.

If you are CSP Direct authorized (or CSP Reseller), you could resell your end customer Windows and/or SQL Server subscriptions through CSP and host it in a dedicated infrastructure. I do not think it is really worth the time and effort just to host Windows and SQL. The cost in licensing is not that substantial from SPLA. If Microsoft allowed a service provider to host it on shared infrastructure than that would be a different story. You cannot purchase Windows through CSP and host it. Remember, Server Subscriptions for on premise deployments follow the Product Terms, which of course prohibits hosting.
If you are an ISV and want to host your application from your own datacenter, I would consider CSP Servers. Under the current Product Terms, Microsoft will allow Self-Hosted rights. I think this reduces your compliance risk since SPLA is tricky to license to begin with.

Isn’t licensing fun? We provide consulting services around these offerings. If you have questions, feel free to email us at info@splalicensing.com

Thanks for reading.

SPLA Man

 
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Posted by on July 30, 2020 in Cloud Solution Provider Program, Self Hosted, Uncategorized

 

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What are your top 5 reasons for continuing with SPLA over CSP

23 Jul

Let us know!  Email info@splalicensing.com We are conducting a study to understand the hosting world better.

Here’s my top 5

  1. Cost.  Yes I can buy a Windows Server Subscription through CSP and save consumption costs by deploying through Azure, but my datacenter costs are consistent and can offer a fixed price point to my customers.
  2. Confusing.  I thought SPLA was confusing, CSP is just a complex.  Want CSP Windows Server on prem?  You cannot host if you do!  Want CSP Incentives?  You are better off reading the SPUR, it’s an easier read!  Want the new CSP perpetual license?  That’s fine, but don’t plan on hosting or having your customer transfer that license into your datacenter.  No Software Assurance equals no License Mobility
  3. Dedicated Infrastructure.  With Listed Provider rules, I can offer dedicated hosts and compete with larger hosting companies.
  4. Local Support.  My customers want their data local and with someone they know.
  5. You can do both.  We can offer E3 plans or Windows 10 to my end users through CSP, but use SPLA for infrastructure solutions  for my financial customer or ISV solutions.

What do you think?  Bad list?  Good list?  Anything additional?

Stay tuned for reasons to do CSP over SPLA in my next post.  Here’s a hint…compliance.

Thanks for reading,

SPLA Man.

 
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Posted by on July 23, 2020 in Cloud Solution Provider Program, Uncategorized

 

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Licensing Options to Meet the ESU (End Security Update) Deadline.

19 Nov

Holidays are right around the corner, chill in the air, and a looming end of security update for Windows 7 and Windows 2008 is right around the corner.  What is a MSP going to do?  Luckily for you, there’s SPLA Man, or MSP Man, or CSP Man (whatever acronym Microsoft calls me these days), any of which can provide you options.  In this article, we’ll review these options and how each one can fit into your business.

Windows Server 2008

If you are hosting software under SPLA, the good news is you already have access to the latest version as part of your agreement.   If you are not licensing SPLA and want to provide Windows Servers to your clients, you have a couple options:

  1. Under the Cloud Solution Provider Program (CSP) you can license Windows Servers through your indirect provider or through your own authorization.  This will allow you access to the latest version, pay annually for the subscription, and allow you to install the software on your customers datacenter or in Azure.  You will not be allowed to host Windows Server subscription licenses in CSP and host it from your datacenter.  Whenever you install CSP Server Subscriptions on premise, it follows the Product Terms (which prohibits hosting).  This also means you must buy CALs if installed on premise as well.  CALs are available through CSP or through the end customers volume licensing agreement.
  2.  You can have your end customers buy the new version of Windows Server licenses through their own volume licensing agreement.  Under this model, you (as a service provider) would need to isolate the hardware for that customer (dedicated hardware).  CALs would also be required.  You cannot have the end customer buy the licenses and host it in AWS or other “Listed Provider” as mentioned in the Product Terms.  Microsoft prohibits anything outside of license mobility to be installed on shared servers from a Listed Provider.
  3. You can have the end customer buy ESU through their own volume licensing agreement (I believe only the Enterprise Agreement qualifies).  This is a fairly expensive option.

Windows 7

Many organizations must upgrade their PCs and end devices running Windows 7 to a newer version.  Here are the 3 options available.

  1. Windows 10 through CSP.  You receive the latest version rights which will allow the end customer to upgrade from Windows 7 to Windows 10.  Couple things to keep in mind: 1) Windows 7 Pro can upgrade to Windows 10 Pro included with the subscription.  2) Windows 7 Home can upgrade to Windows 10 Home (Home only).  CSP is a channel program that allows a service provider to buy licenses from an authorized CSP provider and resell it to their end users.  (Same process as SPLA in essence).
  2. Buy ESU.  Similar to servers, ESU is available through the Enterprise Agreement.  (Should be avaialble through CSP in December).  This is only a viable option if the end customer does not have plans to upgrade to a newer version.
  3. Buy Windows 10 through a Volume Licensing agreement.  There is a rental addendum through VL that allows an organization to rent PCs to end users.  More details can be found here

The good news is there are options.  The bad news is time is running out.  If you have any questions, please let us know info@splalicensing.com

Thanks for reading,

SPLA Man

 

 
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Posted by on November 19, 2019 in DaaS, Uncategorized

 

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