RSS

Tag Archives: Exchange

How the other guys do it

18 Jun

So you want to get in the hosting business.  You start looking around the web and notice that other service providers seem to charge less than what you can charge your customers.  You notice other’s advertising solutions that seem to conflict with the licensing rights.  You are at a loss.  You ask yourself, “how do they do it?”  You ask your reseller who seems just as confused.  So what do you do?  How do THEY do it?

Since this blog is about licensing, I’ll educate you on how other’s save costs based off licensing alone.  I’ll break this down into three parts – Exchange, Mobility, and VDI.  Those are probably the big 3 and more often than not, can make you scratch your head.   I will also add one more, and that’s your reseller.

Exchange Licensing

Exchange is your best friend and enemy. I say that only because it is so important and one of the reasons organization’s move towards the cloud.  They don’t want to babysit an Exchange server anymore, but it’s a must have.  Licensing aside, to deploy Exchange you must have redundancy (God forbid it goes down) you must have infrastructure (they have to receive email as fast as their eyes can focus) and finally administration (dedicate an employee(s) to make sure the former happens).  That’s pricey.  Now the licensing.

Exchange is licensed by user, which means all users who have access to the software needs a license.  To deploy Exchange, you also need Windows.  Windows is licensed by processor.  So let’s say you have 10 users and you provide those users access to your Exchange server. Exchange cost’s $5 per user (hypothetical).  Windows costs $20 for Standard edition or $100 for Datacenter edition.  Because Windows is licensed only by processor (not user) the more users, the less expensive Windows licenses become. See below. (example purposes only)

Hoster with 10 Exchange users on a two processor box

Exchange: $5 per user

Windows: 2*20= 40.  But if we do a per user cost it would equate to $40 divided by 10 ($4 per user for Windows).

The entire Exchange solution is $9 per user.  ($5 for Exchange + $4 for Windows)

Hoster with 1,000 Exchange users on a two processor box with multiple VM’s

Exchange: $5 per user

Windows: $100 per processor or $200 (using Datacenter, 2 processor box – multiple VM’s).  So $200 divided by 1000 users equals $.20 per user.

The entire Exchange solution is $5.20 per user.

So what do you do?  You either fight the good fight – offer something the bigger guys cannot offer – customer service, deployment services, kiss your server good night, etc. or if you can’t beat them…join them.  A lot of big providers offer partnerships in which they will provide the Windows server (think Amazon/Azure) but you provide the Exchange license via your own SPLA.  This is called Datacenter Outsourcing.  Perfectly legal, and part of your signed SPLA agreement.

Mobility

If you really want to get into Exchange hosting – this is the best way to do it.  (in my opinion).  You should offer license mobility.  For a complete definition of license mobility, check out my previous blog post here.  In short, this allows your customer who purchased Exchange with Software Assurance to transfer that license into your datacenter.  All you need to do is dedicate a VM for that customer but install it on shared hardware.  One caveat – you must report Windows via SPLA.  Windows is relatively inexpensive so it could be a win-win.  Just make sure you sign the mobility addendum to legally offer this solution and check with your reseller for eligibility

I also think you should consider SAL for SA.  This allows you (the service provider) to host the solution in a shared environment (VM and Hardware) using the Exchange license your customer purchased with SA.  You still report Windows and SAL for SA SKU via SPLA.  (way cheap by the way).  Difference between SAL for SA and License Mobility is under license mobility they are transferring the license to your datacenter.  Under SAL for SA, nothing is transferred, the original licenses can still be deployed on premise and in your cloud!  Great hybrid situation or ability to provide disaster recovery.  Reach out to me at blaforge@splalciensing.com to learn more

VDI

“I see they advertise VDI!!!”  You look online and see other providers offering VDI as a service.  Well, they are either out of compliant (more probable) or they are using Windows Server and RDS to emulate a desktop via SPLA.  Last option is to have the end customer bring their desktop OS licenses to a datacenter provider.  This is not likely since desktop OS does NOT have mobility rights.  This means the service provider would need to dedicate (server and vm) to one customer.  This is the least likely scenario, since dedicating an environment just for a desktop license makes little sense.

Moral of the story with VDI- there is NO way a service provider can offer a desktop license in a shared environment.
Conclusion

Do you ever wonder why you report licenses to your current reseller?  Is it just out of convenience or do they provide you strategic value?  My advice -don’t work with a reseller out of convenience.    Do they have their own cloud services that directly competes with you?  Hmmm…

Reach out to me at blaforge@splalicensing.com or linkedin.  Would love to review your options or simply offer a second opinion.

Thanks

SPLA Man

 

 

 

Advertisement
 
2 Comments

Posted by on June 18, 2014 in Disaster Recovery, Exchange, License Mobility

 

Tags: , , , ,

Disaster Recovery Rights for SPLA

30 Apr

Spring.  The time of year in which flowers bloom but storms loom. (I will not quit my day job by the way).  Those reading this article that live in the middle of the United States, you would probably agree with that statement.  Sometimes it may take a storm for organizations to start thinking about their own disaster recovery plans.  Maybe it’s time to get ahead of the storm; that’s why I thought I would spend time reviewing DR, industry best practices, and licensing scenarios.

In previous editions of the SPUR, you were allowed to temporarily run a backup instance on a server dedicated for DR with the following exceptions:  The server must be turned off except for limited testing and DR, may not be in the same cluster, and you may only run the backup instances and production instances at the same time only while recovering from a disaster.

I never understood the rule “the server must be turned off.”  If it’s turned off, how is backing up anything?  Secondly, what is meant by “limited testing?” How much time does it allow you test? Two days…a week…a month?

In the new SPUR, it brings clarity to some of those questions.  From the April SPUR:

“The disaster recovery server can run only during the following exception periods:

  • For brief periods of disaster recovery testing within one week every 90 days
  • During a disaster, while the production server being recovered is down
  • Around the time of a disaster, for a brief period, to assist in the transfer between the primary production server and the disaster recovery server

In order to use the software under disaster recovery rights, you must comply with the following terms:

  • The disaster recovery server must not be running at any other times except as above.
  • The disaster recovery server may not be in the same cluster as the production server.
  • Windows Server licenses are not required for the disaster recovery server if the following conditions are met:
  • The Hyper-V role within Windows Server is used to replicate virtual OSEs from the production server at a primary site to a disaster recovery server.
  • The disaster recovery server may be used only to
  • run hardware virtualization software, such as Hyper-V,
  • provide hardware virtualization services,
  • run software agents to manage the hardware virtualization software,
  • serve as a destination for replication,
  • receive replicated virtual OSEs, test failover, and
  • Await failover of the virtual OSEs.
  • run disaster recovery workloads as described above
  • The disaster recovery server may not be used as a production server.
  • Use of the software on the disaster recovery server should comply with the license terms for the software.
  • Once the disaster recovery process is complete and the production server is recovered, the disaster recovery server must not be running at any other times except those times allowed here.”

If I had a hosting company that specializes in DR solutions, I would have my customers purchase their licenses outright with Software Assurance from their reseller (like SoftwareONE).  I would make sure they deploy it on premise and I would set up a secondary server in my datacenter. Now comes the fun part – how to license the solution!

Let me provide an example.   Let’s say your customer is a law firm and email is extremely important to their business.  They cannot lose email for one minute, let a lone a day.    The customer would like the greatest discount long term but very concerned that if a disaster does happen, they won’t be prepared.  (this is when you come to the rescue).  You have a solution that will allow them to run their Exchange on premise by purchasing Exchange with Software Assurance from volume licensing (greater discount over SPLA long term), and you as the service provider can run Exchange in your datacenter using the SAL for SA SKU.  Never heard of the SAL for SA SKU?  You’re not alone.  This SKU is available for certain applications (Lync, SharePoint, Exchange – check SPUR for availability) and allows the service provider to host the application in a shared (virtual & physical) environment.  More importantly, the cost is extremely attractive AND your customer can still run it on premise.  This is NOT license mobility.  License mobility allows you to run it in a shared hardware but dedicated VM.  It also requires the customer to transfer those licenses out of your datacenter only (not on premise).

Here’s the criteria for reporting SAL for SA for those home gamers.

SALs for SA

“SALs for SA may be acquired and assigned to users who have also been assigned a qualifying Client Access License (“CAL”) with active Software Assurance (“SA”) acquired under a Microsoft Volume Licensing Program or who uses a device to which a qualifying Device CAL with active Software Assurance coverage has been assigned. You may not acquire SALs for SA for more than one user for any given qualifying CAL. Use rights for SALs for SA are identical to their corresponding SALs, as defined in this document. The right to assign a SAL for SA to a user or device expires when the Software Assurance coverage for the qualifying CAL expires.”

Be careful if you decide to go down this route. You have to ensure when reporting SAL for SA that the customer has active SA for the licenses you are reporting.  If they don’t, both you and your customer are out of compliant.  This comes up all the time during audits.  “I swear they own these licenses Mr. Auditor!”  Secondly, make sure the products are SAL for SA eligible when discussing with your client.

In summary, pay attention to the new DR rights mentioned above; consider SAL for SA as an alternative; and last but certainly not least, maybe reconsider your vacation to the Midwest until the Fall – flowers bloom, storms loom.  Hit me up at blaforge@splalicensing.com  if you want to learn more about SAL for SA or anything hosting related.

Thanks for reading,

SPLA Man

 
4 Comments

Posted by on April 30, 2014 in Disaster Recovery

 

Tags: , , , , , , , , , ,

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

 

Tags: , , , , ,

 
%d bloggers like this: