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
Tags: Amazon, Amazon Web Services, AWS, Azure, Cloud Solution Provider Program, Dynamics 365, google cloud, Hosting, LinkedIN, Microsoft 365, Microsoft Azure, microsoft CSP, Microsoft Earnings, Microsoft SPLA, Microsoft Surface, Office 365, Qualified Multi-tenant addendum, spla, SPLA Audit, SPLA VDI
Quick update for those interested in Dynamics 365 for SPLA and what you should remember when selling to your customers.
- No Enterprise Plans in SPLA
- No PowerApps in SPLA
- Transitions SKU’s are available in SPLA
- More differences found here
Not all bad news but not all good either. You can read more about my opinion here
Thanks for reading,
SPLA Man
Tags: Azure, Cloud Solution Program, Dynamics, Dynamics 365, Dynamics CRM, Hosting, Microsoft, Microsoft Cloud, microsoft CSP, Microsoft Hosting, MicrosoftSPLA, MS Cloud, O365 Enterprise Plans, Powerapps, SaaS, spla, SPLAlicensing
For Dynamics hosters worried about all the changes with CRM have until October 31, 2019 to license the transition SKU’s in SPLA.
Although good news and provides some flexibility, the transition pricing is still higher than current CRM licenses. As an example, Basic CRM SKU transition pricing for Customer Service is almost double!
Transition pricing is available to ease transition to the new Dynamics 365 pricing model. It is also designed for current CRM customers, not new customers. To learn more about Dynamics 365, please check out Dynamics 365 Licensing for SPLA
Thanks for reading,
SPLA Man
PS- Dont forget to license SQL and Windows with CRM!
Tags: CRM, CRM transition pricing, Dynamics 365, Dynamics CRM, Hosting, Microsoft Cloud, Microsoft SPLA, Office 365, spla, SPLA Pricing, SQL Server, Windows Server
Tags: Adobe, Amazon, Azure, Caltech, Channele2e, Cisco, Computer World, CRM, Dynamics 365, Dynamics 365 Tech Conference, Dynamics CRM, ERP, Hosting, Ipipeline, Office 365, Omnivue, SaaSplaza, Tamarac, technology, The Register, Tribridge, WatServ, XRM
If you were THE Microsoft SPLA MGR in charge of the entire program, what would you change to help grow the SPLA business? (more importantly, YOUR SPLA business) If you have multiple that’s ok.
Here’s a list from a colleague to get you started:
- Allow Windows Desktop OS to be included in the unlimited virtualization rights of Windows Server DC
- Allow MSDN to have License Mobility Rights.
- Remove the SharePoint Enterprise SALs additive requirement. Just make Enterprise more expensive.
- Create cores for Excel and Access for ISV’s.
- Expand the Productivity Suite and have O365 equivalents to align with O365 pricing.
- Bring back SQL Enterprise SALs.
- Add Power BI as a product
- Reduce Office SPLA pricing!
- Have the resellers require an End Customer Enrollment for deploying customer owned hardware, and open it up to include Windows PC’s.
- Bring better clarity to RDS licensing.
- Create a better way for Microsoft field reps to get credit for SPLA consumption.
You can tweet me at @SPLA_man or send me an email info@splalicensing.com
Thanks for reading,
SPLA Man
Tags: Hosting, License Mobility, Microsoft SPLA, Mobility, MSDN, SharePoint, spla licensing, SPLA Resellers, SPLA Updates, SQL Enterprise, windows datacenter
The healthcare community has increased concerns with the way they have deployed (and licensed) their electronic medical record (EMR) software such as Epic Community Connect and others. As a reader of this blog, you know that when you deploy software for the benefit of a third party (non employee) SPLA must be part of the conversation. The only exception to this rule is if you actually own the code to the software you are hosting. In other words, if you developed the software, you can use your own volume licenses to host your software. If you host a third party software (such as Epic) you must license this in SPLA. In most cases, many healthcare companies do not own the application, but lease it from the EMR vendor.
Rewind a few years and let’s pretend you are a large hospital who partnered with Epic to provide best in class patient record management for your clients, doctors, and other clinics. Your Epic deployment resides on a Windows Server, SQL Server, and RDS. As the IT director, you purchased several server licenses and hundreds of Client Access Licenses (CAL) to cover all the external users. You think you are covered; no one mentions you need to license this via SPLA. Your reseller didn’t tell you, Microsoft didn’t tell you, and for that matter the vendor didn’t tell you. You think all is well based off the information you received. Fast forward 3 years and your volume licensing agreement is up for renewal. Someone on the licensing side informs you that you shouldn’t true-up licenses or renew your agreement under volume licensing, you need to license SPLA. You think that’s fine, if you must license under a different program who are you to argue. But what about all those license you already purchased and own? Unfortunately, you cannot return them, you must allocate those internally. You think to yourself that’s fine, except for one minor detail…. you purchased hundreds of CALs and you do not have hundreds of employees; those license you own are essentially worthless. On top of everything else, you just received an audit notification.
Why would they receive an audit notification? Once a vendor recognizes you have been under-licensed, the vendor might want to dig in deeper to see how long you have been out of compliant and if you purchased enough licenses to cover all the users. In 90% of all audits, the customer is under-licensed. Now you own licenses you don’t need, but should’ve purchased more because you don’t own enough licenses to cover all external users initially. The vendor will want you to pay the delta of what you should’ve paid under SPLA and what you purchased under volume licensing (plus an audit fee).
If you are a healthcare provider and have been notified by Microsoft or any other vendor, please contact us. We have found that in many cases the licenses report is not always 100% accurate.
Thanks for reading,
SPLA Man
Tags: 3rd party software, Client Access Licenses, Datacenter outsourcing, EMR Hosting, Epic Community Connect, Epic Software, Hosting, Microsoft, Microsoft Audit, Microsoft Azure, Microsoft Cloud, Microsoft Compliance, Microsoft SPLA, Office 365, self Hosted, spla, SQL Server
Microsoft made a pretty big announcement around Windows 10 and CSP. Here’s a breakdown for those that are interested:
- Software Assurance is not included
- Windows 10 is available E3 and in CSP only
- Customers need a qualified OS license. In other words, this is an upgrade license only.
- Not available under SPLA
- Not available in the shared computer activation model.
- Per user licensing with the ability to license on up to 5 devices per license.
- No minimum and surprise…no maximum either.
- Subscription is 1 year
- Pricing varies
- New use rights highlighted in the Product Terms
So why does this stink now but could be great later? Pay attention to number 1, 4, and 5 in the list above. That’s what stinks. Think this will allow VDI? Think again.
So why not? Why the mystery around VDI and SPLA? If I was Microsoft, I would go ahead and allow it but for only a select few SPLA providers. Those providers are:
- Report on time. Not one late payment/report during their agreement no matter what the excuse – “My reseller sucks” is not an excuse. It’s a good reason to work with me though 🙂
- Deployed Hyper V (they must have some incentive to do this)
- Joined CSP program.
There you have it. Microsoft wins big time – all that missed revenue from non reporters will get reported. Now you, the compliant service provider, will be allowed VDI in SPLA.
The likelihood of this happening is slim to none. I do think Microsoft is missing out with the Windows 10/VDI restriction. Ever since I started in SPLA, I’ve been asked about VDI (or the lack thereof). That was 11 years ago.
Thanks for reading,
SPLA Man
Tags: Cloud Solution Program, CSP, E3, Hosting, hyper-V, Microsoft Cloud, microsoft CSP, Microsoft Software Assurance, Microsoft SPLA, Office 365, Product Terms, RDS, Service Provider, Service Provider Licensing Agreement, Software Assurance, spla, SPLA Reporting, SPUR, VDI, Virtual Desktop Infrastructure, Windows 10, Windows Licensing
Yes, it’s the talk of the town. “Windows 2016! Oh my! It’s moving to cores!!!” That part is true. What is NOT true is even when Windows 2016 is released, it doesn’t mean you have to license by core – you can still license by processor for all 2012 and earlier editions. The catch? Once your agreement expires and you sign a new SPLA after October 1st (when Windows 2016 is released) you must license by core regardless which version you are running.
So what does this mean to you? If I was a service provider that reports over 2k in Windows and SQL licenses, I might readjust when my SPLA expires to extend processor based licensing. Wait…What? You can readjust when my SPLA agreement expires? Sure. I’m SPLA Man. Anything is possible with SPLA Man.
Thanks for reading,
Windows 2016 Man
Need SPLA audit help?
Facing an audit, a license review, or a tricky reporting question? I offer independent SPLA consulting and audit support for service providers and hosters. Email info@splalicensing.com with a short summary of your situation.
Independent consultant; not affiliated with Microsoft.
Tags: Hosting, Microsoft, Microsoft Cloud, Microsoft SQL, Processor Licensing, Service Provider User Rights, spla, SPUR, SQL Server, technology, WIndows, Windows 2016, Windows Core Licensing, Windows Server
There’s a rumor that Microsoft will allow a service provider the ability to host Office licenses under Office 365 in a shared cloud environment. Is the rumor true? Yes, it’s true. But with everything in the world of licensing there’s always a catch.
For those that have read my blog for a while know that this blog is not a news source, but an education source. I don’t care about late breaking news, I just want you to get the licensing right, the information right, and be profitable.
So what does Office under Office 365 really mean? Some time ago, Microsoft created a use right titled “Shared Computer Activation” For those playing at home this is code for installing end user Office license from O365 in a shared cloud infrastructure similar to license mobility. In the past, this was only available in Azure. (imagine that). Fast forward to today and Microsoft is opening it up to the service provider channel as well. Good news for you, and even better news for Microsoft. If you would like to use this use right (SCA) you must meet the following criteria:
- You must be authorized for Cloud Solution Provider Program (CSP Tier 1). Thats why it’s good news for Microsoft.
- You must be managed by a Microsoft hosting team member.
- You must be an authorized SCA partner. (Licensing Addendum)
If you don’t know if you are managed, let me know – I can see if you are. Typically this is for SPLA partners that report not only high SPLA revenue (although not necessarily), but are also strategic in marketing activities with Microsoft. If you are international, let me know and we can look into getting US authorized as well. You can email me at info@splalicensing.com to learn more. I also have a cool powerpoint. (well, about as cool as powerpoint’s can go). Although a bit out dated, here is a good overview as well on SCA: https://technet.microsoft.com/library/dn782860(v=office.15).aspx
Last, I sit on a licensing panel and would love to review the different use cases for this program. Let me know how you may/may not benefit from Shared Computer Activation and we can voice our collective opinion to Microsoft. info@splalicensing.com
There’s also a big change for rental PC’s. Little teaser for an upcoming blog post.
Thanks for reading,
SPLA Man
Tags: Cloud, CSP Direct, CSP Indirect, CSP Tier 1, Hosting, Microsoft addendum, Microsoft Cloud, microsoft CSP, Microsoft Hosting, Microsoft SPLA, Office 365, Office 365 E3, RDS, SCA, shared computer activation
