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Testing Environments for Hosting Providers

In this article, we will discuss the licensing rules for service providers who would like to provide testing/development environments for their customers.  We will break down MSDN, SQL Developer edition, and the terms and conditions found in your signed SPLA agreement.  We will also provide a sneak peek into how AWS does it to stay to compliant.

MSDN Licensing for Hosting

A common question from hosting providers is “Can I host MSDN?  The short answer is “probably not in the way you want to provide MSDN” that sounds a bit harsh, but the reality is MSDN is a customer owned subscription licenses (I guess at the end of the day, it’s a subscription – no one owns anything, but you get my point).  If your customer wants to transfer their MSDN licenses into your datacenter, you must inform them that you must isolate (dedicate) the hardware for that customer only.  Under no circumstance, can you host MSDN in a shared datacenter environment, MSDN is not license mobility eligible.

What you can do is license the components of MSDN (Visual Studio) through SPLA, and yes, that can be shared since it’s a SPLA license, not MSDN.  All other components (Windows/SQL) would also have to be licensed via SPLA since it’s shared.

What about Azure?  Azure is the only exception to this rule.  Azure does allow MSDN licenses to be transferred over to their shared datacenter environment.

To summarize MSDN: No, you cannot host an end customers MSDN license from your shared environment.  Yes, you can in Azure.  Yes, you can license the components of MSDN in SPLA.  Don’t shoot the messenger!

SQL Developer Edition

SQL Developer edition is not part of the SPLA program.  The only SQL editions in SPLA are Web, Standard, and Enterprise.  Since SQL Developer is not included in SPLA and is not license mobility eligible, it cannot be installed in shared cloud environments (Like MSDN – which SQL Developer is included).

We get asked if it’s possible to report SQL Standard in development.  Yes, you can use SQL Standard for testing since it’s included in SPLA, but that does not have the same functionality as SQL Developer edition.  If you want similar functionality, you would have to license SQL Enterprise.  Please see the supported features here to learn more.

Evaluation/Testing Language in SPLA

As part of your signed SPLA agreement, you can test products for an evaluation period of 90 days.  After 90 days, you must remove it or report it under SPLA. There is often confusion as to what Microsoft means by evaluation and testing.

Evaluation/testing and development are two different things.  Testing/Evaluation is to ensure the solution works for your customers to perform internally before delivering on behalf of your customers.  It could mean testing, maintenance, and administrative tasks to the server.   Development is building or creating the solution.

How does Amazon license MSDN?

I wrote a white paper on this topic, but in short, AWS must play by the same rules that you do as a service provider.  If you want to use your MSDN licenses in AWS, you must purchase a dedicated instance from AWS.  I would check out their FAQ guide to learn more.

Thanks for reading,

SPLA Man

 

 

 

 

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Posted by on November 21, 2017 in Testing and Development

 

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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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How to Report SPLA Usage to be Compliant

The biggest benefit to SPLA is the month-month licensing rules.   The biggest downfall to SPLA (and CSP for that matter)  is its month-month licensing rules.  What’s a benefit to some is a nightmare for others.  In this article, we will review the tips and tricks to properly report Microsoft SPLA usage on a monthly basis and break it down using a fictitious scenario using my friend Joe Hosting.

Scenario  – The under licensing but also over paying SPLA reporter.

Joe’s Hosting  reports to his Reseller SharePoint Standard, Exchange Standard, Windows Standard, and SQL Standard every month.  They installed Exchange Enterprise and Windows Standard.    For simplicity, let’s say he has 8 VM’s on a host, and licenses SQL per instance on a VM, they also have 100 mailboxes he supports.

The Problem

Each month Joe had (key word) his employee Julie place their SPLA order each month to the Reseller.  One day, Joe accidentally backed his Porsche 911 into Julie’s car.  Furious, Joe yelled at Julie for parking near his precious Porsche and blamed her for the damage.  Julie got upset, and quit on the spot.

Julie was a dedicated employee.  Each month she would report to the Reseller almost the exact same thing (with minor fluctuations) – 100 Exchange Standard licenses, 16 Windows Standard processor licenses, 100 SharePoint Standard licenses, and 40 cores of SQL Standard.  Sometimes, she would change the counts based on customer’s coming and going but for the most part the report was stagnant.  The Reseller, happily placed the order without ever asking about their business.   Now that she left, what will Joe do?

Joe is a busy man.  He would never make time or the effort to learn how to submit SPLA usage or understand the licensing rules.   Once Julie left, his workload increased ten fold because not only did Julie report SPLA, but she was responsible for HR, scheduling, customer satisfaction, and making sure the annual company picnic went on without a glitch.  Joe was busy to say the least.  To make matters worse, Julie was the only person in the company to interact with their SPLA Reseller.

Several months went by and no usage was being submitted.  Sure the Reseller would send reminder emails to Julie, but there was no response.  Finally, Microsoft took notice, and started digging into Joe’s reporting.  Now Joe’s problems suddenly took a turn for the worse.

The Audit

It was a cold, rainy Monday, and Joe was really upset – not only did he have a ton of email to go through from the weekend, but his Porsche was getting wet.  He kept staring out his office window at his precious fire engine red baby; soaking wet, with streaks down the windshield.  The site made him sick,  he couldn’t bare to watch anymore.  He took to his email and noticed immediately – Microsoft Self-Audit Review in the subject line.  Joe opened it without hesitation.

The email thanked Joe for his partnership, but informed him that from time to time Microsoft will provide a self-audit compliance check to ensure accurate reporting.  From the email, Joe was to download the MAP toolkit (Check it out here) and provide the data back to Microsoft within 10 business days.  Joe surprisingly cancelled all his meetings that day and proceeded to download the tool.   Once the data was collected, he was to send the data to Microsoft and set up a call to review.  What happened next shocked even the Microsoft compliance guy.

Conference Call with Microsoft

Microsoft:  Good Morning Joe, after some analysis I have a few questions about the data you sent over.

Joe:  Absolutely Mr. Softy.  

Microsoft:  Umm…Say again?

Joe: C’mon man.  Mr. Softy…Microsoft???

Microsoft:  Whatever.  Let’s get to the data, ok?  In my analysis, I noticed you haven’t reported usage in 3 months.  Why?  Are you not providing commercial hosted services?  Your website indicates you are.  Just wondering why you haven’t reported?

Joe:  We had an employee leave the company who was responsible for reporting.  We did everything we can to retain her but she was simply out of control.  

Microsoft:  I don’t really care about why she left, but more concerned about why you didn’t report after she left. 

Joe: Sorry.  I don’t have an answer for that.  I was busy and forgot.

Microsoft:  I noticed you reported essentially the same thing every month which tells me you did not grow or shrink your business.  I did see on your website a press release that mentioned how excited you were to host email for Oil Tankers Inc, one of the largest Oil transportation services company’s in the US.  

Joe:  Yes. It was one of my finest sales calls.  

Microsoft:  I’m sure it was.  That being said, I noticed in the data you sent that over 5,000 users have access to Exchange Server but you were only reporting 100.  Why?

Joe:  I wish I knew.  That darn admin had no idea what she was doing.  I am sorry.  

Microsoft:  Apology accepted.  Now, back to Exchange.  You have 5,000 active users but you only report 100.  There is a license gap of 4,900 licenses.  It looks like they were active six months ago.  That total comes to roughly $50,000 in underreporting.

Joe:  Chuckles.  Yes, but I just sold them the licenses last month.  So really, I only have 1 month of underreporting.  Besides, Exchange is licensed per mailbox. 

Microsoft:  Try again. I just said they were active six months ago.  In addition, I find it hard to believe you just sold the licenses last month when your very own press release matches this date as well.  Last, Exchange is licensed per user, not per mailbox.  Even if it was, the mailbox number and actual users are almost the same.  

Joe:  Ok.  Well sorry.  I will correct it moving forward.

Microsoft:  (Ignores Joes’ comment).  Let’s move on to Windows Server.  You have an ESX host with two processors each.  You are running 8 VM’s on that host.  You are actually over reporting here sir.  Why are you not reporting Datacenter?

Joe:  Because Standard is installed. 

Microsoft:  Actually, you can report the higher edition.  What you cannot do is install Datacenter and report Standard.  Datacenter allows unlimited virtualization.  You could of saved money here.

Joe:  Wow. I had no idea.  I can run Standard but report Datacenter?

Microsoft:  Sighs.  That is exactly what I just said.  Let’s move on to SQL.  You are reporting 40 cores but only have one VM of SQL Server running.  Why so many cores?

Joe:  Because we have over 10 instances running on that VM.  We report 4 cores per instance running on that VM.  

Microsoft:  Yes, but you can run unlimited instances on a VM.  You should really be reporting 4 cores, not 40.

Joe: What!  I am looking at a BIG pay day from Microsoft.

Microsoft:  (Again, ignores the comment).  Let’s move on to SharePoint.  SharePoint, it looks like you have Enterprise installed.  From the data you sent over, it also looks like you provide only Standard features to your clients.  Is that accurate?

Joe:  Yep. Only Standard.

Microsoft:  I can’t believe it.  You are actually reporting SharePoint correct.  Did you know SharePoint and Exchange is licensed by the features accessed not what is actually installed?  

Joe:  No I did not.  The darn admin should’ve told me that.  When can I expect my check from Microsoft for the over reporting of SQL and Windows?

Microsoft:  Well.  Let me think about that.  Never.  

Joe:  Fine!

Conclusion

Throughout my twelve years of managing SPLA, I have had similar conversations and heard scenarios similar to the fictitious story mentioned.  In a lot of compliance situations, a SPLA customer has one person who reports usage.  If that person leaves the company without telling anybody how to report usage or what data is used to collect it, the organization can quickly get of compliance.

In reading the above, you might think that ole Joe came out ahead.  Yes, he did not report accurately or in the most cost effective manner, but he did come out of the audit unscathed.  I would argue that he wasted more money, should have invested in the right resources, and ultimately could have saved his customers money by licensing in the right  manner.  I highlighted below some of the ways Joe could’ve licensed to reduce his exposure and reduce his monthly spend.

  1. Report Windows Datacenter.  If you have more than 7 VM’s on a host, it is more economical to license Datacenter than Standard.
  2. Report the Productivity Suite which bundles Exchange Standard and SharePoint Standard.
  3. SQL Instances – you can run unlimited instances on a VM as long as the VM is properly licensed.
  4. Report USERS not mailboxes when it comes to Exchange
  5. Remember with Exchange and SharePoint, you report the features they have access to not what is technically installed.  Most hosters install Exchange Enterprise (Standard only supports a small number of mailboxes) but report Standard because users only have access to the Standard features.
  6. Reporting usage and stopping will get flagged for compliance.
  7. Stagnant reporting will get you flagged for compliance.
  8. Not reporting what you are advertising.  “I don’t host anymore” when your website says your are is difficult fact to overcome.
  9. Self-audits are exactly what it means “Self”  and “Audit”  The vendor is dependent on the data you provide them.
  10. If you report usage, build a team to make sure it gets reported correctly.  Most compliance gaps happen when an employee leaves the company.  Don’t be dependent on one employee.  If you are dependent on one employee, treat them right!  Poor Julie!
  11. Report on time.  The SPLA agreement says you must report by the 10th for the previous months usage.

Have a question?  Contact info@splalicensing.com

Thanks for reading,

SPLA Man

 

 

 

 

 

 

 

 

 
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Posted by on July 16, 2017 in Compliance

 

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Epic Community Connect for Healthcare Organizations

In this article we will review how Epic Community Connect effects your Microsoft licensing position.  This is a follow up to my earlier post which can be found here

What’s the concern?

If you host/extend Epic (or any EMR software that you do not own) to outside clinics or other healthcare facilities SPLA must be licensed.

What’s an outside organization?

If your organization (who hosts Epic/EMR) does not have at least 51% ownership of the other entity, that would be considered an outside organization as it pertains to this solution.

I’m confused…big time.  Why would I license SPLA when I was told to license through my Enterprise Agreement?

The EA is for your own internal employees.  The Service Provider Licensing Agreement (SPLA) is for companies who host Microsoft software to third parties.

Wait.  I just went to your website and I am not an employee.  Are you saying you have a SPLA agreement?

No.  I don’t host an application or any server whatsoever.  I do pay a web company to host my website.  The web company is under a SPLA agreement if they use Windows Server.

What are my options now?  I already deployed Epic and I don’t have a SPLA.  

I would work with a SPLA Reseller who can walk you through the steps and how to be compliant.  You can email me at info@splalciensing.com if you have additional questions.

Thanks for reading,

SPLA Man

 

 
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Posted by on July 11, 2017 in EMR Software, Uncategorized

 

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Azure Stack, SQL Stretch Database and the Hosting Summit

Last month, Microsoft held their annual Hosting Summit in Bellevue, WA. The good news is SPLA is not going away. Last quarter marked the 20th straight QTR of double digit growth for Microsoft SPLA. What is changing is the competitive landscape. Microsoft does not see SPLA partners as a competitor per se, they see SPLA as one of the biggest competitive advantages over other cloud offerings (IBM, AWS, Google, etc). They have over 30,000 SPLA partners worldwide, and they believe they can leverage those 30,000 partners to offer different cloud solutions.

Microsoft is betting big on what they define as “hybrid cloud” and that’s where they see service providers (SPLA) playing a significant part. Hybrid cloud is not just offloading workloads from on premise to another datacenter, it’s about leveraging different technologies to deliver solutions. As an example, late last year Microsoft offered solution called “Azure Stack” You can read about it here.

It’s the same APIs and same code as what Microsoft delivers through Azure. From a licensing perspective, Azure Stack is cheaper through SPLA (Windows) than it would be to pay through consumption. It will be available to offer this summer through the hardware manufacturers but you can download it now to test out.

The other big bet is SQL, and especially around the feature of stretch database. In laymen terms, it’s taking data that is not often consumed and offloading it to the cloud, reducing resources and consumption on servers locally.   You can read more about stretch database from our friends at MSDN

All said, it was good to meet old friends and say hello to new ones at this event.  If you were at the hosting summit and you did not have the chance to meet the infamous SPLA Man, email me at info@splalicensing.com.  Would love to learn more about your offerings and how we can work together to make licensing simple.

Thanks for reading,

SPLA Man

 
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Posted by on March 27, 2017 in Azure, In My Opinion, SQL 2016

 

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Worried about Windows 2016 Cores?

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

 
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Posted by on September 9, 2016 in Windows 2016

 

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SPLA Compliance Audit- How Not to be the Chosen One!

If you recently went through an audit or just nervous about being notified, I outlined ten steps that service providers can take to arm themselves more efficiently and be compliant.

  1. If you are running Microsoft software, you must license Windows.  All Microsoft software runs on a Windows OS.
  2. If you are licensing SharePoint- SharePoint requires SQL and Windows.
  3. Reporting SharePoint Enterprise you must license SharePoint Standard
  4. Installing Office on a server requires Remote Desktop (RDS) licenses.  Office and RDS licenses should match (cannot have more Office licenses than RDS licenses)
  5. If you have customers bringing licenses into your hosted environment you need to host it in a physical and dedicated environment.  (nothing shared among other customers)
  6. If you are reporting user licenses (SAL- Subscriber Access License) you need a license for each user that has access.  For example, if you have 10 totals users in the month of May and only 4 actually use or access that software, you must license all 10.  SPLA user licenses are similar to your cable bill; your cable provider is going to charge you regardless if you turn your TV on or not.
  7. If you have customer owned licenses in your environment, you must keep all relevant documentation.  This includes enrollment information, start date, end date, and who they bought the licenses from.
  8. Renting out a PC make sure the PC has an OEM license preinstalled.
  9. No virtualizing/streaming Windows desktop OS from a datacenter.
  10. You can install your server on a customer premise, but do not install SPLA software on your customer’s server!

This is not bulletproof by any means.  Use this as a guide when looking at your own environment.  Look at it from the auditors eyes.  What information would they need to verify that I am compliant? The SPUR (Service Provider Use Rights) is the best reference when it comes to Microsoft SPLA.  You can download a copy here.  If you have trouble sleeping at night; this is a must read.

Thanks for reading,

SPLA Man

 
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Posted by on March 5, 2013 in Compliance

 

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