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Tag Archives: Service Provider Licensing Agreement

Hosting Options for Charity Customers

We receive a lot of questions on how to properly license charity customers in a hosted environment.  Do they qualify for License Mobility?  Is there SPLA pricing for charity customers?  Is academic pricing the same?   Let’s take a look at these questions and more!

Can I sign an academic addendum and report the lower cost for a charity customer?

No.  The academic addendum is specific about what qualifies as an academic institution; unfortunately, charity is not one of them.

My customer purchased charity licenses without Software Assurance but refuse to pay for SPLA.  Any ideas on how to accommodate? 

Charities can provider their own Microsoft licenses that were purchased without Software Assurance in a 100% dedicated environment.  Charity products are treated the same as standard products.

My customer purchased charity licenses with Software Assurance.  Can they leverage License Mobility?

Yes. Charities can leverage this use right to run software covered by Software Assurance as a separate Virtual Machine on shared hardware at a service provider location.  Windows, must be reported in SPLA and reported at the corporate price.

Does SAL for SA qualify?

Yes. If a customer made the investment in Software Assurance(has active Software Assurance) they can run a second instance in a shared environment.  As the Service Provider, you will report the SAL for SA SKU for each user that has access to the solution.

Is there charity pricing in SPLA?

No.

Is there charity pricing in CSP?

Yes. You can read more here

Thanks for reading,

SPLA Man

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Posted by on August 31, 2017 in SPLA General, Uncategorized

 

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How service providers can use Azure Stack in their datacenter environment

Azure stack is what Microsoft describes as an “extension of Microsoft Azure…”  to on premise (or partner hosted) datacenter environments.  In this article, we will review what it takes to deploy Azure Stack and best practices for partner hosted scenarios.

How a Service Provider Acquires Azure Stack

Azure Stack is available through the Cloud Solution Program (CSP) for service providers. Just like any other CSP relationship, the service provider will ultimately own the billing, the support (if Direct/Tier 1) or through your authorized distributor who will manage the support (Indirect/Tier 2).  Usage can be purchased through CSP or through the Azure hosting exception leveraging your existing Enterprise Agreement.  One thing to note is the actual Windows license.  In my humble opinion Windows Server in SPLA is less expensive and has the flexibility of month/month licensing.  Let’s use a couple examples to illustrate this further:

Scenario 1:  Bill sells Jennifer Azure Stack services through CSP.  Bill is Direct authorized and has a SPLA agreement in place.

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill licenses Windows Server via his own SPLA agreement.
  • Jennifer will pay Bill for her consumption through CSP at a lower rate because Bill is already providing the Windows Licenses.
  • Bill is responsible for all the support and billing because he is CSP Direct authorized.

Scenario 2 – Bill sells Jennifer Azure Stack services through CSP.  Jennifer decides to transfer her Windows Server licenses through her own Enterprise Agreement.  

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill would have to completely isolate the hardware for Jennifer if she wants to transfer her existing licenses to Bill’s datacenter environment.  As with other hosting scenarios, Windows is not license mobility eligible and therefore the Windows licenses must be deployed in a 100% dedicated cloud environment.
  • Bill will sell the consumption via his CSP Direct agreement.  Since she is using Windows licenses that were already purchased, he will only pay the base consumption rate.
  • Bill will provide the support since he is providing this as a service to Jennifer as part of the CSP program.

Scenario 3 – Bill deployed Azure Stack in his datacenter.  He’s running Jennifer’s SQL Server she purchased with SA from her Open agreement.  She will also pay Bill for the Azure Stack consumption through Bill’s indirect CSP agreement.

  • Bill will purchase Azure Stack from an authorized hardware vendor.
  • Bill will have an agreement with his authorized Indirect distributor to resell Azure Stack through CSP.  (Bill is not Direct authorized, he must use a distributor to enable him to resell CSP to his end customers.  The distributor will provide all the support and billing platform).
  • Jennifer will transfer her SQL Server licenses and CAL’s she purchased with Software Assurance over to Bill’s shared cloud environment through license mobility.

Conclusion

These are all hypothetical scenarios used to illustrate the different licensing options available to SPLA partners.  As you can see, the licensing can be complex as you are crossing multiple licensing programs – CSP, Enterprise Agreement, and SPLA.  I am always interested in different scenarios.  Have one?  Email me at info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on July 18, 2017 in Azure, 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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Why Windows 10 in CSP stinks now but could be GREAT later

Microsoft made a pretty big announcement around Windows 10 and CSP.  Here’s a breakdown for those that are interested:

  1. Software Assurance is not included
  2. Windows 10 is available E3 and in CSP only
  3. Customers need a qualified OS license.  In other words, this is an upgrade license only.
  4. Not available under SPLA
  5. Not available in the shared computer activation model.
  6. Per user licensing with the ability to license on up to 5 devices per license.
  7. No minimum and surprise…no maximum either.
  8. Subscription is 1 year
  9. Pricing varies
  10. 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:

  1. 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 🙂
  2. Deployed Hyper V (they must have some incentive to do this)
  3. 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

 

 

 

 
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Posted by on September 29, 2016 in VDI

 

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SPLA Audit start to finish

Your business is doing great, your sellers and customers are happy, you are making money instead of spending money, when out of the blue….BAM…you receive an audit letter.  Sound familiar?

So what do you do?  Your first reaction is panic.  Your second reaction is to call a lawyer.  Your third reaction is to blame your reseller.  I think that about sums it up.  If you disagree, I’m not 100% sure you are being truthful with yourself.  If you do agree, I also think you are making a HUGE mistake.  Sounds a little odd doesn’t it?

First thing you need to understand is it’s not your fault.  It’s not as if you are purposely trying to be out of compliant.  Microsoft knows this as well.  SPLA is a difficult program and very hard to understand. As I pointed out in the “About” section of this blog, there is little information written about the SPLA program leaving service providers vulnerable.  The SPUR?  Forget about it. That’s why I created this blog in the first place.

I think that is why SPLA customers call a lawyer to help guide them.  This may help you sleep at night, but is it REALLY helping?  I will let you determine that after the dust settles.

What does happen during an audit? I don’t care if this is the first step or fourth step but at some point you will have to collect data.  Data that PROVES the reason you reported the way you did.  One of the biggest mistakes a SPLA provider can make is not reporting indirect access.  Again, not your fault.  Who has any idea of what “indirect” really means?  Think of indirect as Microsoft software that is used to run your other applications that you market to your customers.  You have an application that you developed that reports back to SQL using Excel.  Users have no idea they are using SQL, all they know is the application they use.  But since SQL is part of your hosted solution…it must be reported.  Make sense?  That’s also why Windows will always need to be reported.  Try running Exchange without a Windows OS.  Not going to happen.

Data can also mean the licenses that your customers own that they bring over to your environment.  How do you know who owns what?  Are there enough CAL’s?  One of the arguments service providers make is they can go after their customers if being audited.  There’s an easy conversation right?  Remember, you want to keep customers not lose them.

Some service providers have learned that their end customers install software on VM’s without informing them.  How do you know what is actually being installed?  So take a look at your datacenter; are your customers installing software you don’t know about?  Collecting this information after the fact is a difficult process.  This leaves auditors with no choice but to make a best guess.  Best guesses can cost you significantly.

So after all this data is analyzed by the audit team, it is then delivered to Microsoft.  That’s when you present your case.  They will take things into consideration, but understand that if you are missing information, it makes your argument that much more difficult.  Don’t blame your reseller, that doesn’t work.  Don’t rely on a lawyer, that doesn’t always work either.  Educate yourself.  That’s the best advice I can provide.  Just by taking the time to read this I think you are on the right path.

Happy to walk you through the process in greater detail.  I am one of the few that actually gets it. My email is at the top righthand side of this page.

Thanks,

SPLA Man

 

 
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Posted by on September 18, 2014 in Compliance

 

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CRM Price Increases

For those that read my earlier post “Predicting the future” one intuition has already come true.  Microsoft announced price increases for Microsoft Dynamics CRM come January, 2015.

All 3 SPLA CRM SKU’s are effected  (Basic, Essentials, and Service Provider/PRO edition).  For complete breakdown I would suggest reaching out to your SPLA reseller.

So why the increase?  Microsoft stated “The CRM price change is intended to more closely align our online and on premises pricing.”  So there you have it.

Windows, Core Infrastructure Suite (CIS) and other Dynamics AX, NAV, GP will also see increases.  This was previously announced by Microsoft and communicated through the reseller channel.

Thanks

SPLA Man

 
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Posted by on September 9, 2014 in CRM

 

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Why SPLA?

In most articles I reviewed best practices, updates, and licensing guidance as it pertains to the SPLA program.  As cloud solutions evolve, the licensing becomes more complex.  That’s why I thought we should take a step back and take a moment to review the basics of the program.  I am a big believer in order to fully understand a licensing program, you really should start at the beginning.  Too many times we jump headfirst and start worrying about “how do we license SQL in a virtual environment” or “why no VDI darn it!”  So let’s all take a deep breath, relax, and let’s understand what it is we are actually trying to accomplish. 

What is a license?

I think we can all make a reasonable assumption to the answer to this question.  Again, we are starting at the basics and moving up from there.  The SPLA Man definition of a license is essentially your right to use something.  You buy a book, you need to purchase the right to consume the author’s material.  You buy a software license, this gives you the right to install it and use it.  In the case of Microsoft, you did not write the code for Microsoft Exchange, so you need a license to use Exchange/email.  There’s all sort of examples of a license, but I think you get my point. 

So if you buy a license, who get’s to use it?  In most instances, it’s you.  Why buy something and give someone else the right to use it?  If you buy a computer from HP and the PC comes with a copy of Office and Windows 8, the Office and Windows 8 gives that device a license.  Those license come preinstalled live and die with the machine – this is called Original Equipment Manufacturer (OEM for those taking notes).  If you read the little booklet that comes with your computer it will define this not so clearly.  That booklet is called a EULA (End user licensing agreement). 

Volume Licensing

Now let’s say you’re an owner of a company and have 50 employees.  You set up a CRM server to deploy to your 50 employees.  In this model, they would need a server (CRM Server License) plus 50 client access license to access that server.  Since it’s for internal employees, you would use volume licensing.  (greater discount than going to a retail shop and purchasing the licenses one at a time)

Outsourcing

Let’s say you lost the instruction booklet on ‘how to deploy CRM” and frustrated because you already purchased the licenses.  You need help.  Not only did you lose the instructional booklet you don’t have the budget to purchase the hardware to run CRM nor the bandwidth to manage anymore.  You look at third party options.  You call Brett’s Hosting who can deploy CRM on your behalf while leveraging your license purchases.  If you purchased the licenses with software assurance those licenses could potentially qualify for license mobility (CRM does).  The service provider can dedicate a VM for CRM and host the VM on shared hardware. Windows would still need to be reported under SPLA (since Windows is not part of license mobility) This can be more cost effective for both parties.  If you did not purchase those licenses with software assurance, you can still bring those licenses into your datacenter BUT Brett’s Hosting would have to dedicate the hardware and the VM to one customer.  What’s dedicated?  Microsoft defines dedicated as “Any hardware running an instance of Microsoft software (OS or application) must be dedicated to a single customer. For example, a SAN device that is not running any Microsoft software may be shared by more than one customer; whereas, a server or SAN device that runs Microsoft software may only be used by one customer.” (source: Microsoft Desktop Virtualization Guide – Check it out here)

Service Provider Licensing Agreement (SPLA)

This leads to the last option and the entire point of this blog – SPLA.  Why would a service provider use or need SPLA licenses?  You know those 50 CRM licenses you purchased for your internal employees?  You guessed it, those can only be used for internal employees.  Why?  There’s a little blurb in the Product Use Rights (PUR) that states “No Commercial Hosting” If you have a customer that does not own the licenses, but they want to access your server – That’s SPLA.  Anytime your hosting Microsoft software on BEHALF of a third party, that’s SPLA.  Let’s say you have a website in which you sell products out to the entire world;  Would you need SPLA?  Short answer…no.  Why?  You have a website that you deploy in your own datacenter that you use to run your business, not someone else’s.  If you went to a third party and asked them to host a website for you that will allow your customers to access, the service provider would use SPLA.  Clear as mud?  Exchange might be a better example.  If you don’t have the bandwidth to manage Exchange in house anymore, you can go to companies such as Rackspace to provide email for you.  They will charge you “X” amount of dollars for email per month.  To access Rackspace’s Exchange server you would need a license.  That license is called SPLA.  All service providers that host Exchange, would require SPLA (unless you bring your own licenses such as the outsourcing example above).

That’s licensing 101 in a nutshell. Stay tuned for licensing 200.  Ugh.

Thanks,

SPLA Man

 

 

 

 

 
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Posted by on May 19, 2014 in Uncategorized

 

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