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Tag Archives: SPLA Audit

Why a SAM Practice is Important

15 Jun

I recently took some time off to spend with Mrs. SPLA Man and the kids when my 13 y/o son asked me, “Dad, why do service providers only have one person reporting SPLA usage to their reseller? Why would they report anything if they didn’t know it was right? After all, you wouldn’t even drive away from a fast-food drive-thru or pay for a new pair of shoes unless the order was right or the shoes fit! So why would an SPLA provider spend thousands (if not millions) of dollars each month when they don’t know if what they are ordering is right! And then Dad, they get audited and have to pay even more!”

I was never so proud of my son. Me and Mrs. SPLA Man certainly raised him right. That story about my son was a bit silly, but the moral of the story is accurate. Why do service providers spend so much money reporting usage if they do not know it’s right?

I think they know it’s not right, but they also think it’s not that far off either. How many of you who have gone through an audit said this prior; “We might be off a SAL or two, but in the end, we won’t owe much. After the audit, they find themselves owing millions of dollars. So much for being off a SAL or two! Here’s where I think service providers do themselves a disservice in not having a SAM practice/plan in place.

  1. They only have one person reporting usage. In most cases, a procurement person or office manager will email an engineer, and the engineer will send an excel report with what he/she believes should be reported. The office manager reports it to the reseller. The problem with this scenario is what happens if the office manager leaves? What happens to the relationship with the reseller? Does the engineer know they should license what is installed? A great example is Office Pro Plus/Std. Most engineers will install Office Pro Plus, forget about it, and report Office Standard. Don’t be that guy!
  2. You are reporting simply because it’s a requirement by Microsoft. Yes, reporting is a requirement, but reporting SPLA should be used as a tool to gain information inside your data center. What is installed? What do users HAVE access to? Are we reporting SQL Standard when we installed SQL Enterprise? We report SQL Web, but is it a public website we are hosting? Reporting SPLA usage should provide you with insight into how profitable you are per individual customer. If you get audited and find out you should be reporting SQL Enterprise (that’s what is installed), but you report SQL Standard; how easy is it to go back to your customer and ask for more money? You just lost the customer and lost out on all that additional revenue. Reporting is about business intelligence.
  3. Not have a tool in place or SAM practice. The two go hand in hand (SPLA tool and SAM practice). You can have a tool, but what good is it if you only use it to scan a small portion of your data center? Are you saying the other parts of your data center are licensed 100% accurately? You NEED a SAM practice – document licensing rights, document contracts with your customer, have a paper trail with your reseller, know pricing changes, and use the tool to collect the actual data. Don’t know a SPLA tool provider? Use Octopus Cloud They are the only tool provider designed specifically for multi-tenant environements with licensing intelligence built in specific to the SPUR. Yes, I do marketing for Octopus 🙂

In summary, I know spending money to invest in an SPLA tool or SAM practice doesn’t seem appealing (it’s kind of like buying new windows for your house. Wow! I spent a thousand dollars on a new window, but no one would ever know it besides you). The same can be true about a SAM practice. A SAM practice will not win you new customers, but here’s one thing I will promise, it won’t lose you customers either.

Thanks for reading,

SPLA Man

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Posted by on June 15, 2021 in Uncategorized

 

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Answers to Your Cloud Licensing Questions

07 Nov

Will Azure be part of the SPLA program?

I wouldn’t think so and wouldn’t know how they could incorporate the two.  Azure is Microsoft hosted and SPLA is partnered.   Microsoft will want to keep SPLA and Azure separate.

Is Azure Stack part of SPLA?

Azure Stack by itself is not part of SPLA.  What’s part of SPLA is the Windows licenses.  As a service provider, you could deploy Azure Stack, pay the base consumption rate, and use Windows licensing with SPLA.  In fact, I think it’s less expensive to do it this way.

If my customer wants to use their own Windows license on Azure Stack, do they also require CAL’s?

Yes.  You need to pay attention to the Product Terms to ensure compliance.  As an example, volume licensing prohibits hosting.  You cannot install your own Windows licenses through volume licensing and host using Azure Stack.

Does Office 365 qualify for the SAL for SA product in SPLA?

The only Office 365 product that is eligible for SAL for SA is Skype.

Is SPLA pricing going up?

Yes and will not be decreasing anytime soon.

Since AWS offers dedicated hardware, could I transfer my customer’s license to their datacenter without Software Assurance?

Yes.  If its dedicated hardware Software Assurance is not required.

What about Azure?

No, you would need Software Assurance.

Will Microsoft finally allow MSDN to be licensed in my datacenter?

Probably not.  Although if you use Azure, MSDN is eligible to be transferred.

If I sell CSP through 2-Tier distributor, can I sign the QMTH addendum?

No.  You must be CSP 1 – Tier to qualify for QMTH.

Can I outsource support for certain software through CSP?

Yes.  You an resell the solutions you can support and leverage another partner for support for other products.

Thanks for reading,

SPLA Man

 

 

 

 

 

 
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Posted by on November 7, 2017 in Top 5 Licensing Questions

 

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More SPLA Questions…More Answers.

13 Oct

Here is a list of some of the questions we received this month.  Enjoy!

Why does Microsoft not allow a SPLA SQL VM to be installed in a public cloud?  I understand if you were licensing the physical layer, but if you want to install on a VM, you can easily allocate the number of cores and report accordingly.  Any ideas?

No.  Honestly there is no reason outside of it’s just prohibited.  You cannot license SPLA cores/processors in public clouds even if the VM is dedicated.

What can be installed in Azure through SPLA licensing?

Anything that is licensed by SAL can be moved to Azure.  For your end customers, anything that has Software Assurance and is license mobility eligible can be transferred including: Windows 10 E3  (QMTH), Office 365 Pro Plus (QMTH) and MSDN.  Your end customers can also leverage Azure HUB to get discounted pricing for the Windows Servers they purchased with SA.   Check out the Azure FAQ site https://azure.microsoft.com/en-us/pricing/licensing-faq/

Is Microsoft going to discontinue SPLA?

Nah.  I bet it will be merged into a new program though.  Just a hunch.

I received a compliance notification the other day.  Am I in trouble?

Depends on the type of notification and if you are out of compliant :).  If you have questions, we can review it with you.  Just email info@splalicensing.com

Can I report Windows 2016 but run Windows 2012?

Yes.  No problem there.  What you cannot do is license Windows 2012 and run 2016.  Don’t do that.

Thanks for reading,

SPLA Man

 

 

 

 

 
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Posted by on October 13, 2017 in Top 5 Licensing Questions

 

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Slaying the dragon and saving the princess – audit style

10 Aug

We all love stories—all of us. We love to hear about good overcoming evil – the prince saving the princess, the bad guy that the good guy captures.  In short, what we love are fairy tales.  The reality is we do not live in a world of fairy tales, and sometimes, yeah, the bad guys do win. The prince, admired by many, is not such a good prince after all.  We trust without knowing they can be trusted.  So, what does this have to do with audits?

Businesses are built based on one concept – to solve a customer’s problem.  You are their hero to save whatever pain they have or problem they can’t seem to overcome.  You are (as the story goes) their knight in shining armor.  Your customer needs someone to deliver a solution; you are just the good guy to do it.

Fast forward a couple of years, your business is booming, your customers are happy, and in walks every IT nightmare…the auditor.  Eyeglasses the size of saucers, a necktie tied just a shade too short, and a laugh that is about as annoying as a nail on a chalkboard; you succumb to a software audit.

How do you defend such evil?  The biggest mistake a hosting partner (or enterprises in general) often makes is fear.  They give the auditors everything they ask.  That’s not always bad, but if you don’t understand why they ask for certain things or feel they are painting you in a corner, take a step back.  Please don’t give in without understanding what they are asking and why.  Why do they want to know who your customers are?  Why do they ask about customer-owned licenses?  Software Assurance? Historical information?  If you can’t answer “why,” maybe you need help.  In walks SPLA Man.  Nah, in walks Mrs. SPLA Man, every auditor’s worst nightmare.  She put together the following list on how to better prepare yourself for the unexpected.

Mrs. SPLA Man’s List

Don’t be fearful – no matter what, it’s your business and YOUR customers.

Have a plan.  Know what’s in your customer agreements.  If you need to refresh your agreement language, do it.  Software licensing rules change daily; if you have not updated your contracts on license mobility or datacenter outsourcing, update it now.

Don’t bring unwanted attention to your organization.  Always report usage on time and pay on time.  80% of all delinquent reporting has nothing to do with the reseller or Microsoft.  It has everything to do with an SPLA partner’s account payable dept.

Don’t have one person manage your usage reporting.  In many cases, a person leaves a company who was the only one who worked with the reseller directly.  When that person leaves, who is responsible for reporting?

 
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Posted by on August 10, 2017 in Compliance

 

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Top 5 Licensing Questions….Answered

05 Aug

You have questions…We have answers.  Another month, and another list of licensing questions asked by the hosting community.

  1. I have a small hosting company that runs primarily Linux machines with a few Windows VM’s mixed in.  The only thing we do customer facing with Windows systems is a small number of users access our application via a published app over RDP Web.  Do I need SPLA?

Yes.  You have Windows running in your cloud environment.  It does not matter how small or large the environment is.  One thing you might want to check out is the Cloud Platform Suite.  You must run Hyper-V and System Center but it could lower your costs. 

  1. I get CSP from one reseller and SPLA from another.  Do I qualify for the new QMTH addendum or do I need to get it all from one source?  Totally confused.

In QMTH, you are the CSP partner, not someone else.  I am guessing you are using the CSP reseller to go indirect.  If that is the case, you must become CSP Direct authorized.  Purchasing CSP from a third-party does not qualify you for QMH.  That being said, your customer can purchase CSP from any organization and you can host it for them (if you are QMH authorized).

  1. The audit bug got me. I think it’s because my reseller refuses to submit my usage report even though I sent it to them several times.  Any advice?

Microsoft can audit any partner they choose.  There’s not one factor that triggers an audit.  More eyes will be watching if you are continually delinquent on your monthly report.  The biggest reason why a reseller does not submit a usage report is because the provider is delinquent on their payments. Are you up to date? All payments paid to the reseller?

  1. Can I rent a PC using the QMTH addendum? I know in the past I could rent a Windows desktop license in SPLA.  Can I do it now?

I think it makes sense to do so but unfortunately it is not part of the addendum.  I would love feedback here.  Section C of the QMTH addendum states” “This Amendment does not authorize Customer to resell, distribute, or otherwise provide End User or CSP Licensees direct access to Windows 10 Software” In order to lease a PC to a third-party you need to follow the Microsoft Leasing Agreement. 

  1. I report Office, Exchange, SharePoint and Skype. I heard rumors of a price increase coming in the pipeline from various resellers that I reached out to.  Any truth?

Let me put it to you this way – The products you just mentioned happen to be part of Office 365.  I don’t foresee Microsoft lowering pricing in SPLA for the same products offered by Microsoft.

Thanks for reading,

SPLA Man

PS – What was the SPLA partner’s response to my answer for question 5?  “That’s BS Mate!”  My response?  “Don’t shoot the messenger.”  Have a question?  Email info@splalicensing.com

 
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Posted by on August 5, 2017 in Top 5 Licensing Questions

 

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Breaking down Microsoft’s Q4 and what it means for your business.

21 Jul

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

 
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Posted by on July 21, 2017 in In My Opinion, Uncategorized

 

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Epic Community Connect for Healthcare Organizations

11 Jul

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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Top 5 Compliance Trends for MSP’s and SPLA

05 Jul

There are so many license changes and gotchas with SPLA, Azure, AWS, and all the others that I thought I would highlight for you some of the trends we see when it comes to compliance.

  1. Licensing Office Standard when Office Professional is installed.  In many cases, an IT administrator will inadvertently install Office Pro, report Office Standard to their procurement team who in return reports it to the reseller.  The IT admin will leave the company, and the procurement team continues to report Standard not knowing Pro is installed until audit time.  In this situation, Microsoft will check when Office was installed, and take the delta of what was reported (STD) v. what should be reported (Pro).  Don’t make this mistake.  Many partners are only charging their customers for Standard pricing!
  2. Not reporting SPLA at all.  Sounds silly, but many providers focus on developing software and not on the licensing.  We have found instances in which the procurement manager (who was in charge of reporting SPLA) left the organization and no one else took over their responsibility.   The reseller continues to email the procurement manager but obviously the email goes unnoticed.  After many months, their SPLA will be terminated and all licenses will have to be trued up.  The problem with this scenario is not just unexpected licensing expense, but when your SPLA terminates, you must sign a new one.  When you sign a new SPLA, you must adhere to the latest SPUR use rights.  As an example, if you had a SPLA prior to the Windows core licensing change, you could continue to report processors.  If your SPLA terminates, you would be forced to license by core now instead of later when your previous agreement (that is now terminated) expired.
  3. Using a VL copy of Office to deploy Shared Computer Activation (SCA).   SCA is specific to Office 365.  If you install Office Pro Plus VL, it goes against the product use rights in which Office (without SCA) cannot be installed on shared hardware.  It takes a lot of negotiation power and time to prove you are SCA eligible, the customer purchased Office 365, and you inadvertently installed the wrong product.
  4. Using License Mobility without License Mobility.  This is by far the most popular compliance trend.  Many organizations do not know what is installed in their datacenter when it comes to customer owned licenses.  Be sure to have the right documentation, addendum, and licensing to ensure compliance.
  5. Leasing an application, hosting the application, and purchasing volume licensing agreement to offer software as a service.   A healthcare company may lease an EMR application, host the application to other healthcare organizations, and license the infrastructure through volume licensing.  If your organization does not own the application you are hosting, you must license it through SPLA.  Self-Hosted for ISV is only eligible for providers who develop and own the application.  This means the code, the rights, everything must be owned by the organization.  Leasing the application and using other plugins you may have developed does not qualify.

I hope this provides you a little insight into the world of compliance.  If you find yourself out of compliant, let us know and we can connect you to the right resource.  info@splalicensing.com

Thanks for reading,

SPLA Man

 
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Posted by on July 5, 2017 in Compliance

 

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SPLA Audit Support

27 May

If you are facing a SPLA audit or concerned you are underreporting or perhaps even overpaying for licenses, please reach out to blaforge@splalicensing.com.  I am happy to make suggestions or review your report. This is not a solicitation,  I do this as a hobby. (Some people take up golf, for some reason I took up SPLA). 

Thanks,

SPLA Man

 
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Posted by on May 27, 2014 in Uncategorized

 

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