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Tag Archives: SPLA Audit

Answers to Your Cloud Licensing Questions

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.

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

We all love stories.  All of us. We love to hear about good overcoming evil – the prince saving the princess, the bad guy that's captured by the good guy.  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 armour.  Your customer needs someone to deliver a solution, you are just the good guy to do it.

Fast forward a couple years, your business is booming, your customers are happy, and in walks every IT nightmare…the auditor.  Eye glasses 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 are succumbed to a software audit.

How do you defend such evil?  The biggest mistake a hosting partner (or enterprise's in general) often makes is being fearful.  They give the auditors everything they ask.  That's not always bad, but if you don't understand why they are asking for certain things or feel they are painting you in a corner, take a step back.  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

  1. Don't be fearful – no matter what, it's your business and YOUR customers.
  2. 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.
  3. 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 a SPLA partner's account payable dept.
  4. Don't have one person manage your usage reporting.  In a lot of 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?
  5. Don't be pressured.  Audits can take up a lot of resources.  Don't give up customer engagements to satisfy an auditor.  Your customers are the lifeblood of your business, don't delay meetings with your clients.
  6. The publisher needs you.  You are their sales arm.  You bring the hybrid cloud to life.
  7. Find out from the publisher who manages your account.  When was the last time you spoke to them about strategy or best practices?
  8. Relax.  It's not the IRS auditing you (yet)
  9. Don't settle just to settle.  You didn't grow your business to the magnitude you've grown it without having negotiating skills (and guts).
  10. Don't be scared to ask for help.   Have a question?  Email info@splalicensing.com

Thanks for reading,

Mrs. SPLA Man

PS – Slay that dragon!

 

 

 

 

 
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Posted by on August 10, 2017 in Compliance

 

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Top 5 Licensing Questions….Answered

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.

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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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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