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Tag Archives: SPLA Tool

SPLA Partners: It’s time to be proactive

01 Apr

One of the issues with SPLA is that the program is very reactionary. You report in the arrears, you bill clients based on what they used previously, and no one cares about compliance until you receive an audit notification. It’s time to be proactive in this reactionary world.

With over 20 years of experience working with cloud providers in various capacities, one thing they all have in common is the challenges of licensing. For many organizations, they license the same thing month after month, without any data or understanding of why, solely for convenience. When you are audited, there is a typical 3-year lookback period. If you do not understand the licensing requirements, you will be charged a penalty for licenses not reported during that period. That tells me two things: 1) You are out of compliance and will owe a significant unbudgeted expense. 2) You are not charging your customers correctly, either.

For a moment, set aside the compliance risk and consider how long it takes your sales organization to close a deal. Most sales cycles are typically 3-6 months. You spent all that time, resources, and education to land that customer. Fast-forward 3 years, and all along, you have been charging them incorrectly. You are then faced with either telling the customer they owe for those licenses (which is unlikely, as the customer will likely just leave) or you are forced to absorb the costs. That’s why it’s crucial to be proactive before audit time. In addition, this is your opportunity to eliminate risk before it becomes a risk.

How do you become proactive? It’s important to understand what you have installed now. You can do this by running scripts. If you were audited in the past, most auditors provide this script; if not, I have one used for audit purposes that I can send to you. The tool/script is only one side of the story, though. You have to understand how to connect what is installed to the licensing rules. We perform this analysis by creating an Effective License Position (ELP) report. It will show what you should be reporting now and potentially what you would owe if audited based on your SPLA usage report. We can correct the mistakes now and provide education to your customers about their options if for whatever reason what they are doing does not meet the licensing rules (as an example, no software assurance).

What you need is not a tool, what you need is a SAM program to help you create processes and policies now rather than later. Think about this, if you are reporting 100k a month or 5k a month, don’t you want to ensure it is right?

Have a question about this or other topics or would like to review more, please email info@splalicensing.com Together, we can navigate the treacherous waters called Microsoft licensing.

Thanks for reading,

SPLA Man

 
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Posted by on April 1, 2025 in Compliance

 

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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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To use a tool or not?

28 Apr
Ahh, SPLA reporting. We’ve heard the line, the only sure thing in life is death and taxes. The only thing certain for a service provider is that Microsoft will change the licensing rules (frequently) and SPLA reporting. There’s not much we can do about Microsoft changing the licensing rules, but alas, there is something you can do about SPLA reporting. I’ve written this on several occasions, but it’s worth repeating. The biggest mistake a service provider will make is believing that SPLA reporting is a requirement by Microsoft. Yes, it is a requirement by Microsoft, but that is not the only reason you should track licensing. Let me provide an example, HostingRUs has one man managing their SPLA reporting. He runs a “foolproof” script that will identify everything in their environment. He reports all the licenses installed and looks at invoices to know the number of users to report. He submits it to his reseller. There is nothing wrong with that strategy except for one thing – nowhere in the reporting process is anyone tracking licensing rules, updates, optimization, and, more importantly, billing. So in the above example, yes, HostingRUs is reporting licenses to Microsoft, but they should consider so many other areas. Here’s another example. A member of my site (Mscloudlicensing.com) wrote me, saying, “Microsoft is really Sh*tting on me.” He has an application that requires Office Excel; his customer already owns Office 365. He wants to use the O365 license that his customer already purchased to be installed in his datacenter. Obviously, that is not possible without the QMTH addendum. That’s when he got a bit crabby and threatened an anti-trust lawsuit with Microsoft. (Good luck, my friend, but my money is on the company with a trillion dollars in the bank). What the service provider failed to do in this example is look at his datacenter environment from a perspective of what he can do, not what he can’t. He didn’t know he could offer just Excel (instead of the entire suite). He also didn’t consider using open office. He also had very little knowledge of who accesses the application indirectly. If you believe Microsoft changes the rules A LOT and SPLA reporting are cumbersome; then maybe a tool is worth it. I recommended Octopus Cloud to the service provider in my example above. Many service providers use Octopus to keep track of SPLA reporting, but more are using it as a business intelligence tool to understand what is happening inside their datacenter. Octopus helped him know what is installed versus what is reported (a big miss for him was reporting Office Standard, but Office Pro was installed – not only was he underreporting, but in reality, he just needed Excel in the first place, a third of the cost of Office Standard!) Can you imagine if he was audited? His customers just required Excel, but he was on the hook for Office Pro just because his engineer thought it was convenient when he installed it! So when I asked (in the title) should you use an SPLA tool or not? I would argue you can’t afford not to. If you report 1,000 dollars a month or 100,000 dollars a month, don’t you want to make sure you got it right? Thanks for reading, SPLA Man
 
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Posted by on April 28, 2021 in Uncategorized

 

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