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Dynamics 365 Licensing for SPLA

Over the past several weeks, I’ve received several inquiries around Dynamics 365 what it means for CRM SPLA partners.  In this article, we will review the changes and when the changes will take effect.

Dynamics 365 for SPLA

In today’s SPLA licensing model, there are three products available –  CRM Essential, CRM Basic, and CRM Professional.  All come with different functionality and all come with different price points.  Those products will remain up until your agreement expires.  As with other products, once your agreement expires, you should report or license the new products.  In some cases, you are allowed to downgrade and run previous versions, but you must report the latest and greatest.  As an example, SQL 2016 is the latest edition of SQL, but that doesn’t mean you have to deploy SQL 2016; you can run 2012 or 2014 or God forbid 2008.  However, once you sign a new SPLA, you must follow the terms in the SPUR at the time of signing.  In this example, even though you deployed 2008, doesn’t mean you can license SQL 2008 by processor, you must still report it by core.  Dynamics CRM works the same way.   With Dynamics, the new products are Dynamics 365 Sales, Customer Service, and Team Members.  All come with bells and whistles and all come with higher pricing.  If you have an active SPLA prior to the announcement (November, 2016) you can continue to report the old products up until your agreement expires.  Once you sign a new agreement, you must report the higher priced products.

What are the options?

I’ve worked with a couple of Dynamics CRM hosters who had their agreement expire two months after Microsoft made this announcement.  In other words, Microsoft announced these changes in September (give or take – most widely known to resellers and partners in November) but their agreement expired in October.  The poor CRM providers are really in a pickle.  Microsoft dropped the bomb on them and two months later their pricing almost doubled!  What are they supposed to do?  Blame their reseller? Sure.  Everyone does.  Blame Microsoft?  Yes.  But that only gets you so far.  Cry?  Always.

Microsoft made some adjustments and offered “transition pricing”.  Transition pricing allows SPLA partners who have an active SPLA prior to November, 2016, the ability to report lower transition pricing up until their agreement expires.  The transition pricing is lower than new pricing but still doesn’t offer much of a discount.  When your agreement does expire, Microsoft will force you to license the under the new licensing and pricing model.

My Opinion

In my opinion, CRM provider are the old Exchange provider.   When Office 365/BPOS came about, small Exchange providers found it very difficult to compete.  It wasn’t just from a licensing perspective but also managing and deploying Exchange became too costly.  What happened?  Smaller Exchange providers are now CSP or out of business.  Dynamics CRM is now the old Exchange.  Microsoft is not going to lower SPLA pricing for Dynamics CRM.  It is not in their best interest to do so.  Harsh reality?  Yes.

Allow me to put on my Microsoft hat. What do you do?  There’s a couple of ways to think about it.  On one hand, Dynamics 365 isn’t all that bad.  I do think Microsoft rushed to market with the product.  I also think there are ways to up sell customers into the latest product.  There are opportunities to offer Dynamics CRM and deploy CRM and manage CRM.  For many organizations, CRM is the lifeblood of their sales.  CRM goes down, it’s bad for their business.  In speaking to a colleague, the LinkedIN acquisition makes Dynamics 365 an interesting proposition.  If you are able to seamlessly host Dynamics 365 on your platform and integrate their LinkedIN contacts as well, there could be a compelling reason to transition to the latest and greatest.

Ok, now my Microsoft hat is off.  I think Microsoft should be more patient and lengthen the transition pricing to make it more compelling for CRM hosters and to their customers.  I think service providers are the bread and butter to Microsoft hosted offerings.  SPLA is the one program that differentiates Microsoft v. Amazon v. Google.  Thirty thousand service providers worldwide who are willing to host Microsoft technology.  You don’t want to abruptly interrupt their business.  After all, no matter if they get Dynamics from a Microsoft datacenter or from a partner, Microsoft wins.  Amazon can’t say the same thing.

Would love to hear comments.  You can email me at info@splalicensing.com or leave a comment below.

Thanks for reading,

SPLA Man

 

 

 
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Posted by on May 9, 2017 in Dynamics 365

 

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Steps to take to limit SPLA audit exposure

It’s the fourth quarter at Microsoft, this means audits are in full swing.  One of the easiest ways to collect large upfront payments are through SPLA audits.  Knowing this, what steps can you take to limit your audit exposure?

  1. Inventory – Although you submit a SPLA usage report each month, licenses are missed inadvertently.  When collecting inventory of what you should and should not report, be sure to include customer owned licenses.  If ANY customers are bringing licenses into your datacenter, they must have software assurance if it’s a shared environment.  Secondly, make sure to take a hard look at SQL.  To no one’s surprise, SQL is very expensive.  If you miss license SQL, it can add up really quickly.
  2. Agreements – Which MBSA agreement did you sign?  Don’t know what a MBSA agreement is?  Please ask your reseller for a copy.  Every SPLA customer has a signed Master Agreement.  This is the umbrella that ties all your Microsoft agreements together including SPLA.  There’s specific language in the agreement that goes over audits and the timeframe in which they are able to audit historically. Look closely at your agreements with your customer.  Did you mention they are responsible for licenses they bring into your datacenter?  Did you send them a license verification form for license mobility?  Do you have language that states they are responsible for anything under their Microsoft agreement but you are only responsible for yours?  Do you make the end user license terms (part of your signed SPLA) available to all customers?  Don’t know what an end user license terms agreement is?  Ask your reseller.
  3. Check AD closely.  Do you have administrative accounts that you are reporting?  What about test accounts?  Read your Microsoft SPLA agreement around testing, developing, and administrative access.
  4. Label server names appropriately – Label if a server is “passive” and label a server if it’s “development”.  This can save you time with the auditors.
  5. Check server install dates – If a server was active June, 2013 but nothing was reported on that server until June, 2015; Microsoft is going to ask A) what that server is doing and B) Why haven’t you reported it.  If it’s doing nothing, than shut it down before the audit.
  6. Check SAL licenses –  Do all users who potentially HAVE access are being reported?
  7. Check Office licenses – Do all users need access to Office Pro Plus?  Can they get away with Standard?  Did your engineers inadvertently publish Visio to every user when it only needs to go to a handful of end users?
  8. Double check server versions – Did your engineers accidentally install SQL Enterprise when it should be Standard?
  9. Are you taking advantage of all the use rights available?  As a SPLA, are you aware you can provide demonstrations to your customers at no charge?  Are you aware of the admin rights?  Are you aware you can run 50% of what you are hosting externally – internally?  (must actually report it all under SPLA – they are not free).
  10. Virtualization rights – Are you reporting SQL Enterprise to run unlimited VM’s? Are you running Windows Datacenter?  Remember, you do not license the individual VMs for Windows Server.  (You count physical cores which allows 1 VM for Standard or unlimited for Datacenter).
  11. MSDN, VDI, and other restrictions – No, you cannot host VDI and MSDN in a shared environment.  If you are, dedicate the servers immediately.  If you are hosting from the same hardware you are running internally, this also must be separated.
  12. Hiring Experts – Are they really experts or just advertise as such?

Hope this helps.  Any questions email info@splalicensing.com

Thanks for reading,

SPLA Man

 

 
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Posted by on April 25, 2017 in Compliance

 

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Core Licensing for Windows and SQL

In today’s article, we will review Per Core licensing in SPLA for Windows and SQL Server.

What products are licensed by core?

Application – SQL Server 2016

Per Core (OS) – Windows Server Standard 2016;Windows Server Datacenter 2016; Core Infrastructure Datacenter 2016; and Core Infrastructure Standard 2016.

How is it licensed for SQL 2016?

Physical Core – Removed the core factor table with the release of SQL 2016.  The number of licenses required equals the number of physical cores on the Server with a minimum of 4 cores per physical processor.  For Enterprise, you can run unlimited number of instances on the physical or virtual OSE’s (In other words, unlimited virtualization rights with SQL Enterprise).   For other editions, you can run unlimited instances on the physical server (not virtual).

Individual OSE (individual VM’s)  4 cores per minimum virtual OSE.  (license the number of cores you assign to a VM with a 4 core minimum) You are allowed to run unlimited instances on the virtual OSE provided that each virtual OSE is properly licensed.

SQL is sold in packs of two cores.  Again, you cannot license 1 – 2 core pack of SQL.  You would be found out of compliant pretty easily since the licensing rules state you must report a minimum of 4 cores not 2.

How is per core license with Windows?

Licensing is very similar to the old model, just licensed by physical core instead of each physical processor (minor change).

The number of licenses required equals the number of physical cores on the host machine.  It does not matter if it’s ESX host or Hyper-V.  Unlike SQL, there is a 8 core minimum per physical processor.  As with previous editions, Datacenter will allow unlimited VM’s and Standard will allow 1.  If you have more than 7 VM’s on a host machine, Datacenter edition is more economical.  With Standard edition, you have to license each physical core but it will only allow 1 VM.  If you have a second VM on that host, you must license each physical core a second time (Stack licenses to get more VM’s).  Like SQL, it is priced/sold in packs of two cores.

Other items to remember with Windows 2016:

Containers 

Container is a technology, not a license definition.  It means an isolated place where an application can run without affecting the rest of the system.  It helps eliminate application delay and density.  Stuck watching an application icon spin for eternity because of volume?  Containers might be your answer.  There are two types of containers:

Windows Server Container – shares a kernel (not popcorn) with the container host and all containers running on the host.  It’s part of the operating system, which is why both Datacenter and Standard edition allow for unlimited Windows containers.

Hyper-V Containers –  are completely isolated virtual machines.  That’s why Datacenter is the only edition to allow unlimited Hyper-V-containers.  Each Hyper-V container has its own copy of the Windows kernel and have memory assigned directly to them.  In short, you can think of a Hyper-V container as a separate VM.

Nano Server Option –  This is not a separate license model, just a deployment option.  In volume licensing, it is a software assurance benefit.  In SPLA, it is included.

Other things to note

Hyper-Threading

This is also a technology, not a licensing term.  It splits the physical core into two separate threads of power.  When hyper-threading is turned on, it creates two hardware threads for each physical core.  From a licensing perspective, you must license one core for one thread.  Since hyper-threading is for virtual cores, no need to worry about it when licensing by the physical core option only.

Fail-Over- When an end customer uses a license mobility right (transfers a license over to a third party’s dedicated VM) they can also move their failover rights that come with software assurance.  They cannot use the datacenter provider as the failover only.  In other words, they cannot install SQL with software assurance on premise and extend the fail-over to a third-party datacenter.  The end customer would have to transfer via license mobility to the datacenter provider in order for failover rights to be applicable in an outsourcer scenario.

Thanks for reading,

SPLA Man

 

 

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Top 5 SPLA Licensing Questions in March 2017

There’s March madness in college basketball and March madness in licensing.  College basketball is over, but licensing is just getting started.  In this post, I completed a list of the top 5 questions in SPLA.  Enjoy!

1.  Can we offer a customer dedicated VMs where they can have Windows-admin access? We want to offer the OS-plattform and let the customer handle applications etc themselves

No.  You can offer dedicated VMs, but unless a customer is transferring their licenses over to your datacenter, they should not have admin access.  Amazon does a good job of explaining this.  Check it out here

2.   I am looking at licensing SQL in Azure.  My question is can we run multiple     instances on a single VM or is it 1 instance per VM?  How can we reduce our consumption?

Yes. You can run multiple instances on a single VM to reduce the number of VM’s deployed.  This works with Azure, AWS, or even your own datacenter.

3.   If we have a hypervisor running 2012r2 datacenter edition. Can I install server 2016 on a VM or does the hyper visor also have to be 2016?

You can install the VM with 2016 but the entire host must be licensed by core if you do. (even if you are also running 2012) Remember with 2016, there is an 8- core minimum per physical processor and is sold in packs of 2 cores.

4. I have a production SQL server fully licenced. We will be introducing a second server that will only receive SQL transaction logs throughout the day. It’s not a hot standby, not even a warm standby.  Does it require a license?

As long as that server is passive, log shipping is allowed.  

5. We are a cloud hosting provider and find it very frustrating in regard to Office 365 and not being able to use SCA.  Any help?

There are specific requirements to become CSP Tier 1.  I will say Microsoft has made the requirements easier as it pertains to support.  If you are having difficulty becoming CSP Tier 1, it may help to look at partnering.  Let us know.  info@splalicensing.com

Thanks for reading,

SPLA Man

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

 

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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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A Fireside Chat with a Microsoft SQL Technical Specialist…What’s new and how you can profit from Microsoft SQL Enterprise

I had the opportunity to sit down with Sarah Barela, SQL Server Technical Specialist at Microsoft. She’s very passionate in her role and without question a great resource. In this interview, it’s all about SQL. More importantly, it’s about SQL for the service provider community. Although this blog is about licensing, I focused more on the features of SQL.

Special thanks to Sarah and the US Microsoft Hosting team for accommodating!

SPLA Man – Hi Sarah, thank you for spending some time with me this morning to chat about one of your favorite topics…SQL.

Sarah – My pleasure!

SPLA Man – So tell me a little bit about yourself, where did this passion for SQL start?

Sarah – (Chuckles) I started working with SQL over 17 years ago; back in the day with SQL 6.5. (I might be dating myself here) I worked for (who at the time) a service provider called Maximum ASP. Our primary focus was working with the Microsoft developer community and my role was database management. My responsibilities grew to the point I was managing over 1k databases by myself! Needless to say I became a specialists in managing larger deployments which ultimately led me to Microsoft in 2013. Now my role is to help service providers deploy new SQL Server offers.

SPLA Man – What are some cool new features of 2014 that service providers can take advantage of?

Sarah – Biggest new feature is called in memory OLTP – stands for online transactional processing. From the most basic level it allows to you to put your tables in your database into RAM memory to make it very fast.   There’s also a lot of new hybrid features to move from on premise to public cloud to make the transition easier.

SPLA Man – So I talk to service provider’s all day long. One thing that always surprises me is although they have the right to use the latest version under SPLA, for one reason or another they still are running SQL 2008 and in some cases 2005. Why would now be a good time to upgrade?

Sarah – For one thing, it’s support. Both 2005 and 2008 is in extended support. I’ve found that cloud technologies and customers want more features more rapidly. Waiting to deploy newer versions is becoming less of an option, as your customers will be out of data. There are also more features added that applications want to take advantage of including the in memory feature within SQL 2014. There’s also minimal effort in deployment, but the impact in performance could significant.

SPLA Man – There’s a lot of talk about SQL Enterprise, what type of service provider’s do you see deploying Enterprise? Is there anything special they should consider?

Sarah – I think it really boils down to database needs over a specific market profile. Think of social media companies (as an example). They may have fewer employees, but consume parabyte’s of data. By any other standard, they would be considered a small business. I think that’s the biggest thing. All service providers use Enterprise on some level but I would say those service provider’s that consume a large amount of data and have high availability requirements would be a starting point.

SPLA Man – So speaking of data, one of the features in SQL Enterprise is something called data compression. Which is available in Enterprise, but not available in Standard. What is data compression?

Sarah – So what data compression does is it’s an algorithm used to compress data as it is stored on discs. So let’s take an example of a database that stores a consumer’s address. A person’s street address is fairly unique. But city, state, and zip code are more common; (there are only 50 states as an example), so what data compression does is it finds data and shrinks it down so it does not store duplicate information. So ultimately, this reduces the amount of disc space needed; especially in very large environments. If you are spending a large amount of money on storage and you can reduce that by (whatever amount that equates) than that saves actual money on hardware. That’s why it is so important.

SPLA Man –So data compression aside…what are other areas a service provider become more profitable by switching to SQL Enterprise over Standard? As an example, are tasks better performed with 1 instance of SQL Enterprise v. several instances of SQL Standard?

Sarah – One of the things that SQL Enterprise allows you to do is it has features in there that support multi-tenancy. The more customers you can have running on a single server, you can spread that cost over more customers; which can lower your cost as well as the overall cost per individual customer. Those features like the resource governor, allows a service provider to divide up resources within the SQL server. It prevents things such as (what we call) “the noisy neighbor” in other words, one customer can’t impact the processing of another. There are also features within Enterprise that allows for isolation; so one customer has no access to another customer’s database. So it is secure. From a licensing perspective, Enterprise does allow unlimited virtualization if you license by the physical core. This allows for more consolidation (including hardware). Although the price per core is higher than Standard, when you look at spinning up multiple VM’s it becomes much more cost-effective. So it all goes back to the idea of multi-tenancy. The more customers you can run on a single physical hardware or by using virtualization, you can spread the cost of Enterprise across different customers.

SPLA Man – What about SQL BI? I rarely see this being reported. Are service providers missing something? What’s a good differentiation between SQL Standard and SQL BI?

Sarah – Service providers are hosting applications that are used by multiple people. What I have found in BI Edition (which is SQL Standard plus additional data warehousing and Business Intelligence technologies in the SQL server stack) is that often times the number of users that are using those features conflicts with the way it’s licensed. SQL BI is licensed by SAL only (not by core), and it is often more cost-effective to use Enterprise in a hosted environment. (Large amount of end users) I also think there’s familiarity with Enterprise and/or Standard, so they stick with what they know. If you have smaller environments where users are connecting to that database, than BI is a good option.

SPLA Man – A ton of service providers license SQL Web because it’s cheap. Although SQL Web is less expensive, from a licensing perspective there are some limitations. Can you elaborate?

Sarah – When I started at Microsoft, I did not know that SQL Web Edition was just for public websites. When you read it you think it could be used for any website. One trick is it has to be public website and certainly cannot be used to support a line of business applications. One thing to consider, if a website has a log in; then it’s not public.

Side Note – from the SPUR page 26. Notice it states: “support public AND Internet accessible” Not public OR Internet accessible” There’s a big difference between “and” and “or”

The software may be used only to support public and Internet accessible

Web pages

Web sites

Web applications

Web services

It may not be used to support line of business applications (e.g., Customer Relationship Management, Enterprise Resource Management and other similar applications).

SPLA Man – One service provider told me that Oracle was better, simply because it wasn’t dependent on the platform that it runs on. How would you respond to that?

Sarah – Although true, Windows is universal and is highly available as well.

SPLA Man – Are there any promotions service providers can take advantage of?

Sarah – SPLA partners may want to check with their SPLA reseller from time to time to see if there are any upcoming promotions, new products, or licensing changes.

Side Note –  although there’s not a special promotion tied to SQL at this time, service providers can always offer free trials and product demonstrations to your end customers. This is part of the SPLA agreement.

SPLA Man – Where’s a good resource for more information?

Sarah – One of the resources I used the most when I was working at a service provider was the feature matrix, which shows what features are in each edition of SQL server. This is found at www.microsoft.com/SQL you can also check out http://www.microsoft.com/en-us/server-cloud/products/sql-server/default.aspx

SPLA Man – Well I think that covers it. Thank you again for taking the time.

Sarah – No problem! Great catching up with you.

So what are your thoughts?  How do you leverage SQL in a hosted environment?  Need help with licensing? Reach out to us and let’s review your options.

Thanks for reading,

SPLA Man

 
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Posted by on November 23, 2014 in Interviews, SQL 2014

 

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Datacenter Outsourcing

I’ve written before on how partnering with an established provider can save you money, especially as a short term solution to get your hosting business started.  What I haven’t really addressed is the licensing.

Data Center Outsourcing is essentially what the name applies.  “Data Center” and “Outsourcing”; you outsource your data center. Amazing how that works.  Microsoft definition is a bit more confusing – amazing how that works too. From the outsourcing guide:

  1. “A Data Center Provider is a Service Provider that provides Software Services, usually IaaS, to another Service Provider using Products licensed from Microsoft through its own SPLA..”

Microsoft Azure is a good example of a data center outsourcing company.  When you sign up for Azure, Windows will be included in the service.  They are essentially providing the infrastructure (Windows and/or SQL cores) and you provide the application licenses via your own SPLA.  When you leverage another service provider who provides the infrastructure, they must be providing the Windows licenses. Hmmm…here’s why.

Let’s say you have a signed SPLA agreement to offer Exchange to your clients and you decide to use Brett’s Hosting to provide the infrastructure.  Brett’s Hosting offers a public cloud environment (multiple customers sharing same resources).  Under this model, you will report Exchange licenses for each user that HAS access to the software and NOT report Windows under your own SPLA; Brett’s Hosting would report Windows via their own SPLA.  Why?  If it is a shared environment, there is no way Brett’s Hosting can allocate processors for you to report it.  SQL cores works the same way.  Still don’t believe me?  Check out the FAQ guide from Azure here. Notice under SQL it states you can purchase a VM or use SAL licenses.  Notice under Windows it states Windows is included with your agreement.

Here’s the bottom line, if you decide to outsource your data center to a public cloud provider, ask them how they manage the Windows OS.  If they say it is not included in the cost of the service and you should be providing the licenses, they are out of compliant.

Want more proof?  Download the outsourcing guide here

That being said, if you provide data center outsourcing services, I think you are in the right business. This is the fastest growing area within the hosting industry.  Windows is relatively inexpensive from a licensing perspective, especially as you add more VM’s and can capitalize on the Data Center edition.  (remember…unlimited VM’s).  SQL can get a bit more complex, but if you understand it I think that could be an added value over your competition.  Last, because you report Windows and SQL only and let the service provider control the user based licensing; it limits your compliance exposure.  (processors/cores are easier to track).

So are you a data center outsource or a service provider?  Do you work with someone to resell your solution or do it alone?  Would love to learn more about your offerings. If you need guidance or best practices or just want a second opinion from a licensing perspective you can email me at blaforge@splalicensing.com.

Thanks for reading,

SPLA Man

 
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Posted by on August 7, 2014 in Data Center Outsourcing

 

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