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CSP Replaces SPLA! The CSP Hoster Program: Pros and cons.

CSP Hoster replaces SPLA. In the words of Lee Corso (College football commentator for those unaware): “Not so fast, my friend.”

I like to think of CSP-Hoster as an entity who hosts CSP Products. That’s deep. The CSP Hoster is indeed an organization that hosts CSP solutions, however, there are some things to consider. Let’s dive into the pros and cons of going the CSP Hoster route.

Pros

CSP Direct partners who are also hosters (essentially all QMTH hosters) the ability to control the entire end-end solution for their end customers. They procure (sell the CSP licenses through their CSP Direct authorization), they install using media/keys, they can help ensure compliance since end – customer licensing is becoming more and more complex, and finally they host the solution for the customer.

Increased incentives. In one example, a CSP Direct provider increased margin by 15% and increased rebates +4%. This is pretty common in the CSP Direct space. There’s no middle man like there is in the CSP Indirect program and the SPLA program (buy from a reseller who then buys it from Microsoft) with CSP Hoster you buy from Microsoft and sell to the end user.

More options especially with End of Security Updates (ESU). Eligible in CSP, it is an add on license to help extend the life line of a specific product. (Such as SQL 2012/Windows 2016, etc.)

Relaxed licensing rules. As an example, if a CSP Hoster wants to sell Windows Server through the CSP program there are no CALs required. Another cost savings for the end customer. If they use the flexible virtualization benefit, CALs are required.

Separates you from competition. Every entity (outside of Listed Provider) can be an authorized outsourcer who can leverage the Flexible Virtualization Benefit. But not every entity can be a CSP Hoster.

Cons

CSP Direct authorization. Microsoft wanted to roll this out to a small subset of customers first and that is the reason for the CSP Direct requirement. If you are not CSP Direct authorized, use the Flexible Virtualization Benefit. CSP Direct authorization is a massive undertaking, support, platform, and commitments. No thank you.

Microsoft has access. That’s right. Microsoft will know who your customers are, where they are from, and what they are buying. This is often overlooked. Especially in an audit.

Incentives are better than SPLA, but one thing consistent with Microsoft, incentives only go one direction. Down.

Summary

If you are not CSP Direct authorized, don’t worry about it. Use Flexible Virtualization and educate your customers on the different license options. That is the best way to differentiate yourself. If you are CSP Direct authorized, CSP Hoster is a good way to not only differentiate yourself but also look at different revenue streams. Take a look at my article, Azure Arc There’s just a lot of options you can take a look at.

Is Azure Arc the gateway to ending SPLA?

21 Sep

I had a dream the other night, SPLA was going away. I woke up in horror. My wife thought something dramatic happened, and in a way, it did. In my dream there were pricing discounts, incentives, metered pricing, and security updates for hosters, not one benefit was part of the SPLA program. When I woke up, I was thankful it was just a dream until I Binged (man I can’t say that) Googled around and found Azure Arc. Is SPLA gone? No. But maybe there’s opportunities hosters should consider. In this article, let’s dive into the licensing side of Azure Arc and how it may benefit SPLA providers.

I like to think of Azure Arc as a bridge between your infrastructure and Azure. Maybe it’s the “arc” in the title or I just plagiarized it from the Microsoft website. https://azure.microsoft.com/en-us/products/azure-arc#overview either way, there’s a connection because it manages IT resources in your cloud, Joe’s Hosting Cloud, or another third-party using the same tools you would use to manage Azure hosted resources. So let’s take a look at how a SPLA partner might use this technology ,where does the licensing come into play, and the benefits.

I think we can all agree SQL is one of the most expensive products at Microsoft and managing SQL Server can be just as expensive. Azure Arc allows a hoster to manage all SQL Servers deployed in the hosters datacenter from, you guessed it, Azure. A hoster is still “hosting” SQL Server but using Azure resources to manage it. From the Azure portal, a hoster can query deployment information, get detailed information on the number of cores, or maybe they want to know which editions are running and where.

Ok, we get the management piece of it. But managing doesn’t replace SPLA. That statement is correct. When Azure Arc is enabled, customers, hosters, whoever has the ability to purchase SQL using a pay as you go model through Microsoft directly or CSP such as the CSP Hoster program. Yes, pay as you go model is SPLA, but one benefit over SPLA is pay as you use. In other words, if you are looking to save costs on SQL Server for development projects or maybe there’s times in high demand and times of low demand, hosters might benefit. With SPLA, if you spin up a server on the 28th of the month, you have to report that license as if you deployed it on the 1st of the month. You also receive incentives, rebates, and the deployment of Azure Arc goes towards your Azure revenue credit. One other side note, is end of security updates are also included as an add on which is not available in SPLA. (Your end customers can purchase ESU and deploy it in a SPLA providers datacenter though).

Ok, but the biggest benefits of SPLA is unlimited virtualization rights. And that is a BIG benefit. You can’t license SQL Enterprise on the host level and deploy SQL Standard virtual machines using CSP licenses. I also think Windows Datacenter in SPLA is very profitable for service providers. In addition, just because the virtual machine is installed locally when using Azure Arc, data/information is relayed back to Azure. There could be compliance/security concerns. You don’t have that issue with SPLA.

SPLA has it’s place and so does CSP. Can’t we all just get along? Either way, Microsoft still gets paid.

Thanks for reading,

SPLA Man

Core Licensing for Windows and SQL

11 Apr

Article update (April, 2018 ) This article can be found at https://mscloudlicensing.com/2018/03/06/licensing-sql-2016-and-windows-2016/ We review best practices in reducing audit exposure, use rights and guidelines for SPLA licensing.

1 Comment

Posted by MS Licensing on April 11, 2017 in SQL 2016, Windows 2016, Windows Virtualization

Tags: container virtualization, containers, Core licensing, Datacenter Ousourcer, ESX, fail-over, hyper thread, hyper-V, License Mobility, Microsoft, nano-server, spla, SQL, SQL 2016, SQL Enterprise, Windows 2016, Windows Server

Azure Stack, SQL Stretch Database and the Hosting Summit

27 Mar

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

1 Comment

Posted by MS Licensing on March 27, 2017 in Azure, In My Opinion, SQL 2016

Tags: AWA, Azure stack, CSP, Google, google cloud, Hosting Summit, Hybrid cloud, IBM, Microsoft Hosting, Microsoft Hosting Summit, Microsoft SPLA, Microsoft SQL, MSDN, Office 365, spla, SQL, SQL Server, SQL virtualization, Stretch Database, Windows 2016, Windows Server

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

23 Nov

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

4 Comments

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

Tags: Interview, Microsoft SPLA, SQL, SQL 2014, SQL Enterprise, SQL Standard, SQL Web

Datacenter Outsourcing

07 Aug

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:

“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

1 Comment

Posted by MS Licensing on August 7, 2014 in Data Center Outsourcing

Tags: Amazon, AWS, Azure, Cloud Solution Program, CSP, Datacenter, Datacenter outsourcing, IaaS, Infrastructure, Microsoft Azure, Microsoft Cloud, Microsoft Hosting, Microsoft Licensing, Office 365, outsourcing, spla, spla licensing, SQL, WIndows, Windows Server

300 Level SPLA Licensing

02 Jun

Now it’s time to get into the fun part; the licensing scenarios that can literally drive you NUTS because if interpreted wrong, it can cost you and your company money. Based on experience, here’s a list of the top confusing scenarios….simplified.

Customer Owned Licenses

Let’s say you have a customer that would like to bring their license into your datacenter. You first ask them if the licenses are legit and if they have software assurance for those licenses. Why ask if they have software assurance (SA). If they have SA on certain software applications, they could be eligible for license mobility (shared hardware, dedicated VM). If they do not have software assurance, now you have to consider dedicating (see dedicated v shared in this post) a server and VM for that customer and that customer only. Without software assurance, they do not qualify for license mobility. So keep this in mind – no software assurance = 100% dedicated hosting.

Now let’s say the end customer owns 100 Exchange licenses (CAL) without SA and they would like you to host Exchange for them using these licenses. No problem, you just dedicate a server for those users. But what happens if they hire 50 more employees that need Exchange? Do you simply add those additional 50 users via SPLA or do they have to buy those additional 50 licenses from their volume licensing agreement? If you picked the latter, you would be correct.

You cannot mix server/CALs on a product-by-product basis. This means the end customer CAL’s for a particular product cannot be used to access servers deployed with that product and which are licensed by the service provider under SPLA. It is ok for a service provider to rely on end customer owned licenses for one particular product (like SQL) but acquire licenses for a different product (like Windows) via their SPLA as long as they dedicate the server. It also means that if an end customer has Servers/CALs for a particular product(s) and chooses to move to a hosted model with a service provider, they will need to acquire any additional licenses for that product(s) under their volume licensing agreement (i.e. if they increase the number of seats or need more servers for deployment or load balancing). It’s not ok for the service provider to acquire SAL’s under SPLA when the number of seats goes up for the end customer or when additional servers is required. This is because the licensing construct of internal use doesn’t match that of SPLA ,and therefore needs to be separate.

Dedicated v Shared

So what does “dedicated” and what is “shared mean?” In short, it means one customer per server/VM for dedicated, and multiple customers using the same server/VM for shared. But what about the other components of a hosted offering? You have a SAN, does that need to be dedicated? No, according to this document it doesn’t (download it here)

“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.”

So ask yourself “is this running Microsoft software on this device?”

SQL Virtualization

SQL virtualization boils down to five options

1) License per virtual machine (if nothing is running physical)

2) License the physical cores on the host and report SQL Enterprise. (allows you to run unlimited VMs)

3) License both physical and virtual (if reporting Standard or Web and it’s running both physically and virtually)

4) Report SQL Business Intelligence (BI) which is licensed per user and can access multiple servers (physical and virtual)

5) Report SQL Standard per user. Same story as BI.

Don’t forget about license mobility within server farms. A server farm by Microsoft’s definition consists up to two datacenter located within 4 hours of each other. So if you have a datacenter in Seattle and another datacenter in New Jersey; that does not qualify. Likewise if you are in Europe; the datacenter must be “within the European Union (EU) and/or European Free Trade Association (EFTA)

One benefit of license mobility within server farms is it will allow a qualified VM to migrate from one host to the next within the same server farm without adding additional licensing costs. You have to license the machine with the most processors or cores to be compliant. In the Service Provider Use Rights (SPUR) it shows you if the product is license mobility within server farms eligible. Pay attention to this use right; there’s a lot of service providers who are reporting license mobility without license mobility.

Hope this brings some clarity. If you have additional questions contact me at blaforge@splalicensing.com

Thanks for reading,

SPLA Man

9 Comments

Posted by MS Licensing on June 2, 2014 in Uncategorized

Tags: Dedicated server, License Mobility, licensing, Server Farms, Shared server, spla licensing, SQL, SQL virtualization

Tips & Tricks of SQL 2012

11 Jun

“What’s the least favorite licensing topic at Microsoft?” If you answered SQL, you would probably be correct. It’s not overly complex, but can be very confusing; especially as it pertains to virtualization. To add to the confusion, Microsoft changed the licensing terms with the release of SQL 2012 and discontinued several products altogether. For service providers, this confusion can escalate to over/under licensing and ultimately compliance risk. Here’s a list of common mistakes service providers make with licensing SQL.

1. They have Vmotion set up in which virtual machines are moving from host to host simultaneously. Be careful! Check out license mobility rights in the SPUR and read my previous blog license mobility Virtual Machines can move from host to host but it cannot be active on two separate hosts at the same time.

2. They have a customer bring SQL into their environment (end customer owns SQL via a separate volume licensing agreement) and the service provider dedicates the virtual machine to the customer but not the physical hardware (hardware is shared). The end customer would need to have software assurance for SQL in order to take advantage of license mobility and the service provider would need to report Windows under SPLA. This is called License Mobility with Software Assurance.

3. Sign a new SPLA agreement after December 31, 2012 and continue to license SQL by processor. Once you sign a new or renew your old SPLA agreement, you are forced to license by the core, not processor. Check out my blog Why Timing Is Everything

4. They license (1) 2 core pack of SQL 2012. The minimum you need to license/report is (2) 2 core packs or 4 cores per processor. Under no circumstance can you report only two cores.

5. They don’t report SQL at all. I hear this all the time. “My customer does not directly access SQL and therefore I do not need to report it.” Wrong. If customers indirectly access any application it must be licensed. Ask yourself, “If I remove this product from my hosted solution, would it still work the same?” If you answer “no’ it needs a SPLA license.

6. Report SQL Web to support a line of business application. SQL Web is designed for websites/web applications, not line of business applications.

Just thought I would try to answer common questions around SQL. Hope this was helpful.

Thanks for reading,

SPLA Man

3 Comments

Posted by MS Licensing on June 11, 2013 in SQL 2012

Tags: compliance, License Mobility, licensing, SQL, SQL2012, Virtualization

SPLA Licensing

Tag Archives: SQL

CSP Replaces SPLA! The CSP Hoster Program: Pros and cons.

Is Azure Arc the gateway to ending SPLA?

Core Licensing for Windows and SQL

Top 5 SPLA Licensing Questions in March 2017

Azure Stack, SQL Stretch Database and the Hosting Summit

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

300 Level SPLA Licensing

Tips & Tricks of SQL 2012

Licensing Help?

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