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“I want VDI!!!!!”

You probably have said that a thousand times as a service provider.  The truth is it’s still not available in SPLA.  If I was a betting man (big if by the way for those that work for the IRS) I would wager they would allow VDI in SPLA.   Why not…right?  Everything else is changing why not this?  Before you get too carried away as to why Microsoft will not allow VDI in shared environments, let me ask…do you REALLY want VDI?  Just as SQL is complex in SPLA (and VL for that matter) so is VDI.  In this article I will review the licensing rules with VDI/VDA and what exactly needs to happen if you were to host this from your datacenter.

Let’s take scenario 1.  Bill has a PC that can run a qualified operating system but the PC itself has been running slow recently.  He get’s his email from Joe’s Hosting so logically he asked good ole’ Joe if he could host a virtual desktop as well.  Joe tells him  “Sure” but it MUST be dedicated and his cost will go up.  Bill tells him that’s not issue, his wife won the lottery recently.  You would think the last thing Bill would be worried about is a virtual desktop.  Just buy a new computer Billy and head to the beach!  Nonetheless, Bill wants VDI and wants it now.  Joe’s Hosting tells him to go to the store, buy a Windows 10 license, and bring that disc over to their datacenter.  Joe will host it on a server solely dedicated to Bill.  Problem solved.  Joe is happy he just won over a customer, Bill is happy he gets his virtual desktop.  The compliance police call, Joe is in trouble.  Why?

In order to host VDI 3 things must happen.

  1. The PC must have VDI use rights. This means the desktop license itself (Windows 10 as an example) must be Enterprise and have active Software Assurance (SA).  Think of VDI as a Software Assurance benefit.  Without SA, no chance of having VDI.  In order to buy Software Assurance, I would need a volume licensing agreement; not a retail version.
  2. The service provider must indeed host it in a dedicated infrastructure.  This means the hardware, not just the VM.
  3. If the PC is incapable of running a full version of Windows 10 (such as a tablet) the customer must purchase a VDA license.  VDA is a use right that allows the end user the right to access a virtual desktop from a server environment.

The 3 items mentioned above is really just the beginning of the licensing roller coaster.  You must also license Windows Server, RDS, and any other applications by your SPLA or be purchased by your end customer.  If they are purchased by the end customer, they would transfer that license into your datacenter, which means they can no longer run it on premise.

Now I ask you this question – is VDI worth it?  Some say “yes” as this is what the customer wants and mean old Microsoft licensing rules just keep getting in the way.  Most complain about dedicated environments, but as mentioned earlier, dedicated environments is just the beginning.  Last, you may say the licensing of the VDI environment is not your problem, it’s your customers.  You have it hosted in a dedicated environment.  As far as SPLA is concerned, you are covered.  Or are you?

Maybe I’ve been doing this too long and I am just an old fogey.  But if I was a customer and my service provider (you) told me I could receive my VDI dedicated infrastructure and all I need was a desktop OS license, I would be all in.  Fast forward a couple years and you tell me you are going through an audit and apparently I (not you) had licensed VDI incorrectly and it’s my fault; I think I would be a little upset.  Yeah I would ditch you faster than that girl in 9th grade who ditched me at the dance (apparently when I told her my future involved SPLA licensing it turned her off…what a fool) but I would also make sure if any other organizations were looking at you as a service provider, I would tell them to stay away.  As any marketing organization would tell you, recommendations and word of mouth is the best way to advertise.

Moral of this story?  Like all the rest, know the licensing first, sell it second.  Stay tuned for scenario 2.  Your customers will thank you.

Thanks for reading,

SPLA Man

 

 
6 Comments

Posted by on February 1, 2016 in VDI

 

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SPLA Audit start to finish

Your business is doing great, your sellers and customers are happy, you are making money instead of spending money, when out of the blue….BAM…you receive an audit letter.  Sound familiar?

So what do you do?  Your first reaction is panic.  Your second reaction is to call a lawyer.  Your third reaction is to blame your reseller.  I think that about sums it up.  If you disagree, I’m not 100% sure you are being truthful with yourself.  If you do agree, I also think you are making a HUGE mistake.  Sounds a little odd doesn’t it?

First thing you need to understand is it’s not your fault.  It’s not as if you are purposely trying to be out of compliant.  Microsoft knows this as well.  SPLA is a difficult program and very hard to understand. As I pointed out in the “About” section of this blog, there is little information written about the SPLA program leaving service providers vulnerable.  The SPUR?  Forget about it. That’s why I created this blog in the first place.

I think that is why SPLA customers call a lawyer to help guide them.  This may help you sleep at night, but is it REALLY helping?  I will let you determine that after the dust settles.

What does happen during an audit? I don’t care if this is the first step or fourth step but at some point you will have to collect data.  Data that PROVES the reason you reported the way you did.  One of the biggest mistakes a SPLA provider can make is not reporting indirect access.  Again, not your fault.  Who has any idea of what “indirect” really means?  Think of indirect as Microsoft software that is used to run your other applications that you market to your customers.  You have an application that you developed that reports back to SQL using Excel.  Users have no idea they are using SQL, all they know is the application they use.  But since SQL is part of your hosted solution…it must be reported.  Make sense?  That’s also why Windows will always need to be reported.  Try running Exchange without a Windows OS.  Not going to happen.

Data can also mean the licenses that your customers own that they bring over to your environment.  How do you know who owns what?  Are there enough CAL’s?  One of the arguments service providers make is they can go after their customers if being audited.  There’s an easy conversation right?  Remember, you want to keep customers not lose them.

Some service providers have learned that their end customers install software on VM’s without informing them.  How do you know what is actually being installed?  So take a look at your datacenter; are your customers installing software you don’t know about?  Collecting this information after the fact is a difficult process.  This leaves auditors with no choice but to make a best guess.  Best guesses can cost you significantly.

So after all this data is analyzed by the audit team, it is then delivered to Microsoft.  That’s when you present your case.  They will take things into consideration, but understand that if you are missing information, it makes your argument that much more difficult.  Don’t blame your reseller, that doesn’t work.  Don’t rely on a lawyer, that doesn’t always work either.  Educate yourself.  That’s the best advice I can provide.  Just by taking the time to read this I think you are on the right path.

Happy to walk you through the process in greater detail.  I am one of the few that actually gets it. My email is at the top righthand side of this page.

Thanks,

SPLA Man

 

 
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Posted by on September 18, 2014 in Compliance

 

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Predicting the future…

Not an easy task.  When my kindergartener teacher asked “what do you want to be when you grow up?” I can promise you SPLA was not part of my vision.  (I should’ve worked harder to be a firefighter)

This post is 100% opinion based and would love the opportunity to hear/read yours. So here’s my take on SPLA and what’s next for the hosting industry.

Who will win the Amazon/Azure War? 

Contrary to popular opinion, I think Microsoft has already won this battle.  The reason might surprise you too as it has nothing to do with the service offerings or pricing; it has everything to do with who controls the licensing. I think we can all agree that Microsoft can make up their own rules to their own software.  What happens if Amazon spins up a Windows VM in their datacenter?  Amazon has to report it via SPLA.  Who ultimately get’s the SPLA revenue?  Microsoft.  What happens if Microsoft decides to offer fully hosted Windows 8 desktops using Azure or Office 365 but NOT authorize if for other service providers?  Yikes!!!  What happens if Microsoft authorizes MSDN mobility rights but not offer it for other service providers?  Oops…already happened.  What happens if they allow Office to be installed on 5 devices?  Oh man.

Will SPLA be replaced?

No.  Too  much revenue being generated for SPLA to just disappear.  SPLA produces recurring revenue for both Microsoft and the partner community.  Secondly, using SPLA does not mean that volume licensing is going away; Microsoft get’s the best of both worlds.  I do foresee volume licensing changing more rapidly than it already has.  I think that’s a good thing too.

Will VDI be allowed under SPLA in the foreseeable future?

No way.  This will never happen in my opinion. Let’s throw in the towel on this one.

Will the cloud industry expand or contract over the next decade?

Expand.  I think organizations will not only have hybrid/cloud environments but multi-cloud environments. As an example, I have multiple software vendors (such as Adobe for PDF’s, Symantec for Security, Microsoft for Office, etc) I believe organizations will use several vendors in “cloud” paving way for those service providers that have specialization and unique offerings to gain market share.  Yeah, they might not be the next Amazon, but they will be critical to the next phase of cloud. Specialization = Profitability.

Are all service providers going to be audited?

Yes.

Do I need to have a SAM practice?

Not if you don’t believe me in the previous question. Just don’t cry and say I didn’t warn you!

What will be the biggest driver to the cloud?

On premise compliance audits.  Once they get audited, they would rather have someone else worry about it; that someone else is you.

Will License Mobility be allowed for Windows?

No.  I don’t think there is a reason why it would.  Windows is cheap.  For those that have hosted for a while, remember the Windows Outsourcer/Non Outsourcer SKU’s?  Datacenter was over $200 a processor.  Standard was over $75 (US).

Will Microsoft raise rates?

Yes.

Will my hosting business succeed since I can’t compete against larger providers?

Yes.  You  need to change the way you promote your offering.  Think about this (and be honest with yourself) – what separates you from your competition?  If you were a customer looking for a hosted solution…why would “they”… choose “you”?  How can YOU… help ME (customer).  Is it to keep compliance?  Is it costs? Do your employees bring you new ideas or are they collecting pay checks?  Do you worry about being the lowest price or quality/uniqueness of your service?   Is it because you have an “in” and listen to SPLA Man?  If it’s the latter, you will win for sure.

Who’s the biggest threat to cloud providers present/future?

Governments

Will VDI be allowed under SPLA?

NOOOOO!!!!!  You asked this twice!  Come on! 🙂

Who will win the World Series in baseball?

Why…the St. Louis Cardinals of course!

Who will NOT win the Super Bowl this year?

St. Louis Rams – Ugh.

Thanks for reading,

SPLA Man

 

 

 

 

 

 

 

 
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Posted by on September 8, 2014 in In My Opinion

 

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Hybrid, Dedicated, and Shared Scenarios…

There are three deployment options for service providers – Hybrid (mix of on premise and cloud) Dedicated, and Shared.  In this article, we will break each one down to explain how they work and the options available.

Dedicated Scenario – (3 options available)

Option 1
Your customer decides to bring their own software (such as Exchange) and infrastructure (Windows) via their own volume licensing agreement. They do not have software assurance on the software. Can they do this?

Yes. Why? Everything is dedicated. Server, virtual machine all dedicated to one single organization. Software Assurance is NOT required.

Option 2
Your customer decides to bring the software but the hoster will provide the infrastructure in a dedicated environment. Again, customer does not need Software Assurance if it’s a dedicated environment. In this scenario, the hoster (you) will provide the Windows license via SPLA and not report the other applications the customer brings over since it is already covered via their own volume licensing agreement. This is applicable, it’s dedicated (VM and physical servers)

Option 3
Your customer is a healthcare company that needs a dedicated environment due to regulatory compliance. They do not own any software; they would need the hoster to supply the software licenses. Can they (the hoster) do this? Yes, the hoster would report everything under SPLA. The hoster (you) CANNOT use your own volume licensing agreement to provide the solution but you can certainly provide SPLA. Please be aware that if you own a volume licensing agreement, you cannot use the same hardware your volume licensing agreement resides as your hosted solution.

Also keep in mind that SPLA is non perpetual, when the customer leaves, they can no longer use the software they were accessing.

Summary of Dedicated –
Dedicated is applicable for both SPLA and end customer owned volume licensing. Dedicated also means dedicated hardware and dedicated VM’s. In dedicated environments, the end customer DOES NOT need software assurance. From a compliance perspective, it is defined as the following:

“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; since, a server or SAN device that runs Microsoft software may only be used by one customer.” (source: Microsoft VDA FAQ)

Hybrid Scenarios – 3 options available

Option 1
You decide to offer your customer a shared infrastructure but they want the same applications to run on premise. A good option would be to have the customer purchase the server applications (think Exchange, SharePoint, Lync) with software assurance (SA) and run them on premise. You (the service provider) would run the same applications in your shared environment BUT report the SAL for SA SKU. Much cheaper option than standard SPLA prices. I wrote about this here This also works well for Disaster Recovery options.

Option 2 (not really a hybrid but just go with it)
You can use license mobility. Microsoft likes to define this as a “hybrid option” but to me, hybrid insinuates the ability to run on premise and in your cloud. License mobility is a SA benefit for certain applications (SQL, CRM, SharePoint, Exchange, Lync) that allows customers to leverage their investment in SA and transfer those licenses into a hosters shared infrastructure. Reason why I don’t think this is truly a hybrid is the customer is TRANSFERRING licenses into your datacenter. This means that if a customer wants to move back to their own datacenter, they have to wait 90 days. (transfer license rule). With SAL for SA, nothing is being transferred. Windows does not have mobility rights, this will need to be reported under your own SPLA. I wrote about license mobility many times – here’s an article for your review – here You can also check out the Microsoft site for more of a definitive definition http://www.microsoft.com/licensing/software-assurance/license-mobility.aspx

Option 3
Good Ole’ SPLA. Customer can run their own servers on premise, you just report SPLA licensing in your shared environment. The new SPLA agreement even allows you to run SPLA software on customer owned hardware as long as you still manage it.

Shared Scenarios – 2 options

Option 1
License Mobility – see above

Option 2
SPLA. We all know what that is.

Summary

I hope this brings a bit more clarity. Sorry if some things are redundant but at the same time, some things are simply worth repeating. Here’s the takeaway – customer’s can always bring licenses into your datacenter. There is no law of the land that prohibits this. What is prohibited is the way you deploy the technology. There is only one option to install customer owned licenses in a shared environment and that is license mobility. Again, (here I go being repetitive) if Microsoft allowed customer owned licenses to be installed in shared environments than why would they create license mobility?

If you still have trouble comprehending all this, shoot me an email located at the top right of this page. One general rule of thumb – if it’s shared – 90% of the time SPLA is required.

Thanks for reading

SPLA Man

 
15 Comments

Posted by on August 27, 2014 in Compliance, License Mobility

 

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License Mobility With Software Assurance – the facts

Here’s another post on license mobility.  I am not purposely trying to be redundant, but majority of compliance issues come from customer owned licenses.  It’s important that you, your sellers, and more importantly your customers understand this program in its entirety. So here we go!

License Mobility, in its simplest terms, is a software assurance benefit that allows customers to migrate their existing licenses to a third-party data center.  Third party data center is a service provider.  (Amazon, Azure, Joe’s Hosting, etc).  Primarily this applies to application servers – Lync, Exchange, SharePoint, and CRM.  It also will include products such as System Center, SQL, and Remote Desktop Services.  I encourage you to check out the Microsoft website http://www.microsoft.com/licensing/software-assurance/license-mobility.aspx for more information.  Since this website is dedicated to the service provider community, I thought I would put together some common mistakes service providers make when deploying license mobility.  Fasten your seat belt, there might be a few surprises in this list.

Fact #1

License Mobility is an addendum to your SPLA.  This is NOT automatically granted.  If your company is not on this list, make sure you sign the addendum!  Download the list here  At a hosting summit several years ago, Microsoft announced this program to a room full of service providers.  You should have seen the look on everyone’s face as they made the announcement; almost hear the thoughts running through their minds “Wait a minute, this wasn’t legal before this announcement!!, We were doing this for years!”  That’s right, if you are hosting customer owned licenses in a shared hardware infrastructure/dedicated VM, make sure the products are license mobility eligible (see the SPUR) and make sure you sign the addendum!  I said this before, if Microsoft allowed all products to be installed on a shared hardware infrastructure, why would they have license mobility?  If you have customers that are bringing licenses into your data center and are not mobility eligible, make sure it’s dedicated.  (VM and hardware)

Fact #2

You need to make sure your end customer submits the verification form.  Why?  It’s a requirement by Microsoft.   Essentially there are three times your end customer should complete and submit a License Verification form:  (This is from the verification form guide).

1. “When you deploy eligible licenses with an Authorized Mobility Partner. A new form is required each time you deploy additional licenses.”

2.” When you renew your Software Assurance.”

3.” When you renew your Volume Licensing Agreement.”

“The form can include multiple enrollments or license numbers under a single agreement, provided that they are supported by the same channel partner. However, you should complete a License Verification form for each agreement under which you are using License Mobility (for example, an Enterprise Agreement and a Select Plus agreement).”

How many verification’s forms have been completed?  Very few if any.  Since this is not completed, you (the service provider) can be on the hook.  If anything else, please make sure you make this mobility guide available to your customer to review.  Check it out here

Fact #3

When end customer use license mobility, they are transferring the licenses into your data center.  When you transfer licenses, they can only transfer the licenses away from your data center once every 90 days.  Good news – you keep the customer for a minimum of 90 days!  So let’s say they decide to go back to their own data center; same story – once every 90 days.  From the License Mobility FAQ Guide.

“Customers must assign licenses for a minimum of 90 days, after which they may move their licensed software from a service provider’s shared servers back to their local servers or to another service provider’s shared servers.  Instances run under a particular license must be run in a single server farm and can be moved to another server farm, but not on a short-term basis (90 days or less). A server farm includes up to two data centers each physically located either in a time zone that is within four hours of the local time zone of the other [Coordinated Universal Time (UTC) and not Daylight Savings Time (DST)], and/or within the European Union (EU) and/or European Free Trade Association (EFTA).”

Fact #4

You need to include educational materials to your customers during the purchasing process.  I did not make this up, it’s part of the addendum you need to sign to take part in the program.  Azure does this via their website http://azure.microsoft.com/en-us/pricing/license-mobility.  Amazon does this as well http://aws.amazon.com/windows/mslicensemobility/ Very few on the partner list makes this readily available on their website.  In fact, out of 10 random selected partners on the list, none have a written statement on mobility.  Perhaps you make this as part of your agreement with your customer; but not sure why you wouldn’t make this as part of your marketing strategy.  If you look up “authorized mobility partners” why wouldn’t you want them directed to your site? To prove my point  I looked up “authorized mobility partners” and only a handful of actual hosters show up in the top searches.  Make it your company.

Fact #5

I’ll make this one short; Windows does not have mobility rights.  You need to report Windows server via SPLA.

I know I am beating a dead horse with license mobility.  I just feel this is a big miss by providers and customers.  The bigger miss is SAL for SA  – check out my old post here

I hope you find these articles helpful.  Have any concerns, questions, or just want a second opinion – feel free to email me at blaforge@splalicensing.com

 

 

 
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Posted by on June 24, 2014 in License Mobility

 

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Office needs mobility rights

The number one post on splalicensing.com is “Office 365 under SPLA”  To date over 20,000 users have read it, several have commented on it, and many more are still asking – what am I missing and why can’t I offer “SPLA Office” in the same fashion as Office 365?

Microsoft recently announced mobility rights for Remote Desktop Services  (RDS).  I wrote about it here I think that’s a great move by Microsoft as it provides more flexibility for both service providers and consumers.  In my opinion, we need Office mobility rights, and we needed it yesterday.

Think about your environment and the licensing restrictions around Office.  To legally deploy Office for a customer that has Office 365, you as a service provider would need to have your customer purchase 1 volume licensing copy of Office, install it on your server, and for each user for Office 365, they must allocate one of the five licenses (Office 365 allows 5 installations of Office on 5 devices per user) to access Office remotely.  The Office bits on Office 365 has issues with installing it on server. Thus, the reason for a volume license copy of Office.  (at least that’s my experience in the past, maybe that’s changed now) Doesn’t sound too bad.  Five devices is a lot anyways, and now with RDS mobility rights, the service provider can use the end customers RDS licenses (if they have software assurance).  YES!!!!

Ahh…but what about Office?  Does Office have mobility rights? The answer is….no.  Although the service provider can have customer RDS mobility rights, since Office is installed, the entire environment has to be dedicated.  Yes, that includes the hardware and the VM.  That’s the issue I struggle with and I am sure many of you do too.  Why offer RDS mobility rights but not Office?  This would solve some of the issues between Office 365 and the service provider community.  Office is expensive for SPLA’s, let’s allow end customers to leverage their existing volume licensing agreements to purchase it and allow service providers to host it in a shared hardware/ dedicated VM using mobility rights? Think of how many users would purchase Office under Office 365 if they did this?  Or if they didn’t purchase Office 365, they would at least need to purchase Office with Software Assurance.  Think of how many service providers would push volume licensing on behalf of Microsoft and the resellers if they allowed this? Either way Microsoft, service providers, and more importantly the end customer would win.

Thanks for reading,

SPLA Man

 
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Posted by on December 13, 2013 in License Mobility, Office 365

 

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The Cloud Platform Suite (CPS)

The Cloud Platform Suite (CPS in Microsoft language) is a new SKU coming January, 2014 and will be in the next release of the SPUR.   (there’s a lot of acronyms in this post). CPS is a bit out of the norm for SPLA;  the licensing is by processor and by guest instance.  CPS combines Windows Server 2012 and System Center 2012 in one SKU (similar to the Core Infrastructure SKU (CIS)).  To add to the complexity, the core infrastructure suite is not going away. I wrote an overview recently that provides great details in licensing Windows, CIS, and CPS at “Licensing in a virtual world”

On the surface, CIS and CPS appear to be the same SKU, but there are significant differences.  To reiterate, the Core Infrastructure Suite is licensed by processor on the host and will allow you to run virtual instances depending on the SKU in which you report – Datacenter= unlimited VM’s/Standard= 1 VM.  CPS is licensed by processor on the host and by virtual instance.   CPS will allow the VM to move to different hosts, as long as the underlying host is licensed and you report the highest number of VMs.  The other caveat – you must RUN Windows 2012, System Center 2012 and HYPER V.  If you are not running Hyper V, you cannot license CPS.

Why would you report one over the other?  It really boils down to the number of VM’s deployed.  You need to calculate the total cost of the solution (both the number of hosts and VM’s), and whether or not you decide to install 2012.  If not, you cannot license CPS.

In my opinion, if you are virtualized, but not highly virtualized, CPS is your answer.  If you have high number of VMs, stick with Datacenter.  Remember, under CPS you have to license each guest separately.  (except if it’s Linux, no “guest” fee is charged for Linux VMs running on the Cloud Platform Suite “host”).  The cost is not astronomical per VM, but if you run 100’s of VMs, the cost can add up quickly.

Clear as mud?  Probably. It’s Microsoft licensing.  That being said, I think this is a good SKU for smaller environments and provides more options for service providers.  In Microsoft eyes, this SKU will encourage their customers and partners to deploy 2012R2.

Hope this helps and thanks for reading. There will be more insight on this as we get closer to January.  Stay tuned!

SPLA Man

 
5 Comments

Posted by on November 1, 2013 in Cloud Platform Suite

 

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