Tag Archives: Volume Licensing

Top 5 Compliance Trends for MSP’s and SPLA

There are so many license changes and gotchas with SPLA, Azure, AWS, and all the others that I thought I would highlight for you some of the trends we see when it comes to compliance.

  1. Licensing Office Standard when Office Professional is installed.  In many cases, an IT administrator will inadvertently install Office Pro, report Office Standard to their procurement team who in return reports it to the reseller.  The IT admin will leave the company, and the procurement team continues to report Standard not knowing Pro is installed until audit time.  In this situation, Microsoft will check when Office was installed, and take the delta of what was reported (STD) v. what should be reported (Pro).  Don’t make this mistake.  Many partners are only charging their customers for Standard pricing!
  2. Not reporting SPLA at all.  Sounds silly, but many providers focus on developing software and not on the licensing.  We have found instances in which the procurement manager (who was in charge of reporting SPLA) left the organization and no one else took over their responsibility.   The reseller continues to email the procurement manager but obviously the email goes unnoticed.  After many months, their SPLA will be terminated and all licenses will have to be trued up.  The problem with this scenario is not just unexpected licensing expense, but when your SPLA terminates, you must sign a new one.  When you sign a new SPLA, you must adhere to the latest SPUR use rights.  As an example, if you had a SPLA prior to the Windows core licensing change, you could continue to report processors.  If your SPLA terminates, you would be forced to license by core now instead of later when your previous agreement (that is now terminated) expired.
  3. Using a VL copy of Office to deploy Shared Computer Activation (SCA).   SCA is specific to Office 365.  If you install Office Pro Plus VL, it goes against the product use rights in which Office (without SCA) cannot be installed on shared hardware.  It takes a lot of negotiation power and time to prove you are SCA eligible, the customer purchased Office 365, and you inadvertently installed the wrong product.
  4. Using License Mobility without License Mobility.  This is by far the most popular compliance trend.  Many organizations do not know what is installed in their datacenter when it comes to customer owned licenses.  Be sure to have the right documentation, addendum, and licensing to ensure compliance.
  5. Leasing an application, hosting the application, and purchasing volume licensing agreement to offer software as a service.   A healthcare company may lease an EMR application, host the application to other healthcare organizations, and license the infrastructure through volume licensing.  If your organization does not own the application you are hosting, you must license it through SPLA.  Self-Hosted for ISV is only eligible for providers who develop and own the application.  This means the code, the rights, everything must be owned by the organization.  Leasing the application and using other plugins you may have developed does not qualify.

I hope this provides you a little insight into the world of compliance.  If you find yourself out of compliant, let us know and we can connect you to the right resource.

Thanks for reading,


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Posted by on July 5, 2017 in Compliance


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In most articles I reviewed best practices, updates, and licensing guidance as it pertains to the SPLA program.  As cloud solutions evolve, the licensing becomes more complex.  That’s why I thought we should take a step back and take a moment to review the basics of the program.  I am a big believer in order to fully understand a licensing program, you really should start at the beginning.  Too many times we jump headfirst and start worrying about “how do we license SQL in a virtual environment” or “why no VDI darn it!”  So let’s all take a deep breath, relax, and let’s understand what it is we are actually trying to accomplish. 

What is a license?

I think we can all make a reasonable assumption to the answer to this question.  Again, we are starting at the basics and moving up from there.  The SPLA Man definition of a license is essentially your right to use something.  You buy a book, you need to purchase the right to consume the author’s material.  You buy a software license, this gives you the right to install it and use it.  In the case of Microsoft, you did not write the code for Microsoft Exchange, so you need a license to use Exchange/email.  There’s all sort of examples of a license, but I think you get my point. 

So if you buy a license, who get’s to use it?  In most instances, it’s you.  Why buy something and give someone else the right to use it?  If you buy a computer from HP and the PC comes with a copy of Office and Windows 8, the Office and Windows 8 gives that device a license.  Those license come preinstalled live and die with the machine – this is called Original Equipment Manufacturer (OEM for those taking notes).  If you read the little booklet that comes with your computer it will define this not so clearly.  That booklet is called a EULA (End user licensing agreement). 

Volume Licensing

Now let’s say you’re an owner of a company and have 50 employees.  You set up a CRM server to deploy to your 50 employees.  In this model, they would need a server (CRM Server License) plus 50 client access license to access that server.  Since it’s for internal employees, you would use volume licensing.  (greater discount than going to a retail shop and purchasing the licenses one at a time)


Let’s say you lost the instruction booklet on ‘how to deploy CRM” and frustrated because you already purchased the licenses.  You need help.  Not only did you lose the instructional booklet you don’t have the budget to purchase the hardware to run CRM nor the bandwidth to manage anymore.  You look at third party options.  You call Brett’s Hosting who can deploy CRM on your behalf while leveraging your license purchases.  If you purchased the licenses with software assurance those licenses could potentially qualify for license mobility (CRM does).  The service provider can dedicate a VM for CRM and host the VM on shared hardware. Windows would still need to be reported under SPLA (since Windows is not part of license mobility) This can be more cost effective for both parties.  If you did not purchase those licenses with software assurance, you can still bring those licenses into your datacenter BUT Brett’s Hosting would have to dedicate the hardware and the VM to one customer.  What’s dedicated?  Microsoft defines dedicated as “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.” (source: Microsoft Desktop Virtualization Guide – Check it out here)

Service Provider Licensing Agreement (SPLA)

This leads to the last option and the entire point of this blog – SPLA.  Why would a service provider use or need SPLA licenses?  You know those 50 CRM licenses you purchased for your internal employees?  You guessed it, those can only be used for internal employees.  Why?  There’s a little blurb in the Product Use Rights (PUR) that states “No Commercial Hosting” If you have a customer that does not own the licenses, but they want to access your server – That’s SPLA.  Anytime your hosting Microsoft software on BEHALF of a third party, that’s SPLA.  Let’s say you have a website in which you sell products out to the entire world;  Would you need SPLA?  Short answer…no.  Why?  You have a website that you deploy in your own datacenter that you use to run your business, not someone else’s.  If you went to a third party and asked them to host a website for you that will allow your customers to access, the service provider would use SPLA.  Clear as mud?  Exchange might be a better example.  If you don’t have the bandwidth to manage Exchange in house anymore, you can go to companies such as Rackspace to provide email for you.  They will charge you “X” amount of dollars for email per month.  To access Rackspace’s Exchange server you would need a license.  That license is called SPLA.  All service providers that host Exchange, would require SPLA (unless you bring your own licenses such as the outsourcing example above).

That’s licensing 101 in a nutshell. Stay tuned for licensing 200.  Ugh.







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Posted by on May 19, 2014 in Uncategorized


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Disaster Recovery Rights for SPLA

Spring.  The time of year in which flowers bloom but storms loom. (I will not quit my day job by the way).  Those reading this article that live in the middle of the United States, you would probably agree with that statement.  Sometimes it may take a storm for organizations to start thinking about their own disaster recovery plans.  Maybe it’s time to get ahead of the storm; that’s why I thought I would spend time reviewing DR, industry best practices, and licensing scenarios.

In previous editions of the SPUR, you were allowed to temporarily run a backup instance on a server dedicated for DR with the following exceptions:  The server must be turned off except for limited testing and DR, may not be in the same cluster, and you may only run the backup instances and production instances at the same time only while recovering from a disaster.

I never understood the rule “the server must be turned off.”  If it’s turned off, how is backing up anything?  Secondly, what is meant by “limited testing?” How much time does it allow you test? Two days…a week…a month?

In the new SPUR, it brings clarity to some of those questions.  From the April SPUR:

“The disaster recovery server can run only during the following exception periods:

  • For brief periods of disaster recovery testing within one week every 90 days
  • During a disaster, while the production server being recovered is down
  • Around the time of a disaster, for a brief period, to assist in the transfer between the primary production server and the disaster recovery server

In order to use the software under disaster recovery rights, you must comply with the following terms:

  • The disaster recovery server must not be running at any other times except as above.
  • The disaster recovery server may not be in the same cluster as the production server.
  • Windows Server licenses are not required for the disaster recovery server if the following conditions are met:
  • The Hyper-V role within Windows Server is used to replicate virtual OSEs from the production server at a primary site to a disaster recovery server.
  • The disaster recovery server may be used only to
  • run hardware virtualization software, such as Hyper-V,
  • provide hardware virtualization services,
  • run software agents to manage the hardware virtualization software,
  • serve as a destination for replication,
  • receive replicated virtual OSEs, test failover, and
  • Await failover of the virtual OSEs.
  • run disaster recovery workloads as described above
  • The disaster recovery server may not be used as a production server.
  • Use of the software on the disaster recovery server should comply with the license terms for the software.
  • Once the disaster recovery process is complete and the production server is recovered, the disaster recovery server must not be running at any other times except those times allowed here.”

If I had a hosting company that specializes in DR solutions, I would have my customers purchase their licenses outright with Software Assurance from their reseller (like SoftwareONE).  I would make sure they deploy it on premise and I would set up a secondary server in my datacenter. Now comes the fun part – how to license the solution!

Let me provide an example.   Let’s say your customer is a law firm and email is extremely important to their business.  They cannot lose email for one minute, let a lone a day.    The customer would like the greatest discount long term but very concerned that if a disaster does happen, they won’t be prepared.  (this is when you come to the rescue).  You have a solution that will allow them to run their Exchange on premise by purchasing Exchange with Software Assurance from volume licensing (greater discount over SPLA long term), and you as the service provider can run Exchange in your datacenter using the SAL for SA SKU.  Never heard of the SAL for SA SKU?  You’re not alone.  This SKU is available for certain applications (Lync, SharePoint, Exchange – check SPUR for availability) and allows the service provider to host the application in a shared (virtual & physical) environment.  More importantly, the cost is extremely attractive AND your customer can still run it on premise.  This is NOT license mobility.  License mobility allows you to run it in a shared hardware but dedicated VM.  It also requires the customer to transfer those licenses out of your datacenter only (not on premise).

Here’s the criteria for reporting SAL for SA for those home gamers.

SALs for SA

“SALs for SA may be acquired and assigned to users who have also been assigned a qualifying Client Access License (“CAL”) with active Software Assurance (“SA”) acquired under a Microsoft Volume Licensing Program or who uses a device to which a qualifying Device CAL with active Software Assurance coverage has been assigned. You may not acquire SALs for SA for more than one user for any given qualifying CAL. Use rights for SALs for SA are identical to their corresponding SALs, as defined in this document. The right to assign a SAL for SA to a user or device expires when the Software Assurance coverage for the qualifying CAL expires.”

Be careful if you decide to go down this route. You have to ensure when reporting SAL for SA that the customer has active SA for the licenses you are reporting.  If they don’t, both you and your customer are out of compliant.  This comes up all the time during audits.  “I swear they own these licenses Mr. Auditor!”  Secondly, make sure the products are SAL for SA eligible when discussing with your client.

In summary, pay attention to the new DR rights mentioned above; consider SAL for SA as an alternative; and last but certainly not least, maybe reconsider your vacation to the Midwest until the Fall – flowers bloom, storms loom.  Hit me up at  if you want to learn more about SAL for SA or anything hosting related.

Thanks for reading,



Posted by on April 30, 2014 in Disaster Recovery


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