Is it Even Possible To be Compliant in the SPLA Program?

I had a call with a prospective client recently.  On the call he says “It’s IMPOSSIBLE to be compliant with SPLA reporting.  Microsoft makes it too complicated.  And their tools don’t work.”

I would say until recently, this may have been a fairly true statement.  SPLA reporting is indeed complicated, and the recommended MAP toolkit doesn’t always provide the data needed, and it only takes a point-in-time snapshot of environments.

Today’s IT environments are extremely dynamic, with new workloads being spun up and down at a moment’s notice. Partners are expected to understand the language of the SPUR (Services Provider Use Rights that dictate how to license in SPLA) and make their own interpretations and apply them to an infinite number of use cases.  Have a look - the SPUR is a long and complicated legal document.  All of this certainly makes managing the monthly reporting complex and cumbersome.

Our experience shows that many partners even intentionally over-report to avoid an unbudgeted SPLA license bill resulting from an audit. While they think that allows them to sleep easier tonight, the unfortunate part is they are choosing to pay a premium and sacrificing profits.

But the over-cautious, risk-averse partner still gets nailed with an audit true-up because they often are over-reporting in one area and under-reporting in another. Microsoft then pursues the under-reporting license gap retroactively back as much as five years in their favor only, and they are able to brush away the over payments because of their limited return policy.

In a recent real-life example, a Partner shared with us their audit report that showed relatively small under-reporting but more than $450K in over-reporting. That’s a lot of profit never realized at the expense of attempting to be compliant.

So back to the million-dollar question: How do you ensure compliance and not sacrifice profits?

Here’s the answer. You must have:

1.      SPLA license expertise

2.      The right tools and processes

3.      Monthly review of both software and hardware deployments and configurations

But reality is SPLA Partners don’t -- and really shouldn’t -- have these capabilities in-house. These functions should be outsourced because the knowledge, time, and budget required to be proficient in each will gobble up the already-slim margins SPLA partners are forced to work under.

By outsourcing your SPLA reporting life cycle, Service Providers experience immediate savings in time and money and still achieve that peace of mind – the elimination of the risk of catastrophic audit findings.

With its more than 30 years of SPLA license and audit experience, Altaris Cloud automates the inventorying of your environments, interprets the data, and optimizes your reporting every single month.  We also build the audit trail Microsoft auditors require, meaning the audit can be completed in a matter of days vs. months or years!

So the prospective client turned into an Altaris client, and we changed his mind in short order that there is a way to be compliant in SPLA, so that you don’t under-report and you don’t over-pay.

Let us show you how it can be done!  Schedule your free 30-minute evaluation to see how.

As Always,

BE SPLAWESOME!

Microsoft tightening its grip on SPLA Partners

It’s official: Microsoft is hiking up the prices of SPLA licensing by 10% for software you can’t do without. As we noted last week, your SPLA Reseller is likely to add a margin on top of that.  You can read more on that here:  http://bit.ly/2wY8TP3

Let’s give you the rundown of how much more you’re going to be charged—at a minimum-for your licenses.

10%

That’s how much more you’ll be paying for most infrastructure SPLA licenses.  Merry Christmas!

Following are the products that will experience the 10% price increase:

• Windows Remote Desktop Services SAL

• Windows Server Standard (Processor license)

• Windows Server Datacenter (Processor license)

• SQL Server Standard Core

• SQL Server Enterprise Core

• SQL Server Web

• SQL Server Standard SAL

You will “get a break” on the Core Infrastructure Server Suite. It’s just a 5% hike for the Standard processor license and 7% for the Datacenter processor license.

This year, prices stay the same for Windows Server Standard and Datacenter Core licenses, but they’ll go up by 10% in 2019. Likewise, for Core Infrastructure Server Suite Core licenses, no hikes this year but a 7% hike for Datacenter Core and 5% for Standard Core will go into effect in 2019.

Oh, and as long as we’re looking ahead, be ready for a whopping 15% hike in 2019 when it comes to Windows Remote Desktop Services SAL.  That is a 26.5% price increase over the next two years! Sneaky right?  10% on current price then another 15% on new 2018 price.

Here was a customer reaction to the news that we felt really captured the sentiment:

"Holy S*#&...not surprised, but S*#&!!"

Isn’t it nice that Microsoft gives you an entire 3 months for 2018 increases and 15 months to brace yourself for 2019 increases?  And they still have the ability to increase prices on other products in 2019.  You’ve got plenty of time consider and maybe even implement what Microsoft wants you to do: move some of your servers to Azure. What are your other choices?

If your choice is stay on SPLA or consider a public cloud move, we’ve got you covered.

Listen, you know that most your competitors are going to do the easy thing and just pass on the costs to their customers. Fortunately, there’s a way you can beat your competition by reducing your own licensing costs for Microsoft SPLA.

Get the best auditing and analysis solution out there, and optimize your licensing. Every month your staff has to figure out the SPLA licensing for Microsoft, but do you really know your usage? Where can you optimize your infrastructure and user environments, so you provide the scalability and resilience to your customers, without wasting extra licenses?

We’re here to help.  Altaris has been helping cloud service providers like you with the absolute best discovery, optimization, and audit solutions for SPLA licensing. We can find that extra 5%, 10%, or more reductions in SPLA licensing spend so you can beat the competition.

This year, wouldn’t you like to be the Service Provider that announces they aren’t going to raise prices? Schedule your free 30-minute evaluation to see how.

As Always,

BE SPLAWESOME!

Beware of the Invisible Price Hike

January is right around the corner.  In SPLA that means one thing.  Price increases.  Microsoft is aggressively pushing hosters to Azure.  As much as they’d like to make your IT decisions for you, they can’t. So, they’re going to apply pressure where they can: your monthly SPLA costs. The idea is to make it financially worthwhile to run on Microsoft Azure rather than other cloud providers, including your own data centers.

This is how it’s playing out:

• You purchase your SPLA licenses from your Reseller.
  

• US Resellers historically have passed through the Microsoft price list and received a percentage (rebate) on the sale. This rebate used to be good business.
  

• In the past year, Microsoft has eliminated rebates for products reported by you for most application products like Exchange, Office, SharePoint, etc. Microsoft has also eliminated rebates all together for certain Hosters who report to their Reseller.
  

• Resellers are now making less money for performing the same business.
  

• So, you have Microsoft getting aggressive with Azure, and you have SPLA Resellers making less profit for reselling you SPLA licenses.

This is a perfect storm for a SPLA price increase.  You will get a price increase from Microsoft.  SPLA Resellers have endured rebate decreases for the last few years, so it’s unlikely they can sustain just passing along the Microsoft list price to you.  Resellers are not able to continue functioning at such low margins, so what you’ll be paying next year is a higher list price plus an additional margin for items that are otherwise not profitable for the Reseller.

That’s two price increases in one year!

You have no plans to abandon your data center and move to Azure, so, what can you do?

First, it’s essential to do a full accounting of all Microsoft software deployed in your environment and determine the actual usage levels. Then you need to figure out how to reduce license costs, or pass those on to your customers.

Now calling up a customer and telling them prices are going up is the worst idea. In many cases, you have multi-year contracts where price increases are simply not an option. The best path for most SPLA Hosters is to optimize their current environments and report as few licenses as necessary to remain in compliance while paying as little to your Reseller as possible.

That’s where Altaris comes in. We provide services that scan and discover all Microsoft software and usage levels across your entire network. We analyze and determine all optimization strategies as part of the package.  The cherry on top is that it all comes with full-service audit support. At the end of each month, we provide you with your fully optimized, completely compliance usage report.

You’re already spending time each month auditing and reporting the software. With Altaris, you’ll not only eliminate that wasted time, but you’ll also reduce your overall licensing fees to your Reseller through our proven optimization processes.

Make sure you’re prepared before January 1st when the price increases land. Contact us today to find out how to continue a profitable hosting business without taking another hit from Microsoft.

Schedule your free 30-minute consultation with The SPLA Licensing Experts today!

As Always,

BE SPLAWESOME!

The Many Ways to License System Center under SPLA

Finding yourself lost in the terms of System Center licensing? We feel for you. The System Center product line has been one of the more afflicted victims of Microsoft’s ever-changing SPLA licensing models. The good news is that licensing System Center is relatively low-cost in any scenario, and it has the opportunity to be a huge bargain if you’re taking full advantage of your software use rights. Wondering how so? System Center is the name Microsoft has put on a suite of applications used for deploying, configuring, managing, and monitoring your infrastructure. The applications are licensed as a suite, meaning you have rights to run all of the System Center apps (SCOM, SCCM, SCVMM, SCORCH, etc.) on the licensed server(s). The applications in the suite cover a wide range of functionality and licensing costs are pretty minimal (typically $12 to $54 a month per physical server depending on the core count of your physical infrastructure), so there’s a lot of value in utilizing multiple SC applications instead of purchasing standalone applications from other vendors that serve the same purpose.

Of course it may not make sense for your organization to use multiple SC products. If that’s the case, not to worry, System Center can still be deployed affordably if you know what you’re doing. Onto the fun part… the licensing:

Option 1: Core Infrastructure Suite (CIS)

Option 1 is option 1 because it’s the typically the most cost-effective way to license System Center. Core Infrastructure Suite is a bundled product that includes Windows Server and System Center licensing. The licensing model for CIS is the same as Windows Server—i.e. 1. Licenses are assigned to the physical core layer and they are sold in 2-core packs, 2. there’s an 8-core minimum license requirement per processor, and 3. the only difference between the Standard and Datacenter edition is the virtualization rights. (Datacenter edition grants rights to run unlimited Windows & SC VMs on the licensed physical server, and Standard edition includes rights to run 1 VM on the licensed physical server. Standard licenses can be stacked on the physical server for additional virtualization rights).

We’re a bunch of number crunchers here at Altaris. After reviewing all of the different combinations of Windows & System Center VM counts that could potentially sit on a host, we’ve found that it’s more cost-effective to use the CIS SKU to license System Center instead of the Windows Server & System Center SKUs individually in every case besides the following combinations of VM counts.

The main takeaway is that if you’re running more than 2 System Center VMs you’ll save upwards of 20% by using the Core Infrastructure Suite SKU.

Option 2: License Windows Server & System Center Individually

If the combination of Windows VMs and System Center VMs you are going to run on your physical hosts is one of the combinations displayed in the above table, license the hosts with Windows Server & System Center individually. Windows Server & System Center are licensed in the same manner (refer to above section for details).

Option 3: License Cloud Platform Suite

Not many hosters will be eligible to use the Cloud Platform Suite (CPS) SKUs, but the product line can lead to significant cost savings for those who can. The Cloud Platform Suite SKUs like the CIS SKUs are bundled SKUS that include Windows Server and System Center licensing. The difference? Well, there’s a few:

1. You must use Hyper-V as your hypervisor

2. You must be running Windows Server 2012/2012R2 & System Center 2012/2012 R2

3. Instead of assigning your licenses solely to your physical infrastructure (like you do with Windows Server & CIS), you assign licenses to both the physical layer (at a reduced cost compared with Windows & CIS) and the guest layer

There are 2 main reasons this is a sweet spot for hosters who are eligible to use the SKU, the first one being the most relevant-

1. If you use Cloud Platform Suite to license Windows & System Center, you’ll be able to continue reporting by Processor instead of using the more expensive Core licensing model that Microsoft rolled out with the 2016 product releases.

Microsoft is discontinuing the Cloud Platform Suite SKUs and as a result has not rolled out a Core licensing model for the product line. This can mean material cost savings for you if you choose to license your high-core servers with CPS instead of one of the other licensing options mentioned in this post. Just make sure you’re eligible to report CPS based on the criteria listed above, and that it makes financial sense based on your VM counts. If VM counts are extremely high, CPS won’t be the right model since you have to individually license the guests.

1. When you license with CPS you don’t have to worry about VM movement. Since you’re licensing both physical and virtual layers, VMs can move to different hosts without creating additional licensing requirements. To illustrate, with Windows Server and CIS you have to license the high water-mark # of VMs that sat on a host in each given month. This means your license requirements increase each time a VM moves hosts. VM movement is also difficult to track, which is why many hosters report Datacenter to make their SPLA reporting simpler even though their VM count doesn’t justify it. CPS eliminates this issue- you are covered on licensing no matter how the VMs move as long as you’ve licensed all physical servers and guests. 

Caveats/Tips:

• Take advantage of the full Suite of products. If you’re only using one of the applications, test out the others to see if they will add value to your organization.

• If the VMs in your environment are moving around, the # of VMs that needs to be licensed on each host is = to the maximum # of VMs that sat on the host within the usage month

• If you only need System Center deployed on a small number of VMs, keep those VMs pinned to the lowest number of physical hosts possible. Do so by removing the licensed hosts from clusters or by putting rules in place that restrict the SC VMs from moving around. Licensing costs will increase fast if the VMs are moving.

• If you decide to license CIS Standard, you’ll need to stack enough Standard licenses to provide virtualization rights for the total Windows VM count on the host, not just the System Center VM count (since CIS comes w/ Windows licensing)

• If you’re using the CIS SKU and you’ve installed the Datacenter edition of the Windows Server OS anywhere, that would automatically trigger the requirement to use the CIS Datacenter license, regardless of how many VMs are running

• The same goes for Windows Server licensing

We hope this overview gives you the ammunition you need to make an educated licensing decision. If all of this licensing talk makes your head hurt and you’re looking for additional guidance, schedule a free consultation with us at https://www.altariscloud.com/contact/ or check out our other services for SPLA partners on our about page here: https://www.altariscloud.com/about/.

As always, be SPLAWESOME!!

Paying too Much for SQL?

Are you still running SQL 2014?

What about SQL 2012?

Wow… 2008?

Don't lie, we know the answer.  From the past year of analyzing SPLA environments, over 50% of SQL deployments are still running on SQL 2008.  Hey 1975 called, they want their SQL back!

Last November, Microsoft announced a significant “feature upgrade” to non-Enterprise SQL editions with the release of SQL 2016 SP1.

Here’s the official announcement from Microsoft: https://blogs.msdn.microsoft.com/sqlreleaseservices/sql-server-2016-service-pack-1-sp1-released/

What does this mean?  This means that by upgrading to SQL 2016, some features that were only available in the Enterprise edition are now available in Standard and lower editions.

Are you taking advantage?  You can downgrade to Standard and save 74% on your SPLA SQL license costs.  If you only require Web or Express based on the new upgrade, then the savings really add up.  Web is 98% cheaper than Enterprise.  If you only need Express, then you won't need your scientific calculator anymore. No counting required, it's free to use in SPLA, and you don't have to report it.

Look at all of these features now available in non-Enterprise SQL Editions with the release of SQL 2016 SP1.

Please be advised, the scale and high availability limits remain the same as previous versions of SQL Server.   If you really want to nerd out, read through this Microsoft article for more information relating to the supported features and limits of different SQL Server 2016 editions.

https://docs.microsoft.com/en-us/sql/sql-server/editions-and-components-of-sql-server-2016

In addition, if you downgrade to SQL Standard 2016, you now have the ability to license your SQL installs by user SAL (subscriber access license), which may provide additional savings. Remember with Enterprise you can only license per Core in the SPLA program.

Now if this is all too confusing, and you need help managing your SQL reporting, contact Altaris Cloud to discuss the many ways we can help you save and manage your SPLA licensing.

Be SPLAwesome!

Altaris Partners with DXC to Deliver Asset Management as a Service for Concerto

This is a great example of what we do, which has been recognized and captured through a short video case study done by Microsoft. Creating tremendous value to our clients. Providing the continuous data and analytics to empower our clients to make critical business decisions that benefit them and their customers. They are decreasing costs, increasing profits, and eliminating any compliance risk at the same time.

Take 2 minutes and click here to watch the full story

As always, be SPLAWESOME!!

Microsoft Inspire 2017 Recap

Microsoft Inspire 2017 was held in early July at our nation’s capital. Formerly known as Worldwide Partner Conference (WPC), Inspire is held annually as Microsoft kicks off its fiscal year and is the platform by which it attempts to drive deeper engagements with its business partners and introduce its latest and greatest products and services.

The Altaris Cloud Team was there to experience a week filled with networking opportunities and keynotes by Microsoft’s executives who provided the insight into what’s new and what’s next.

While those on stage echoed themes about Microsoft’s Partner-First decisions, the unveiling of Microsoft 365, and how AI is becoming intrinsic in every application built within the intelligent cloud, the conversations during the networking and collaboration sessions focused on a topic you won’t see in the headlines: Compliance.

Do a Google search for the news coming out of Microsoft Inspire 2017 and you’ll find the usual commentary on Microsoft’s strides in cloud services and its strategies to grow its footprint with its business partners and their shared customers. But for the SPLA Partners in attendance, while that’s all fine and good, dialog was rampant on how Microsoft has been ramping up its compliance activities considerably on a worldwide basis over the past few years and they aren’t slowing down yet.

Microsoft also rolled out SAM for Hosting to its SAM Partners, although that didn’t make headlines either but clearly indicates Microsoft’s continued commitment to compliance activities in the coming years. SAM isn’t just for traditional volume licensing customers anymore; service providers are now going to be targeted in addition to their annual chance at the SPLA audit lottery. Do you feel lucky?

The consensus was that it’s a matter of when, not if, Microsoft’s compliance teams will come calling in Fiscal Year 2018. The worrisome sentiments were around reporting correctly and how to defend against budget-busting findings. The SPLA partners that found themselves staring at audit reports with big numbers were forced to make difficult decisions coming out of their respective compliance engagements, according to those the Altaris Cloud Team spoke with.

SPLA partners reported having to renegotiate contracts with customers because of the increased reporting obligations on their monthly usage reports. Others were forced to seek out external financing to remediate their license gaps and now face large payments over the next two or three years. One partner reported laying off two staff members to allow his company the chance to continue its hosting business.

Now that another Microsoft fiscal year is upon us, another round of SPLA audits are on the horizon. Compliance revenue has become big business, and while Microsoft certainly is making massive strides in the digital realm of the partner space with Azure AI and Azure Stack offerings, the luster of big announcements is tarnished by the fact most SPLA partners don’t know how to report their hosting environments correctly. And both Microsoft and the SPLA partners know it.

Altaris Cloud has more than 25 years of combined SPLA licensing experience. The Altaris team is comprised of ex-Microsoft personnel who built the compliance programs and strategies Microsoft uses to extract compliance dollars from its partners, making Altaris uniquely proficient in providing SPLA partners the program’s most effective strategies and business recommendations.

Contact Altaris today to learn how we empower SPLA partners to reduce costs and risks and maximize profits and scalability.

Be SPLAwesome!

Know your Microsoft SPLA audit terminology, the definitive SPLA audit terms and acronyms guide: part 1

I tried to use Siri to figure out some Microsoft acronyms. Try it. It’s useless. Siri told me SPUR (Service Provider Use Rights) is a metal tool used in horsemanship. Well that’s not going to help me if I’m being audited.

Microsoft is famous for having more acronyms that any other business on the planet. If you are going through any compliance motion with Microsoft (Self-Assessment, Risk Assessment, Full Audit), you need a better partner than Siri to help you navigate the experience.

Altaris Cloud is a company comprised of ex Microsoft folks: former Microsoft SPLA auditors from the Big-Four audit firms, the guy who ran SPLA audits for years as well as former Microsoft hosting sales executives. Collectively we have been connected to the company for years and live in the world of TLAs and FLAs (three and four letter acronyms).

To that end we’ve put together our version of the Urban Dictionary for some of the more common Microsoft acronyms that likely will come up in an audit.

If we’ve missed a term or want to talk about your hosting business, feel free to give us a call or schedule a free consult here.

• LCC – Stands for License and Contract Compliance. This is Microsoft’s official audit group. They are the ones compiling the official SPLA and volume licensing audit notification letters, sending them out, sometimes doing the actual data collection/analysis, and ultimately managing the settlement process

• ELP – Stands for Effective License Position and is the outcome of the data analysis phase of an audit. It’s the basis for those painful compliance-based settlement motions you go through. This comes in the form of an Excel workbook and essentially is meant to show a comparison between what you have reported and what your software usage is. For SPLA, it’s broken out on a month to month basis.

• Deployment Table – These are components of the ELP workbook that contain detailed product deployment information.

• CELA - Stands for Corporate, External, & Legal Affairs. This was formally Legal and Corporate Affairs (LCA). This is group who the LCC team at Microsoft brings in to help with any legal escalations that come up during an audit. It’s also who they turn to if you ignore that audit notification letter.

• SAM – Stands for Software Asset Management. This is a generic industry term but specific to Microsoft there is a Software Asset Management team that conducts license reviews but tries to differentiate itself from the LCC team’s goals. One way is through their SAM for Hosting program. We have a lot of opinions on this one, if you’re curious contact us for more info

• OCP – One Commercial Partner. Extension of the Microsoft SPLA hosting sales arm that conduct their own targeted compliance motions that are similar to LCC

• WWLP – World Wide Licensing and Pricing. This is the group that decides on the licensing rules, prices, and in rare instances, SPLA amendments

• MBSA – Stands for Microsoft Business and Services Agreement. This is the overarching agreement all your SPLA contracts fall under

• Full audit/3rd Party Audit – Audit based on a formal invocation of the verifying compliance section of the SPLA and MBSA. Here Microsoft hires an E&Y, Deloitte, KPMG, or PWC to come in and perform the audit. It’s probably the most intrusive of Microsoft’s compliance motions, contact us if you have concerns over this or any of the audit compliance motions.

• VSA – Stands for Verified Self-Audit. Still a formal invocation of the MBSA and SPLA contracts like a full audit. Unlike a 3rd party audit, you complete data collection on your own and fill in a deployment workbook. LCC contractors and/or staff performs validation procedures.

• SPLA – Services Provider License Agreement. Hopefully you’ve heard of this one!

• SPUR – Services Provider Use Rights. This is the publicly available document containing the messy, ever changing, complex SPLA licensing rules 😊

• PUR – Product Use Rights. This document contains the licensing terms around most non-SPLA licensing models. Be careful, Microsoft’s licensing isn’t the easiest (it’s why we’re in business!). There are key differences between the PUR and the SPUR that you need to be aware of.

• License review/inspection – Compliance motion initiated by the OCP team.

• CSP – Cloud Solution Provider. Microsoft’s long-term vision for hosting.

• AOC – Microsoft has different groups in different regions. AOC stands for American Operations Center and is responsible for (among many other things) running audits in North and South America.

• EOC – See above, this stands for Europe Operations Center

If you want to learn more about us or our services check out our about page here . If you want to schedule a free consultation give us a call or visit here.

Be Splawesome!