QMTH and Software Outsourcing Clarification (Windows 10)

We’ve written about QMTH (Qualified Multi-tenant Hosting) before, outlining the program, qualification requirements, and the overall positive step Microsoft has taken to expand third-party hosting rights for Office and Windows.  But did you know that earlier this year Microsoft announced that Office 365 Business (procured as part of Microsoft 365 Business) is now an eligible subscription?  Up until April 30th, 2019 QMTH service providers had the option to host Office 365 Pro Plus for their end customers as a standalone subscription or as a component of either E3-E5-M365, however, Office 365 Business was not included on the initial list of eligible products.  The significance of this change will really depend on your target audience and business model.  But, if you service small and medium customers or are looking to provide your clients with a more cost effective solution, then this addition should have a positive impact.

Software Outsourcing Clarification

The traditional software outsourcing right, which allows end users to furnish a managed hosted server environment with their own licenses, has been around since the early days of SPLA (see Outsourcing Software Management definition in the Product Terms).  As long as the server/host provisioned for your end customer is fully dedicated to the one client there is almost unimpeded flexibility to taking on and hosting end user owned licenses... almost.  One example of where you will run into license restrictions, even on fully dedicated hardware, is with Windows 10 sold through CSP.  First the good news, if your clients purchase their Windows 10 subscriptions (Windows 10 Enterprise E3 Per User with SA, Windows 10 Enterprise E5 Per User with SA, etc.), through a traditional Volume Licensing Program, then this restriction does not apply.  If, however, your end customers have purchased their Windows 10 licenses through CSP, then the only way they can assign the software license to fully dedicated hardware environment is through the QMTH program.  Unlike Office 365 Pro Plus or Office 365 Business, provisioning physically dedicated hardware does not mitigate the need to be an Authorized QMTH partner.

If this seems complicated then let us help you demystify this and any other complex hybrid licensing scenarios.  We will give you the certainty and ability to understand your licensing rights, stay compliant, and sell with confidence. 

While on the topic, take a look at our recent blog about the pending changes to the Outsourcing Software Management use rights.

Email us at info@altariscloud.com or use the button below to book a complimentary consultation

From Your Microsoft Licensing Experts at Altaris Cloud

Microsoft eliminates traditional ‘Outsourcing’ rights for Major Cloud competitors

In a bold move Microsoft has eliminated the right to leverage on-premise licensing in hosted, Dedicated environments . . . but just for who they refer to as ‘Listed Providers’. Those providers are identified as Microsoft, Alibaba, AWS and Google. Of course, AHUB or Azure Hybrid Use Benefits still allow customers to leverage on-premise licensing on Azure, so while Microsoft has included themselves in the group of cloud providers who lose the right to leverage on-premise licensing, AHUB gives them a distinct advantage.

Here’s the official announcement: https://www.microsoft.com/en-us/licensing/news/updated-licensing-rights-for-dedicated-cloud

Of interest is why IBM wasn’t also included in the Listed Providers, given the popularity of dedicated instances on IBM Cloud (formally Bluemix or SoftLayer). It will be interesting to see if they expand the list in the future and include more traditional hosting companies.

Perhaps Microsoft doesn’t see the same blurred line with IBM as they see with the others:

Dedicated hosted cloud services by major public cloud providers typically offer global elastic scale, on demand provisioning and a pay-as-you-go model, similar to multitenant cloud services.

I’m not sure I understand this statement but that’s their justification for this change. In this statement they are saying dedicated cloud services actually leverage many multitenant attributes, so we now categorize it that way. In reality, they are waxing philosophical of what is really just an aggressive business decision.

While this change won’t impact on-premise licensing purchased prior to October 1, 2019, it’s going to create turmoil. Microsoft can now target customers on competitive cloud platforms, where they know exactly when their Microsoft agreement renewal dates are. Those customers would have to either license through vehicles like SPLA, move to Azure or move to another provider and hope that provider doesn’t end up on ‘The List’.

If you are impacted by this change, email us or use the link below to make an appointment and we’d be happy to discuss your options going forward.

From your Microsoft Licensing Experts at Altaris Cloud

Update: Microsoft reverses decision to end Internal Use rights (IUR)

In an unpreceded move, Microsoft reversed their decision to end Internal Use Rights (IUR) as outlined below. Here's the official announcement.

That said, we are going to keep the post below as this reversal in policy has no time commitment.

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Are you a Microsoft Action Pack (MAP) subscriber or do you currently hold a Microsoft Partner Network (MPN) Competency? If you are then you’ll want to take note of recent announcement where Microsoft outlined the pending retirement of arguably the most compelling partner benefit: Internal User Rights (IUR).

On July 3rd, 2019 Microsoft updated the MPN Programs Guide and added following:

Change Notification: Product Licenses Terms of Use Update on July 1, 2020

As of July 2020, the terms of use for product licenses included in programs and offers in the Microsoft Partner Network such as competencies and the Microsoft Action Pack will change. Currently, the licenses allow partners to access and use the products for internal business purposes. We will retire product licenses for internal use purposes on July 1, 2020. After that date, product licenses offered through the Microsoft Partner Network may only be used for business development scenarios, including demonstration purposes, solution/services development purposes, and internal training purposes.

What does this mean for you as a MAP subscriber or MPN Competency holder? How do you ensure that you remain compliant from a Product User Rights perspective as these changes start to take effect? First of, Microsoft will update the corresponding use rights, allowing partners to continue consuming their software grants for “development scenarios, including demonstration purposes, solution/services development purposes, and internal training purposes”. Although limited in scope certain partners, such as Independent Software Vendors (ISVs), will continue to benefit from their license grants when developing solution and services. Others, that have training requirements, can continue consuming their MAP or MPN eligible licenses to address their internal readiness solutions.

This however does not change the fact that the most significant MAP and MPN benefit will be completely retired as of July 1st, 2020. According the MPN portal update, the changes are part of a phased rollout and beginning October 1st, 2019, “the product licenses included with competencies will be specific to the competency you attain”.

Knowing this, now is great opportunity to work on establishing a solid Software Asset Management practice, aimed at tracking deployments against entitlements, identifying gaps in licensing, and most importantly finding ways to optimize your existing software footprint. Altaris can ensure you don’t over buy and as a CSP, deliver the same software for your internal use at a cost less than MSRP.  (**The use rights of the CSP program don't allow a partner to purchase software for internal consumption).

Email us or click the link below to schedule a complimentary consultation.

From your Licensing Experts at Altaris Cloud 

SPLA Audit Hangover

Okay, so it wasn’t a party but your SPLA audit is finally coming to a close. If you are like many SPLA partners who have gone through an audit this year, June is the month that a huge percentage of audits are settled with Microsoft, as this month marks the end of their fiscal year.

The question many partners ask us is, what now?

The snapshot taken by the audit firm – the scans of your hosting environment that reveal what you are consuming under SPLA – is likely a year old. Those same snapshots may have revealed decommissioned servers, users that had access but were no longer using the service (technically you must pay for anyone who the ability to access a service, regardless if they did so or not in any given month), SQL servers that are seriously under-utilized . . . and otherwise a lot of stale data.

The final ELP (Effective Licensing Position) handed over to Microsoft for settlement with you - the SPLA partner - isn’t a blueprint for reporting going forward.

So like any bad party, when it’s over, it’s time to clear your head and clean up the mess.

Post-audit is a great time and opportunity to do an assessment of your environment and fully optimize your Microsoft licensing and hardware.

The first step is to understand what you need to report going forward. While you could run the MAP tool against your environment, or whatever tool the audit firm had you use, you are only accomplishing one thing: capturing inventory at a point-in-time.

In the short term, running a tool like Movere might make a lot more sense. Not only do you capture inventory, but also server utilization (opportunities to consolidate SQL servers) as well as workloads that may be better suited for the Public Cloud.

For the longer term – to ensure you are in a good position for your next audit – we recommend developing a dynamic, monthly SAM (Software Asset Management) practice that captures and maintains historical records of all the changes in your unique hosting environment.

If you did just finish an audit, we’d be happy to discuss the experience and what your options are going forward, including non-SPLA licensing vehicles like CSP and HISV (Hosted Independent Software Vendor).

Either email us at info@altariscloud.com or book a complimentary consultation using our booking tool below. 

From your Microsoft Licensing Specialists at Altaris Cloud.

Meet with Altaris at Inspire 2019

From July 14th to the 16th, Altaris Cloud will be in attendance at Microsoft Inspire. 

While we specialize in SPLA, we have expanded our team to cover all Microsoft licensing vehicles. With EAs, CSP, SPLA, Select, Open, etc., there are so many considerations and ways to optimize your Microsoft licensing footprint. 

We'd be happy to meet with you and review your unique situation with the goal of reducing your costs and finding the right home for your Microsoft workloads. We offer everything from small blocks of consulting hours, Cloud Assessments, full 'private' reviews of your environment (baseline reviews) to a complete outsource solution where we manage your entire Microsoft license reporting and procurement recommendations. 

You can email us at info@altariscloud.com, use the Microsoft Inspire connect tool to book a meeting in the common area or use the link below to schedule an appointment.

From your Microsoft licensing experts at Altaris Cloud

Altaris becomes a 'compliant' CSP partner

So there's nothing unique about joining Microsoft's CSP (Cloud Solution Provider) program, particularly as an indirect CSP reseller. You really just need a presence in the geography you will be reselling either Office 365 or Azure. 

The unique angle for us, is something central to what we do - compliance. Some may ask, how you could be out of compliance when everything is ordered through the partner center and hosted in a Microsoft datacenter? 

Quite simply by making yourself - a CSP partner - a tenant, and provisioning either Azure or Office 365 for internal use. If you look at the Microsoft Cloud Reseller Agreement, which all CSP partners are required to agree to the terms of, you need to take note of Section 8 d., where you'll see this language: 

Use Restrictions. Company may not use Products acquired under this Agreement internally. Company may not distribute or otherwise transfer Products acquired under this Agreement to any of its Affiliates. These restrictions do not apply to Products that Company acquires through other licensing programs, such as the Enterprise Agreement program.

The reasons for reporting internal use through CSP are obvious: you capture the margins CSP partners get plus in many cases large, back-end rebates and incentives. This wouldn't be hard for Microsoft to catch and they would be motivated given how much more they make through other licensing vehicles. 

If you find yourself in this position, there is another option that's totally compliant. Have Altaris provision what you need for internal use through our CSP agreement. We can work out a deal that still makes it financially attractive while at the same time, fully compliant. 

Either email us at info@altariscloud.com or book a complimentary consultation using our booking tool below. 

From your Microsoft Licensing Specialists at Altaris Cloud

Altaris Cloud expands its practice to include End-User Licensing

At Altaris Cloud we’ve always had a deep understanding of how end-user licensing works. In the past we chose to focus exclusively on SPLA as that’s an area where there’s limited expertise in the market, but as we’ve discovered with many of our engagements with hosters and service providers, they often have Enterprise Agreements (EAs) or other end-user licensing agreements to cover what Microsoft software they consume internally (by employees). And they don’t always know the line that divides internal use vs. what’s in their hosted environment.

For example, all too often we see scenarios where a company has several test/dev/qa servers running on hardware that is also has SPLA production servers. The question comes up in these scenarios, does the SPLA give me licenses to cover this? Can I use the MSDN subscriptions I have to cover these servers and the software installed on them? Can I report Visual Studio through SPLA for myself? And what about MPN grants I have, can I use these?

Just as the case is with all Microsoft licensing, the answer is a definitive ... it depends.

Under a SPLA, Service Providers may report Microsoft products for internal use as long as it’s 50 percent of external use.  The primary consideration to keep in mind is that the 50 percent is defined on a per product SKU basis, not a per product family basis. It’s also not free software. For example, if you used/made available 50 SQL Standard – 2 core licenses for hosting purposes, you may use 25 SQL Standard – 2 core licenses for internal purpose.  The total reported SQL Standard -2 core licenses would be 75. However, in this scenario you wouldn’t be able to report 25 SQL Server Standard SALs as that is a different SKU.

So if you are reporting a few copies of Visual Studio through SPLA but it’s for internal use and you actually don’t host any for an end-customer, then the answer is no. You can’t report through SPLA. Further, your MSDN subscriptions don’t come with license mobility rights so there are restrictions to keep in mind when trying to leverage them in environments where hosting and internal use are mixed. 

MPN has restrictions as well. These are required to be used in a development, test, demo, sandbox, or production environment for general internal business purposes and not for any type of commercial purpose. For example, installing the Windows Server operating system and Microsoft Exchange Server to set up an email system that you can use to send business-related email is acceptable. However, production use for external commercial purposes, such as hosting a commercial website, is outside the scope of these rights.

This isn’t just about compliance it’s also about cost-savings and optimization. Knowing what to report through your SPLA agreement, EA, Select or Open agreement can have a huge outcome on your total Microsoft licensing costs.

At Altaris we are not in the business of reselling licenses so the guidance we provide is unbiased. If you are unsure you are balancing your agreements correctly, we can help. To get started either email us at info@altariscloud.com or book a free consultation and so we can better understand your unique situation. 

From your Microsoft Licensing Specialists at Altaris Cloud

SQL 2008 R2 end of life: The benefits of SPLA and SA

Microsoft has been pretty vocal about the upcoming end of support for SQL Server 2008 and SQL 2008 R2, coming July 9th , 2019. This will be followed by end of support for Windows Server 2008 and 2008 R2, on January 14th, 2020. What this means is Microsoft will end regular security updates for both of these platforms.

Of course Microsoft has made it clear that support will be available if you migrate your instances of SQL 2008 or 2008 R2 to Azure. This is one option for service providers to consider and Altaris Cloud can help with the Cloud Assessment if this is the direction you want to take your business. Our Cloud Assessments meter your applications to determine the optimal deployment in the cloud, ensuring you don’t over provision. There are a lot of things to keep in mind if you are considering moving workloads to Azure including your use rights and the potentially huge costs savings realized under AHUB (Azure Hybrid Use Rights Benefits) where you also get duel use rights for both SQL and Windows Server, provided you have active Software Assurance in place.

The other option outside of shifting your workloads to Azure is to upgrade your software. SPLA partners are in the unique position here of being able to do so at no additional licensing cost. Unlike perpetual licensing, SPLA gives you the rights to the latest and greatest versions of software, meaning you can upgrade to the most current edition and pay no more. Something to consider.

Whether is a SPLA health check or a cloud migration assessment, Altaris Cloud has the expertise on staff to manage all your Microsoft licensing.

If you want to discuss your options and how we can help, contact us directly or book a free consultation.

From your Microsoft Licensing Specialists