Microsoft Service Providers License Agreement (SPLA)

Information & GUIDE

The Services Provider License Agreement (SPLA) Program provides a more streamlined way for services providers to give their end customers access to fully licensed Microsoft products as software services. Because the services provider—not the end customer—is the licensee, the SPLA Program reduces the complexity of offering software services.

As such, the SPLA Program is an excellent opportunity for service providers to offer customers a single point through which to acquire software services and the associated Microsoft Products so that the customers do not have to acquire and deploy their own licensed products. In addition, customers can leverage the flexibility, cost, and management efficiencies of a shared infrastructure.

Benefits for Service Providers

SPLA Reseller

Service Providers

Customers

$$$

LICENSEE

The Services Provider License Agreement is the primary licensing program for all service providers, including Self-Hosted ISVs, offering their applications as software services to their customers through servers connected.

This enables service providers to offer a variety of software services to customers, such as:

• access to third-party software, • platform infrastructure services, • business transaction services, • web hosting and • streaming media services, and • specialised line-of-business (LOB) applications

NOTE: Microsoft prohibits the use of their software from their other programs such as EA, Open, MSDN, OEM etc. by Services Providers when offering a commercial service. Service Providers can only offer this using software available through the SPLA program.

Why SPLA and not Volume Licensing?

What is SPLA?

Whenever a company is hosting an application on behalf of a third party, SPLA must be part of the conversation. All volume licensing programs are designed for internal consumption, not hosting solutions, as outlined in the Product Use Rights (PUR) where it states “No Commercial Hosting”.

Let’s take Exchange as an example. When you provide email to your own employees using Exchange, you will purchase a volume licensing agreement for your users. Why? Because this is a service provide

to your own employees; that’s what the program is designed for.

However, what if your company has a customer that needs email for their own internal employees? This customer does not own an Exchange server; has few resources to deploy it;

and would like you to host Exchange for them. How do you license Exchange under this model? You would need to license via SPLA. Why? You would be hosting Exchange on

behalf of this other company.

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Other Cases for SPLA

M&A, Franchises, Business Associations:

According to the Microsoft Business Services Agreement (MBSA), affiliated organisations include, “any legal entity that a party owns, or is owned by, or that is under common ownership with that party. ‘Ownership’ means, for purposes of this definition, control of more than a 50% interest in an entity.”

Where this creates an issue is if IT services are being provided for any external user or non-affiliated organisation (not greater than the 50% owned). If a company divests greater than 50% interest in a business unit but continues to provide IT services, they are no longer permitted to use their Volume Licenses to provide these services.

This equally applies to franchises or business associations where there are perhaps close working relationships, but not the level of ownership required by the affiliate definition. In order to service all of these organizations via single agreement on shared hardware, SPLA is the only option.

MSP’s, ISV’s, Evolving Business models:

MSP’s can encounter SPLA requirements when they:

1. Provide any sort of service (monitoring, DB, DR, etc) in a multi-tenant datacentre environment which they own.

2. When they are providing software as part of their services in a subscription based model.

For organisations who have sold an on-premises solution that they have developed, but now are looking to put it into the cloud (ISVs), SPLA is always going to be an option. But, there may also be an additional option if your

The Unknown Requirement & The Handshake Agreement

Some companies that were not aware of SPLA, or have had some sort of communication whereby it was perceived that they did not require SPLA, have makeshift solutions that should actually be licensed with SPLA. In fact, if your company fits any of the scenarios above, although you may have proceeded in good faith towards compliance, you still may have exposure to a Microsoft audit.

If you are unclear on where your organisation stands or you unexpectedly uncover a requirement for SPLA in your environment, you need to consider the following:

• SPLA & Volume Licensing require separate hardware: Not only are there potential hidden costs in additional hardware (or 3rd party hosted clouds like Azure) involved, but isolation of an application that is servicing both internal and 3rd party users may prove challenging to separate.

• OpEx vs. CapEx: There is not a programmatic means to recoup Volume License purchases to offset unanticipated SPLA licensing requirements. This also can affect how the services were cost-modeled originally.

• Multiple Agreements, Pricing, & Reporting: By nature, you would be adding another agreement, and since they are separate programs, there is not a means to aggregate your purchasing power to leverage additional discounts between SPLA and VL programs. Additionally, there is the monthly reporting requirement which may need additional resources to ensure accuracy and ongoing compliance.

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1

Is Microsoft software only being used by your employees, contractors affiliates, or vendors

fo your benefit?

2

Are you using Microsoft software to provide software

services to a third party?

License through Microsoft internal use licensing

agreement

3

Is the third party accessing Microsoft software that is included with your own

software?

4

Are you providing Microsoft software for third parties to access

information or acquire goods/services through a website?

6

Is the software publicly accessible (access

does not require log in credentials)?

5

Is the software accessed by multiple

third parties?

License a Self-Hosted application (subject to conditions in MS Product Terms) or

license through SPLA

Contact a SoftwareONE

representative for clarification

License through SPLA or license through

SPLA as an Authorised License Mobility

Provider

License through SPLA or managed licensed software on behalf of the third party as a

dedicated outsourcer

License through Microsoft internal use licensing agreement

License through Microsoft internal use licensing agreement

with External Connector

Yes No

Yes No

Yes No

Yes No Yes No

Yes No

Understanding when to you need a SPLA agreement can be confusing. To help you work through some of the use cases just discussed you can use the following roadmap.

Qualification Roadmap

What about SPLA and Public Clouds?

What happens if you decide to host your solution from another datacentre provider on behalf of your customers? Can you still use SPLA? Absolutely, but keep a few things in mind:

1. You must purchase a Windows instance from the provider.

2. You cannot report (license) cores or processors under your own agreement. If the solution requires cores or processors you must purchase them from the datacentre provider. Why? Unless it is a 100% dedicated environment (Amazon/Azure are NOT) the use rights prohibit it.

3. You CAN report user licenses under your SPLA and purchase Windows/SQL from the datacentre provider. Here’s a note from the Azure website that explains it well: Can service providers build a cloud-based service on Azure using session-based hosting through RDS (Remote Desktop Services, formerly known as Terminal Services)? Yes, service providers can offer hosted solutions through RDS running on Azure as long as they obtained RDS SALs (Subscriber Access Licenses) through a Microsoft Services Provider License Agreement (SPLA) reseller.

4. You CAN have your customers purchase Azure and they can have you manage it on their behalf. Under this model you would be a managed service provider.

The adoption of new services and evolution of business IT has driven many changes in licenses entitlements and use rights. The scenarios and guidelines explained in this document are representative of trends we have recently noticed that are moving organisations into different programs as their business evolves. The right answers to how to use your licenses and licensing programs to your benefit only come from asking the right questions and to do this you need to speak to the right people. Having a conversation with your local SoftwareONE hosting specialist will be the best first step to helping you get to the bottom of the best solution that specifically fits your business. With global success and experience you can be sure you’re in safe hands.

Talking to the right people...

We migrated from another SPLA reseller in mid-2012 and were pleasantly surprised how straight forward SoftwareONE made the process. Since then they’ve been a pleasure to deal with, resolving any issues promptly and being quick to respond when we have licensing questions. Their ability to support us in more than one territory is especially valuable. A great service all round.

Jeff Dodd, Managing Director, Entrust IT

““

What can you expect from SoftwareONE

SoftwareONE enables many of the best-in-breed system integrators and service providers to more effectively manage the software licensing aspects of their business. Our global pricing and benchmarking, easy to use portal and mature SPLA Software Asset Management services, guarantee that SoftwareONE will give you the best complete SPLA solution.

SPLA Best practice

SoftwareONE Excellence

Added Services

• On Boarding and Contract Support• Regular Support and Timely Updates• ERP Integration Services• Review of Monthly Report from Service Providers• Proactive Account Management Processes • Reactive Licensing Support with well-defined support SLAs

• Global Pricing available• Easy Reporting Portal for Monthly Usage

• A Mature SAM Practice • Managed SAM SPLA Service

Our unique SPLA SAM services...

Historically, most service providers haven’t seen Software Asset Management (SAM) as being essential to their business. However, these same providers are now starting to realise through expensive, time consuming audits initiated by software vendors that SAM can proactively mitigate the risk of an audit by analysing and identifying compliance risks. Advantages of SPLA SAM for service providers:

• Uncover missed billing opportunities - help SP’s to find new monthly revenue

• License Optimization - software license cost savings in monthly use reports

• Win more business - pricing proposals as cost effectively as possible

• Save time preparing monthly use reports - with Software Inventory tools

• Opportunities to leverage Systems Management tools - for automation and self service • Best practice SAM tools - be recognized as industry best practice to their customers

Benefits of a third party consultant:

Having a software publisher perform a SAM engagement on your environment may lead to licensing outcomes to work in the publisher’s favour. By engaging SoftwareONE, you can alleviate the stress

of researching implementing the right tools for your environment. This will help you gain an independent perspective into your deployments without having to be under the watchful eyes of

the publisher. We are even able to negotiate with the publisher on your behalf.

SoftwareONE’s SAM Consultants have extensive experience assisting service providers roadmap and maintain effective SAM practices.

...although you may have proceeded in good faith towards compliance, you still may have exposure to a Microsoft audit.

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What Cloud Solutions mean to us

Microsoft CSR authorisation for SoftwareONE is vitally important to the strategic direction of our organisation and our ongoing success in being a global cloud-first software solution provider focused on the partner hosting market. Our goal is to provide the best partner-to-partner and partner-to-customer engagement model in the Microsoft partner channel through our VARassist partner program. This provides an opportunity to move beyond the traditional SPLA sales motion which is naturally addressed to IaaS Service Providers and telecommunication companies. This secures business growth once a larger consolidation in this market occurs.

If you’d like to learn more about the benefits of our VARassist partner program, reach out to your SoftwareONE team today.

www.softwareone.comspla.au@softwareone.com

SoftwareONE sets the standard for how partners can work together to serve customers. VARassist is the model system for how partners, offering different solutions, can work together on behalf of our customers. SoftwareONE’s model truly exemplifies teamwork.

Practice Director, leading VARassist Partner

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The Unique SoftwareONE Partner Portal

SoftwareONE’s Software Lifecycle Portal provides your customers with single-point access to all of their software license and agreement information, procurement, and reporting needs. This intuitive, globally-connected portal also offers a back-end “Partner Portal”, giving you complete visibility into valuable customer information to advance your business opportunities.

The VARassist Partner Portal was designed specifically with the partner in mind, is available 24x7, and is FREE.

Easy reporting portal for monthly usage

Integration with your ERP system

Global pricing available

Detailed sales and influence reporting

Opportunity pipeline management

Who are SoftwareONE?

SoftwareONE is a trusted Software Portfolio Management advisor, specialising in complex software licensing challenges. Our range of consulting services come from 30 years of global experience with proven results. We also provide a suite of complementary tools that allow transparency of a client’s software estate and make it easier to get the most from a company’s software assets.

As a reseller, we are a leading Microsoft LSP in Australia and an accredited Cloud Solutions Reseller (CSR) partner.

Contact us today to talk about how we can help you.

Contact information

Sydney

Level 8, 189 Kent StSydney, NSW 2000 Phone: +61 2 8229 0000

Central contacts:

Email: spla.au@softwareone.com

Phone: (02) 8229 0000

www.softwareone.com

blog.softwareone.com

www.softwareone.comspla.au@softwareone.com

Locations:

Melbourne

Podium Building Level 4, 120 Collins StMelbourne, VIC 3000Phone: +61 2 8229 0000

Perth

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Level 22, 69 Ann St Brisbane, QLD 4000Phone: +61 7 3112 5100