When we think of Microsoft SPLA, it tends to be in the context of compliance most of the time. After all, SPLA audits are known to be particularly difficult. However, in working closely with our clients in managing their SPLA licensing, we have found that many service providers are actually overspending. Below, we share some of the key signs that you may be overspending on SPLA licensing.
What is Microsoft SPLA?
Microsoft SPLA (Services Provider License Agreement) is Microsoft's pay-as-you-go license program for hosters. Organizations that host Microsoft software (directly or indirectly) for commercial benefit must sign a SPLA agreement.
Intentionally Over-Reporting Each Month To Minimize The Size of a Future Audit Settlement
Many service providers who are risk-averse intentionally pad their reporting to “be on the safe side” so that when an auditor does come, the findings are lower, and in turn, any settlement is smaller. While we typically see some under-reporting for certain products, service providers who take this approach are typically over-reporting much more than they realize in order to achieve that peace of mind. Although over-reporting may seem like the best option, the additional money reported each month would be better used towards SPLA licensing or consulting services.
No Standard Edition is Being Reported
When we see only SQL Enterprise and no SQL Standard reported, it can mean the service provider is only licensing at the host level, which may not be cost-effective. Likewise, if Core Infrastructure Suite or Windows Server Datacenter only is reported, but not Standard edition, it can be an indicator that the licensing is not optimized. We have seen many cases where only Datacenter edition was being reported, but there were several low-density clusters, so the unlimited virtualization rights were not being maximized. Licensing the physical hosts that had a small number of virtual machines residing on them with Standard edition, instead of Datacenter edition, helped one of our recent clients save over 40% on their monthly SPLA reporting.
Not Maximizing the Product Use Rights
The Service Provider Use Rights (SPUR) allows 60 days for end-user evaluation purposes, and access for up to 20 administrative users per datacenter, however, many service providers are not taking these rights into consideration when determining how much to report. You may ask, why aren’t they factoring this in? Well, realistically, the time spent to determine usage each month is already rather burdensome for most service providers, so adding these steps into the process only takes more time and adds more complexity that they may not feel is worth it. However, every dollar adds up so it could be worth your time to calculate even if it adds to what is already a fairly manual process.
Not Taking Advantage of SKU Bundles
Part of the challenge with SPLA is the way Microsoft packages their products using different SKUs and SKU bundles and how often that changes. For example, do you use both Windows Server and System Center components in your environment? If yes, the Core Infrastructure Suite, which bundles these two products together, can help you decrease your SPLA expenditure each month. If you host Skype for Business, Exchange Server and SharePoint Server, by choosing the Productivity Suite SAL SKU, which combines all three of these, you could find greater savings. We have seen some service providers save nearly 30% than if they reported each SAL separately.
Not Leveraging Software Assurance Benefits
There are several Software Assurance (SA) benefits that can also be used in the context of SPLA but are often overlooked. Service providers who host proprietary software may be eligible for self-hosting rights subject to a few requirements. When a hosted solution qualifies for self-hosting rights, all licensing can be covered under an Enterprise Agreement or other agreement that includes SA with licenses. This commonly turns out to be the most cost-effective channel to license the underlying Microsoft software when compared to licensing under SPLA. Keep in mind additional SA benefits like SQL failover rights and Windows Server disaster recovery rights as well.
Not Performing Inventories With a Tool or Script
Some service providers have based their reporting off a standard image or build. Some may even report by customer billing records alone. The problem with this is that you may not know when (or if) something has deviated from the standard unless you have actual data to rely upon. We have seen this kind of “guesswork” lead to both over-reporting and under-reporting of SPLA usage.
Ambiguity Around Where the Licensing Responsibility Lies
With SPLA, it’s possible to allow end customers to bring their own licensing or to use a data center outsourcer to whom licensing responsibility can be transferred. This approach can quickly make things fuzzy and lead to over-reporting on SPLA, as well as over-spending across parties when there isn’t clarity on who is licensing what piece of software in which environment.
Not Keeping Active Directory Up-To-Date
Disabling users who no longer need access to software and decommissioning servers that need to be retired in a timely fashion will help eliminate costs from over-reporting due to stale data. One client we worked who specialized in hosting accounting software typically saw a large surge of users accessing the software during the tax season but had lower usage in the offseason. By disabling seasonal users outside of the tax season and re-enabling them in AD when they needed access to the software, the customer was able to limit what would have otherwise been unnecessary over-reporting in off-peak months.
Misinterpreting Licensing Rules and Reporting Requirements
On more than one occasion, we have come across clients who were double-reporting simply because they were reporting total cores instead of 2-core packs for Windows Server and SQL Server. It’s also common to see service providers license Windows Server on a per VM basis as opposed to licensing the physical hardware, which can lead to inflated usage numbers. If you choose to keep the SPLA monthly reporting function in-house, it is a good idea to undergo routine health checks performed by a third party for a second set of eyes.
In summary, while it is helpful to focus on minimizing the risk associated with a Microsoft SPLA audit, service providers can also gain a lot from doing a proactive assessment to see if their licensing is fully optimized or if they are overspending.
How Can We Help?
Anglepoint can manage the entire monthly SPLA reporting function for you. We also provide SPLA Reporting Health Checks designed to identify your exact usage, any variance that exists, and provides quantified recommendations for both cost avoidance and savings. Contact us today to find out if your organization is giving your profits away to Microsoft each month and if so, how to fix that!