The CSP Licensing Business Model

A few years ago I had the opportunity to start a full LSP (licensing service provider) licensing business from the very beginning of licensing activities and growing the business with a licensing business model. Later on I repeated the process in MSP and VARs especially for those who had the desire to grow their Volume licensing business. And now the change towards Cloud licensing especially with the CSP program has given me the chance again to work on licensing business models transformation, for this reason I thought was relevant to comment on the CSP licensing model concepts that all CSPs should assess.

Adapting to a Cloud revenue business model is not an easy transition and sales teams, business owners and many others are reluctant to change the traditional transactional model to a subscription based model, but obviously signing to the CSP program is already a commitment towards applying the necessary changes on the business model required.

CSPs must be “licensing ready” and should assess the business to successfully plan activities: knowing about licensing is not enough, controlling subscriptions, transitions from volume licensing to subscription licensing, client ROI impact and SAM maturity, between other topics,… all is essential to all CSPs…

Some questions to resolve: has the CSP a volume licensing or hosted licensing business in place? What is the CSP licensing selling strategy? Is the CSP reactive to renewals? How successful it has been to capture net new Cloud clients? Is the CSP in a position to sell Office 365 or Azure Services? Is there sales team members knowledgeable enough to offer Cloud subscription models? Can you transition from SPLA to other cloud licensing? Is the sales team incentive align with the achievement of new monthly recurrent revenue? Has the CSP SAM services at all? Is the CSP SAM service aligned with client expectations or works just as a necessary exercise due to partnership obligations for audits? How many current clients versus net new are required to obtain to keep CSPs revenue expectations?

The end goal of any assessment exercise towards licensing sales business is to create a strategy for sales and operations that can capture clients and operate efficiently to create revenue. Some CSPs plans have not contemplated all risks, for example:

Many CSPs are finding that some sales efforts are futile with clients that transact with Enterprise Agreements via qualified resellers or LSPs (Licensing Solutions Partners), it is necessary to know how to pick the battles and be ready to fight the arguments of licensing agreements, making sure that clients don’t get involved between the subscription margin fight from the different resellers and see the services value as the true differentiator. As it is today between CSPs and LSPs with CSP expectations (all of them) the battle for the Cloud is on…

Assess, plan and get the right licensing trusted partners and distributors. Get the right SAM independent partner (you can always ask me for their names), be familiar with distributors CSPs advantages and get yourself ready to get into the wonderful world of software licensing in the Cloud era.

Let me know if you require more information for your CSP plans.

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The time of change is now: the impact of the CSP program

It has been a long time since my last post. Finally I decided to change the route of the blog as per this critical time in the IT industry…

Cloud is to stay, we know that, as well as in the most mature markets its consolidation is a growing. For the last few months I have observed merges, acquisitions and business owners on IT either changing pace or getting out… And as the maturity of the Cloud progresses and the barriers of Enterprise clients towards Cloud are demolished Software Asset Management (SAM) and licensing have adapted to the new models. However we are now looking at even another big game changer, the CSP program.

The CSP program (Cloud Solutions Provider) launched by Microsoft will define those Microsoft partners investing into the Cloud to those that aren’t. And like any other critical program it comes with requirements, licensing achievement requirements, in other words… sales.

More than ever a level of licensing and SAM understanding is going to be critical for the CSP program. And for this reason the blog will change to reflect that level of help for CSPs required for any company that becomes either a Tier 1 or Tier 2 CSP a successful Cloud engine that brings more opportunities and is able to compete versus the Goliath, create more value to their customers and evolve as a company to the so desired MRR (monthly recurrent revenue) MRR achievement.

As an example, Cloud licensing models offer more flexibility to chose resellers and CSPs will fight for clients with Enterprise Agreements to consider the options beyond the Licensing Service Provider (LSP) resellers. As customer chose trust versus transactional administration for the Cloud significant changes are in place and more coming to open the battle for the subscription licensing offerings. And all players are involved, as distribution channels also look to reinforce the CSP program across the world.

Past posts keep their value as reference of licensing times and seasons, rules and changes and first impact of Cloud computing reflected on them. It is time for the Licensing Guru to add more content as we walk together to a brilliant Mobile first and Cloud first era.

Josef Hans Lara

The Licensng Guru.

Licensing the Cloud with Microsoft.

To subscribe to the Cloud directly is easy, is a simple transaction based on consumption, however the co-existence of old traditional Volume licensing, or Service Provider licensing programs with the new Cloud subscriptions is not that easy. In fact to make sure that new benefits for the Cloud enablement like the Software Assurance Mobility Rights are properly used requires attention to the licenses allocated to the servers on Windows Azure, for example. Understanding the real rights and possibilities is another variable to contemplate when measuring compliance.

Hosted providers do not offer much guidance with respect of what their clients can allocate on licensing into the Cloud environments, and is often a conflict of responsibilities when the vendor audits the hosted provider or the end-user client.

In the Microsoft Product Use Rights for example we can observe the limitations of the licenses covered by SA with respect to their Cloud options with the Mobility Rights: (see table below)

Understanding the right coverage of the license is important in order to maintain not only compliance but also to predict Cloud budgets.

Clients with an Azure consumption negotiated on their Enterprise Agreement can use any of the services and increase without difficulty, and as they evolve using the Cloud services will be important to understand the ROI of the existing licenses versus the newly consume and fully subscribed licenses. In a way Cloud has enable transitions of existing licensing investments however at the same time is creating a conflict:

Is the Cloud subscription directly on Microsoft Azure a better option than the SA Mobility Rights?

As prices vary, the Cloud footprint extends and upgrade cycles arrive, the SA renewal will be confronted by the commitment to Azure subscriptions in a way that customers will choose one or the other.

For Microsoft clients using other third-party hosted providers the question is:

Have I allocated the compliant rights of use on the Cloud? and if I consume SPLA, is my hosted provider compliant? Am I compliant? Or am I at risk due to hosted provider error?

I can confidently say that Software Asset Management has become more relevant in the Cloud era.

(SAM Mobility Rights table as per PUR July 2014)

PRODUCT LICENSINGMODEL PRODUCT OR PRODUCT TYPE LICENSE PERMITTED NUMBER OF OSES PERLICENSE/PERMITTED NUMBER OF

CORES PER LICENSE

Server/CAL External Connector Licenses Each External Connector license with active Software Assurance coverage 1 OSE per license
Server/CAL SQL Server Each Server license with active Software Assurance coverage 1 OSE per license
Per-Processor All eligible Products Each Processor license with active Software Assurance coverage 1 OSE with up to 4 virtual processors per license
Per-Core All eligible Products Each Core license with active Software Assurance coverage One virtual core (subject to the Product Use Rights including the requirement of a minimum of 4 cores per OSE)
Management Servers System Center ServerManagement Licenses

(versions prior to System

Center 2012)

Each Server Management license with active Software Assurance coverage 1 Managed OSE per license
Management Servers System Center Server Management Suites Each SMSE or SMSDlicense with active Software Assurance coverage 4 Managed OSEs per License
Management Servers System Center 2012 R2 Standard Each System Center 2012R2 Standard Server Management license with active Software Assurance coverage 2 Managed OSEs per license
Management Servers System Center 2012 R2 Datacenter Each System Center 2012R2 Datacenter Server Management license with active Software Assurance coverage 8 Managed OSEs per license
Management Servers Visual Studio Deployment 2013 Standard Each Visual StudioDeployment 2013

Standard Server

Management license with active Software Assurance coverage

2 Managed OSEs per license
Management Servers Visual Studio Deployment 2013 Datacenter Each Visual StudioDeployment 2013

Datacenter Server Management license with active Software Assurance coverage

8 Managed OSEs per license
Specialty Servers HPC Pack Enterprise Each Server license with active Software Assurance coverage 1 OSE per license

 

The New Order of Software Asset Management (SAM) in the Cloud era.

The New Order

Microsoft is definitely the great influencer of Software licensing; when Microsoft develops and promotes new rules may other vendors follow. During this last World Partner Conference, that just happened in Washington DC, I observed the influence of Cloud now directly affecting the Software Asset management (SAM) approach.

Cloud and SAM

Not long ago I was questioned by other SAM peers on my approach towards Cloud and SAM, the interaction of the old licensing models affected by the new subscription models seemed for some the end of the need of the licensing advisors, however I always thought it was only an adaptation of the SAM knowledge towards new exciting models to compliantly license software.

Microsoft is going all or nothing to the Microsoft Cloud offerings, I am glad that my guess has been right for so long with respect of being aware on how to measure, what to investigate, and how to determine the right Cloud licensing solution, because now SAM has to fulfill the qualification to move the right IT budgets towards Cloud in order to fulfill the great demand and transformation that Cloud is making in organizations everywhere. SAM has now a special role in regards to Cloud, it has to monitor the usage, contemplate the rules and repurpose licenses for an optimal transition.

SAM and Services

Some SAM professionals identify their task as auditors as the more relevant with respect to the services thy offer. However I disagree, in fact SAM has to be hand in hand with technical, and business assessments to actually not only portray a licensing position but to guide any organization to transformation. The new era of SAM services has to require a true alignment between business goals, technical requirements and licensing.

 

SAM 2.0

SAM is now critical in order to govern software and identify the possibilities of Cloud computing, outsourcing databases, access to BI integrated products, assessing security tools and allowing a new perspective of IT expenditure that walk with business objectives. The New Order of SAM services will create once again a differentiation between those that will be stuck in the old reseller ways, just contemplating the exercise of an audit without any other variable added, and those that understand the new realities and needs of IT on today’s market.

 

IT is truly a great moment for SAM services that can play a significant role on the era of Cloud.

The Cloud and the New order of Licensing and Software Asset Management #WPC14

July is an important time for Software Asset Management (SAM) as the Microsoft World Partner Conference (WPC) kicks off with announcements and news. Microsoft licensing is definitely a great influencer to all vendors on compliance rules.

There is expected content on SAM processes according to Microsoft to discuss on this 2014 edition of the conference and one or two expected announcements on Azure and other Microsoft Cloud.

We are arriving to a time of Cloud offerings consolidation. After observing constant changes on office 365 and additions to services offer through Azure it is time to finally elaborate transition plans for licenses to be moved to the Cloud, reconcile with SPLA (Hosted-Service Provider Licensing Agreement) and traditional Volume Licensing investments that have the reign for the last two decades.

As consuming IT is the actual trend and desire, it is expected for the licensing models to quickly offer transitions for compliance towards all Microsoft Cloud products.

The expectation is to finally observe consolidation on subscription models and more governance of SAM dedicated to Cloud offerings.

As the partner ecosystem also evolves to develop Cloud solutions of their own, licensing models like SPLA are getting more and more licensing in production environments. At the same time is not any more about going Cloud but about securing, developing and managing the Cloud. These has made SAM more relevant than ever as Application Management has to respond to the different scenarios that companies use today, a mix of applications in the Cloud with Private/Hybrid and Public Clouds.

The Licensing Guru will update after WPC on findings and relevant information to the readers.

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You will be Audited

Sounds like a title for a doomsday licensing movie… however besides the dramatic title it is very certain that if you are an organization using software, specially from the usual suspects: Microsoft. Adobe, Oracle, IBM… you will be audited!!!

Is written on the terms and conditions you may have not read when deploying the software, or on the contract the reseller provided you to sign. And as a practice to ensure compliance the software vendors periodically will request from you licensing information to make sure everything is alright.

Now… to fall in non-compliance situations is very easy:

  • Many software vendors don’t restrict the use of software to avoid misuse.
  • Many organizations don’t track licensing use and compliance with Software Asset Management Tools
  • Licensing rights, terms and conditions are subject to change, and they change often!.

For this reason through AMTRA Solutions and its partners, plus this blog I will start a campaign of awareness and practical examples plus Q&A to help you be prepared and ready with the information gathered from my experience. I consider that a “fair trial” has to be performed when all parties had fully knowledge of consequences and clear understanding of complexities. Stay tuned for more content and invitations to listen and see coming up.

Cheers

The Licensing Guru: Josef Hans Lara

Get ready for a Licensing Audit and get the vendor to fund it

Certified companies for SAM services like AMTRA are able to prepare companies and help them to pro-actively report their licensing status to vendors.

In the case of Microsoft, the SAM team partners with clients to get compliance ready in a friendly engagement that distance itself from the traditional audit approach that takes so many IT leaders by surprise.

Some vendors divide the exercise of hunting for compliance issues in two categories:

  • Soft Audit: just requesting general information on existing installations
  • Audit: full analysis and reconciliation of the client using the empowerment of the agreed terms and conditions (that normally no one takes in consideration until the vendor shows up)

However Microsoft has changed the pace of these engagements by allowing clients to proactively report, and experience shows that the “friendly” gathering and reconciliation of the data helps organizations to fix issues and arrive to better agreements when they willingly and proactively approach the vendor, it is called “Baseline”.

For this reason the Baseline SAM services for Microsoft could also be done using a pool of funds to help clients to fulfill these task, plus they also help clients to Assess and deploy SAM Services. Only a few companies are able to provide these services, and as mentioned AMTRA Solutions is one of them, servicing clients globally.

What is left after the exercise is a full understanding of the licensing compliance status. Now these by itself is useful for the vendor however the organizations can have these done as a starting point for a more Dynamic SAM process and assessments to truly avoid any noncompliance issue in the future.

It is key to understand and strategize SAM Baseline services as a way to get the Vendor involved and a SAM partner to help reducing typical compliance and costs risks.

For more information on SAM Baseline let’s discuss: @mslicensing @amtrasolutions

Save time, reduce costs and get compliant with Application Management

We live in an Application driven IT world.  Whether its our Cloud-based phone apps, our computer apps, or the applications in our servers and hosted datacentres, everything is moving towards applications that will improve our productivity.  Technical complexity is increasing rapidly and we are consuming more applications than ever before.

I have come to understand the value of application packaging.  Initially, I thought it was simply creating an automated process of imaging applications to be delivered. However, I have to come to realize that its a lot more than that.  Application packaging:

  •        Allows one to conform to standards despite their edition and version.
  •        Provides the ability to test applications before moving to production.
  •        Delivers the same application, yet tailored to specific needs or departments.
  •        Provides process and characteristic documentation without having to spend hours writing and collecting screen shots.
  •        Enables a licensing person, through the process, to control and manage assets (Software Asset Management (SAM)).

For this reason it is now part of what I envision to provide my clients.  That vision is to deliver a robust strategy that not only takes care of SAM inventory and reconciliation, but also goes to the root and applies application packaging best practices.

Ask me how: @mslicensing, @amtrasolutiuons

“The Guru” joins AMTRA Solutions

AMTRA SOLUTIONS appoints Josef Hans Lara as Director of SAM & CLOUDAMTRALogoFinal_FullColor (1)

“The Licensing & Cloud Guru” new addition to the AMTRA team.

Calgary, AB, March 7, 2014– Amtra Solutions appoints Josef Hans Lara as Director of SAM & Cloud. Josef, also known for his online presence as the “Licensing & Cloud Guru” through his publications, speaking engagements and social media presence will direct the Amtra SAM efforts bringing an innovative way to offer AMTRA clients the best of Software Asset Management and Cloud transformation.

Josef depth of experience started in Europe leading the marketing and sales efforts on hardware and software licensing channel and solution sales in Europe. Continued building his career in North America becoming a builder of award winning Large Account Resellers, SAM consulting services and an evangelist for Cloud Computing.

Josef vision on SAM goes beyond the standards and provides synergies between application management, IT infrastructure transitions like Cloud computing, and a full understanding of compliance for multiple software vendors. Josef’s work has given him presence and reputation in the IT industry as a leader, helping multiple industry and public sector organizations across Canada, USA and Europe to achieve compliance and embrace models to adopt new technologies, truly approaching Business Intelligence to IT SAM compliance models.

Currently is a member of the Ingram Micro Services Advisory Council North America, IAMCP Canada National Executive, SRC Technology Group BC, and serves as a volunteer economic development commissioner in Maple Ridge, BC.

About AMTRA

AMTRA Solutions is a North American leader on Application Management and IT Innovation. Our consultants are highly seasoned application packagers, developers and deployment & operations experts – each with several years of experience. They have all worked within strict and demanding environments such as Petrochemicals, Energy, Banking, Finance and the Pharmaceutical industries. We understands the importance of adherence to standards and industry regulations

AMTRA is the North American distributor of all ATEA software and services. Products include Application Manager, JumpStart, AppMarket and Service Market. ATEA is known for their high-end, high capacity client management and application packaging factory which is the largest of its kind in Europe.

If you would like more information about this topic, please contact 1-855-326-0533.