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.

The Benefits of Voluntary SAM & Licensing Reporting

First of all, it has been an interesting journey during my SAM career to get to write this post…because I have spent so much time helping companies and organizations “clean up the house” and get compliant, manage their applications and protecting them in the way of being always ready for software audits. But like the best things in life the journey does not have an end and is the ride that makes it great.

In the SAM World the ultimate efficiency is to manage applications from the deployment of images to usage control with compliance in between. It is precisely on this SAM ultimate efficiency that allow us to be more proactive in order to not only be ready for software audits but also to advance the reporting to a vendor before reaches to audit… I know, I know, sounds sacrilegious.

Let us put together this scenario: one organization uses a SAM governance management for all applications, policies and procedures are well-defined, smooth and there is compliance control. To “cleaning up the house” is easy and give it a year to achieve the optimal position. It is now a matter of maintaining, adapting and advising. It is then that risks are fully controlled towards software audits. And the services are rendered by a certified and recognized independent SAM consulting firm, not by a reseller. Imagine then that the organization reports voluntarily their compliance that includes deployment information.

Benefits:

  • Vendor does not have to list the organization on the black list
  • The organization tracks reports delivered to provide “good faith” to auditors and avoid their time-consuming engagements
  • The organization is motivated and keeps SAM governance live, active and constant maintaining compliance to optimal levels
  • Vendors provide funding for voluntary reporting, services by the SAM consultant may be partially covered if not paid in full.
  • SAM consultants can focus on the upcoming projects, working with IT architects and other to prepare for changes and ensure healthy delivery and compliance as per the established road map.

What we need is an alignment between the vendors, the SAM consultants and the customers. It has to be driven by the Vendors primarily, creating clear programs of audit protection by voluntarily reporting, enabling independent SAM consultants to provide a level of trust and optimal reporting acceptance. And this is out of the scope of the True Ups and Renewal typical reporting,,, Cloud subscriptions actually fit well on this model as usage can be controlled by the access to the applications from the vendor, but more than ever, the reality of Hybrid Cloud could benefit this approach tremendously, increasing the trust between all parties involved.

Just a thought…

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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EA transition to Office 365… time to discuss

There are two ways to move your Enterprise Agreement (EA) to the Office 365 subscription

Obviously is an important topic these days as it is difficult to understand how you will be able to continue your EA investment and control costs during your way to the Cloud.

Every Office 365 plan as an equivalent on the CAL side to your EA, if your EA includes CALs. If you transition to an equivalent during the term then there is no increase of cost. However if you transition to an Office 365 option that includes more than your current EA you will incur into additional costs however highly discounted.

So basically there are two options for you

  • Move to Office 365 on equivalent subscription and continue annual payments until renewal
  • Increase licensing at a discounted price

True licensing experts could help you on the transition (ask me how @mslicensing or email me)

it is important to evaluate what can go Office 365 and which licenses will have to remain on the EA, specially if you create a hybrid model on your infrastructure.

All is possible…

 

Audited!!!! the balanced role of the licensing professional

Audited!!!! the balanced role of the licensing professional.

As a non regulated profession you find many types of licensing professionals, read my previous blog Types of licensing Professionals

Time and time again I have been engaged to consult on an audit that is requested right after another licensing professional involvement, specially from a vendor. Audits made on the suspicion of non compliance are normal these days when more software vendors are fishing for dollars disrupting with inquiries even the smallest of the companies.

It may not be the licensed professional fault at all that a company gets audited, however certain good practices can be established upfront:

  • The clarity of commitment to represent a costumer or a vendor
  • The clarity before  the customer and vendor to find the right solution
  • The explanation of duality of representation when exists.

The reality is that a narrowed minded vision on a licensing professional can harm as the advice should not be bias to certain goals, and it is key to establish trust and reputation in order to succeed and provide the right solution and advice to an end user costumer as well as the vendor.

Vendors should also understand that independent licensing professionals also work in the partner ecosystem and the best solution for their customers is the ultimate goal.

Specially the duality of representation is common in licensing engagements. A clear understanding on dual representation should be upfront and explained to the customer. I was reading a dual representation document that could help on this kind of situations, taken from real estate example that i edited as if it was for a licensing exercise:

“With regard to client confidences, each of you (Vendor and customer) should realize that the licensing professional cannot keep
information confidential between you, since the licensing professional is serving both of you. Therefore, by
requesting dual representation, each of you is authorizing the licensing professional to reveal each of your
licensing information, contents of documents and other disclosures and information to
the other.
After considering these factors, each of you must decide whether the licensing professional will continue to
represent both of you in connection with your licensing exercise planning, renewal or audit and related matters. If in the future
either of you wishes to have the advice of a separate licensing professional, you can do so.”

I think we apply the old rule that the costumer is always right…, (plus presumption of innocence, ) and regardless of being in two sides of the coin a licensing professional can dedicate the talent to the client with a balance for the vendor if has the right approach for both.

 

Office for Home & Student cannot be used in a Business

Office for Home cannot be used in a Business
the Terms and Conditions are clear, and with the upcoming release of Office 13 that will surely have a free upgrade path buying a PC in the next month or so some businesses may delay pc purchase
Volume Licensing with Software Assurance will grant the upgrade right for businesses.
I recommend a quick read to the following blog

 

Home and Business edition has no limit of users but cannot enjoy Volume Licensing rights for imaging for example.

Be careful with what you buy
http://blogs.msdn.com/b/mssmallbiz/archive/2008/12/01/9160762.aspx

Windows 8 Release, High Expectations, Not Vista.

Windows 8 on the big screen!

Windows 8 Release, High expectations, not Vista

Twitter users can be deceiving, is a global conversation anyways so you get every kind of opinion and that is the beauty of it.

Now, if we are rational about Windows 8 release what kind of things we can expect from Microsoft windows 8 release?

  • That is not Vista: so there will be no push for getting out of Windows 7 as soon as possible, like Vista tried with XP
  • That is multi device, built for the new OS demand, tablet/phone/pc
  • That is made to gain the hearts and minds of consumers more than IT professionals: because the home use is dictating and will dictate IT needs in organizations with the millennial generation

So with this things in mind better or worse than Android or iOS one things is certain, windows 8 brings the modernization of Microsoft to copy best practices from competitors such as Apple and the ipad device, as Microsoft is releasing their first tablet the “Surface”.

Where the power relies is on the integration of applications that are made for windows by Microsoft itself. It is the great integration of applications that will make windows8 successful towards others, and it will gain momentum in the corporate world first.

Yes the tile format offers a different approach to the user and may be likeable or not, I have no doubt it will be criticize however I think that is for Microsoft a step in the right direction

I would like to notice that the license is available in the usual channels and also in the Intune subscription, this interesting move makes me wonder how “device free” this is becoming, is a shift on licensing mentality that I welcome as will bring more possibilities to the market