A professional business does not use
grey market licenses. Yes, you should switch to Linux so you can “get
what you pay for” and not whine about it.
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED] On
Behalf Of Matt
Sent: Saturday, March 11, 2006
8:34 PM
To: [email protected]
Subject: Re: [Declude.JunkMail]
OT: Microsoft Open License
Robert,
I think that did a good amount of research and I do in fact have my facts
straight. It appears rather that you just simply didn't read my message
fully.
At this moment, SPLA isn't a good deal for me, though I recognize that in some
situations it can be.
I like to buy full retail versions of Windows in the gray market of eBay, and
when you compare gray market prices to SPLA, the gray market compares much more
favorably when you are buying for yourself. I also have been basing all
of my servers on dual processor systems as a way to maximize the value of the
software running on them, and the terms for dual-processor licenses under SPLA
is not competitive whatsoever for servers. In my original reply, I linked
to a pricing sheet that is freely available from the public website of one of
Microsoft's two main suppliers of SPLA licenses, so I am in fact aware of the
prices.
As I said before, this is something like the third iteration of a pay-as-you-go
licensing scheme by Microsoft in just 5 years. In fact, up until last
year you also had to be a MCP and join the Microsoft Partner Program at
$1,500/year. For a small hosting provider, adding that cost overhead and
time to one or a few licenses makes it cost prohibitive. While they did
change this, they only did so recently, and parts of their site are still out
of date with the changes. The frequency of changes and their admission on
their own site that they screwed up badly in the past by having confusing terms
and uncompetitive pricing doesn't make me feel at ease with this. I also
don't like grossly uncompetitive markets such as limited availability and a
requirement for membership in three different Microsoft programs. By
limiting access to primarily two resellers of SPLA licenses, they have also
created an anti-competitive market. I also don't work for Microsoft, and
I don't wish to be reporting back to them or their partners on a monthly basis
for the type of operations that I currently have.
Microsoft didn't create SPLA to lose money. Part of this was due to
competitive pressures from the low overhead of a rapid Linux build-out in bulk
hosting, but another part of it was clearly to establish a method of charging
based on the success of their customers (per-processor licensing) instead of being
based on the software's capabilities itself, and to force more rapid adoption
of their latest technologies by removing the asset of purchased software and
lowering the overhead to upgrading. Unfortunately for Microsoft, Windows
2000 still works great as a Web server 6 years after it's release. If
Microsoft wanted to stay competitive in all senses, they would have made SPLA
completely optional as far as their EULA goes, but they purposefully change
it. This change was anti-consumer. I don't like anti-consumer
changes.
I'm considering SPLA for possibly doing some managed server co-location because
I recognize the high upfront costs and competitive pressures where some expect
their colo to provide such things in one package. I agree that SPLA makes
perfect sense for single processor servers leased in bulk to customers.
For my own servers however, I already own licenses for everything and I would
definitely be paying substantially more with SPLA over the life of the software
under the present terms. I purchased my retail versions of Microsoft
software to be used exactly as they were clearly and consistently represented
to me by Microsoft, and I will continue to use them that way.
In the mean time, I am going to start working on getting a Linux hosting environment
going because I don't want to get trapped by Microsoft's licensing going
forward.
Matt
Robert E. Spivack wrote:
Matt, get the facts before you “rant”.
If you are running a business then
you should be adhering to the rules. I can’t believe you have been
hosting sites/email services for so long and not been aware of SPLA.
I think your rant is totally
offbase. Let me give you (and others lurking) the overall view:
- The
SPLA is an incredibly great program for service providers (which you
are). It allows you to completely avoid buying expensive software
upfront and is entirely a pay-as-you-go program.
- For
those not familiar with it, you report to Microsoft on a monthly basis
what product licenses you are using and you pay only for the licenses in
use. Specific example: You are a small hosting company and
land a client that wants a dedicated server with dual Xeons running SQL
Server 2000 or 2005. With a retail license (which isn’t legal
for hosting anyway) you would have to immediately go and buy a
two-processor license for SQL Server. At “going rates”,
that is approx $10,000 retail (before discounts). Now, after two
months, that client goes broke, can’t pay their bills and
obviously cancels their contract (or you cancel it for default). Now
you are stuck with $10,000 of software and no cash. Under SPLA, you
would simply report to Microsoft that you are no longer using the license
and pay nothing to them anymore.
- Although
the pricing for SPLA is not public, it is widely available but I
won’t give the actual pricing here to avoid any problems.
Suffice it to say, the pricing is very reasonable. Basically,
Microsoft has taken most prices and calculated a monthly fee based on the
equivalent software price divided down over a 3-year period. Since
most financial types will depreciate software as capital equipment over a
3-year useful life, you can see that the “high level” pricing
philosophy used here is very reasonable and is not a gouge nor is it a
huge discount that is unfair to corporate or enterprises buying
retail. Of course, an important distinction is that you pay SPLA for
as long as the license is in use, you never “own” it so you
don’t stop paying after 3-years. But given the churn and business
conditions, along with the fact that software versions change more rapidly
than 3-year terms, I don’t see this as having any practical
financial impact.
- Microsoft
created the SPLA program to make expensive, enterprise class software
available legally to hosting companies that are small and entrepreneurial
and not just the big telcos. You can get almost ANYTHING on
SPLA. BizTalk Server, Content Management Server, Exchange Server,
and many other products without investing $50,000 or more in licences if
you bought retail or open license. Anyone that thinks this program
is bad needs to close their business and flip burgers or something else.
- Unlike
all other licensing options (retail, open corporate license, etc.) there
is no volume discount with SPLA. This totally blew me away when I
first heard it. Yup, that means the price we pay per month for
Windows OS or SQL Server is the same price that Rackspace, EDS, IBM, or
ATT pays. So when you see the price list and look at offerings in
the market, you can get an idea of what the gross margin must be for
someone selling a cheap server for $50 or $75/month with (legal) windows
OS included.
- Unfortunately,
within Microsoft, the SPLA program is “small” compared to many
of their other business lines. This means that many Microsoft reps,
especially those that sell retail or corporate licenses do not know much
about it and often give out conflicting info. If you’ve ever
worked in a big company (and I have worked in HP, Cisco, etc.) you will
understand that salespeople in these bigger orgs are completely comp plan
driven and only know/push/sell/understand the limited portion of the
product line that affects their own paycheck. This is not unusual.
- There
is a dedicated, hardworking, and motivated “SPLA” group within
Microsoft. Visit their website and drill down, or call your regional
Microsoft Office and get connected with them. They are the ones that
can answer all your questions and clarify any confusion over licensing,
costs, and participation. Bottom line – do not ask any Microsoft
employee about SPLA unless they are directly involved – the info you
get will be wrong, erroneous, and conflicting at the least.
- Microsoft
has changed the program to allow small companies to qualify as
“windows hosting” without needing the cost and time of having
MSCP engineers trained, certified and on staff. You also do not need to be
a certified partner – you only need to be a registered partner which
takes only a few mouse clicks – no annual fees.
- Logistically,
SPLA licenses use VLK (volume license keys) so you can use enterprise
tools for imaging systems (SYSPREP) and deploying new servers quickly
without the hassle of “product activation” that is part of
retail software licenses. You can also give 30-day trials to your
customers, and no, running IIS does not require a client license for each
anonymous user.
- Microsoft,
as far as I know, has not taken legal action against anyone hosting using
retail or enterprise licenses. I’m sure their strategy is to
use the carrot and not the stick. In the big picture, they want to
encourage hosting companies to use the Microsoft stack instead of the open
source LAMP stack. Making legal licenses available pay-as-you-go,
providing extensive free marketing and tech support, and otherwise nurturing
hosting and service providers has been their approach.
- I
don’t work for Microsoft; I don’t get commission on this
stuff. Just a happy customer trying to debunk the FUD that some
people spread about the SPLA. There’s enough stuff to
complaint about; SPLA is not one of them.
Shayne (and Kevin),
Rant = on
I see now that under the SPLA program, they seem to indicate in a very
round-about way that you have to use SPLA, in fact, you have to purchase a
separate license per processor for anonymous access to IIS over the
Internet. What a crock of s#*t that is. This is the third such
program that I recall seeing Microsoft push on the down-low trying to claim
some sort of special fees for using IIS on the Internet. It is clear as
day that they don't market their product in a manner consistent with the SPLA
program. They updated their EULA however to include the following;
"Renting, leasing, or lending the Software (including providing commercial
hosting services) is also prohibited." This means that everyone
using IMail, SmarterMail, or whatever app that runs on a Windows platform and
is accessed over the Internet must switch to SPLA and pay a per-processor
monthly license if you provide services to anyone that is not a part of your
immediate company.
Shrink-wrapped agreements like this aren't by default legally enforceable,
especially when a product is marketed one way and the license says
differently. The idea of prohibiting use simply by way of the type of
entity and not the functionality appears to be unfair price competition, and
based on what 99% of the market does with their software, it may not meet the
legal definition of "unconscionable", making that part of the
contract void. The retail software is not labeled "for hosting
providers" and "for single entities", in fact they only offer
one box, and clearly market the software in that box for hosting Web sites, and
they widely make no distinction as to hosting or single entity use (except for
the SPLA site). Limiting fair use outside of industry norms would have a
hard time surviving in court under a shrink-wrapped license. Microsoft would
also have a difficult time proving harm by using retail Windows Server software
by hosting providers.
To go another step further, Microsoft requires you to be a MCP before you can
join the Microsoft Certified Partner program, or at least one part of their
site says so, and that requires testing and $1,500/year, but in another part
they say that you can be a Microsoft Registered Member and Microsoft Partner
Program Member and qualify. This should be considered an "adhesion
contract" since previously a single copy without a doubt required an
expensive yearly membership and training, and submitting to even more terms and
conditions like agreeing to be audited at the drop of a hat. Clearly they
haven't worked it all out for themselves. In the following article linked
to from their own SPLA site, they admit to at least past issues:
http://download.microsoft.com/download/b/9/b/b9b1f066-51c3-4983-9c53-e65ebe104abe/08-05-02_SummitVision_Microsoft.pdf
"In other licensing-program changes, Microsoft has simplified its contract
language, which the vendor thinks will improve compliance with its terms. Even
Microsoft admits that the first version of its license was so confusing that
SPs often didn’t know if they were in compliance or not."
Again, it's a crock if they want to try forcing this
upon SP's. Essentially they are saying that anonymous connections to IIS
need a special license now, and occasionally in the past when they could figure
out what their own licensing says or means, but only when you are providing
services to third-parties. Of course that also means that they sell
Windows Server Web Edition, but you can't use that for hosting Internet Web
sites for anyone except yourself unless you get it under SPLA. I think
not. Or how about any E-mail, FTP, DNS, Web server, etc. that runs on top
of Windows? They might want to claim that this is the only legitimate way
on the SPLA site, but the reality clearly is that hosting on the Internet does
not require SPLA, even if you sell services, otherwise thousands of companies
products and millions of their customers would be running on top of an
illegitimately licensed OS. It suggests that products such as Commerce
Server can't be bought at retail and used on the Internet, and it suggests that
the SQL Server per-processor licensing is only for intranet use even though
they clearly state that the license is most appropriate for Internet use and
make no differentiation among the type of entity, nor do they attempt to make
you aware of SPLA. Not enforcing the terms, nor providing for even basic
awareness of the 'proper' program could also make it unenforceable. I
think that I'm done...
Comments on forums are all over the place on this. One claimed for
instance that a MS rep from the SPLA program told him that SPLA was only
required if you leased servers to third-parties, but not for providing hosting
services. I'm not even sure that they can force that as a
condition. Clearly SPLA is optional, at least from a legally enforceable
standpoint. I would not put it past Microsoft to try claiming something
that they knew couldn't be enforced, and that they wouldn't even try to enforce
it despite their claims This thread pretty much sums it all up:
http://forums.webhostautomation.com/viewtopic.php?t=13929.
Microsoft's reps still don't know what's going on, and the story also changes
depending on which page on their site you read.
I did find the pricing sheet from who apparently a leader in SPLA licensing,
Software Spectrum:
http://www.softwarespectrum.com/microsoft/Advisor/docs/MS_SPLA.xls
The prices are reasonable at these levels if you are using single-processor
machines and stay away from licensing SQL Server this way ($169/month, but they
sell a per-processor license at retail that goes fairly cheap in comparison on
eBay). Windows Server Standard 1 Processor goes for $18/month, and that's
a reasonable price since it is about the same cost over 3 1/2 years for their
retail software. The low upfront costs is a benefit for a single processor
system, but it is not competitive for a dual-processor system. I'm going
to keep this in mind should there be a opportunity to use this model (leased
servers, big build-out), but I think I am going to start investing more in
Linux due to my fear of my business getting trapped by a monopoly of this sort
that changed their offering multiple times over the last 5 years.
Thanks for the info.
Matt
Shayne Embry wrote:
Matt,
I think as you continue your investigation you'll find that Microsoft states
the only type of "legal" licensing for hosting services is the
Service Providers License. We discovered this not-so-well publicized fact last
year. It requires a monthly licensing fee. I won't go into all the details here
(I'm at home and don't have convenient access to info at my office), but
it could very easily cost you more depending on your situation. MS SQL can
definitely take a painful bite out of a budget. It's different from the
Open License program, which we also did about four years ago.
If you don't get some answers elsewhere, please mail me off list and I'll try
to get you more details on Monday.
Shayne
From: Matt <[EMAIL PROTECTED]>
Sent: Friday, March 10, 2006 6:19
PM
To: [email protected]
Subject: [Declude.JunkMail] OT:
Microsoft Open License
I'm considering changing over to Microsoft's Open License program, but I
haven't actually spoken to a reseller yet about the terms. I'm hoping
that someone here could give me an idea about the prices that one would
pay for Windows 2003 Standard and MS SQL 2000 for around 5 to 10 total
licenses. Currently I own full retail versions of all of my software,
but it seems that there might be a better and more flexible way to do
this, and I might be able to convert my current licenses (???). This is
a hosting setup and not a workplace installation. I have seen talk of
prices at around $12/month for Windows 2003 Web Edition, but I am not
sure what the rest of the pricing might be.
Please respond off list if you don't feel it is appropriate for a public
forum.
Thanks,
Matt
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