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Hmmm? Why not? If it is a legal license (i.e.
no restrictions on licensing transfer from the manufacturer), then this
generally just voids any warrantees or support contracts. If the software
works and you can support it yourself then again, why not?
The same applies to hardware. We've purchased
quite a bit of used servers and network hardware, all same models for
interchangeability, and have an inventory of spare equipment/parts for
emergencies, etc. We know the equipment well so support is not
needed. That has been significantly cheaper for us than purchasing new
equipment for equivalent performance.
Remember, support contracts are effectively an
insurance policy. If you're risk is negligible (due to expertise,
redundancy, spares, etc.), then grey market can work just fine. For server
hardware and some network hardware, BIOS and driver updates are generally freely
available. For the OS, patches and updates are also
available.
There's nothing unprofessional about managing your
risk equivalently/differently. Not addressing and managing your risk in
accordance with your TOS... that would be unprofessional.
Darin.
----- Original Message -----
Sent: Wednesday, March 15, 2006 1:35 AM
Subject: RE: [Declude.JunkMail] OT: Microsoft Open
License
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 cant
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 isnt 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, cant
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 wont 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 dont 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
dont 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 youve 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. Im 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 dont
work for Microsoft; I dont get commission on this stuff. Just a happy
customer trying to debunk the FUD that some people spread about the
SPLA. Theres 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
didnt 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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