As you may be aware, we have permanently pulled all Windows Servers and related Microsoft products from our inventory. While there are many reasons for this decision, they all stem back to one primary; licensing disagreements.

Microsoft created “SPLA” (Services Provider License Agreement), a programme which legally allows software and hosting providers to rent and lease Microsoft and Windows services to customers for commercial gain and benefit. Under the regular License Agreement of most or perhaps all Windows operating systems, one nor one’s company is allowed to use a regular retail license for rental or lease, and by doing so would render the license just as invalid as a pirated or stolen one.

So SPLA, on paper, is a really simple programme; Microsoft provide a downloadable list of their products and services, and accompanying dedicated license keys for your organisation. Then, on a monthly basis you pay Microsoft an invoice for the products and services you (and/or your customers) have used. Sounds ever so simple, but in reality it’s nothing like that.

Firstly, you need a SPLA partner. You can’t pay Microsoft directly, for some absolutely idiotic reason no doubt, so you need to pay a third party on Microsoft’s behalf, who will then pay Microsoft directly. That obviously means the SPLA partner is adding their cut and cashing in on the situation.

Next, SPLA is “trust” based; though Microsoft can see how many times you’ve used a product, you need to manually inform your SPLA partner of your usage. That means at the end of every month you need to do a head count of usage – products, services, addons, locations of product use and so much more. Every, single, month. Once you’ve got your count, you report that to the SPLA partner – within 7 days of the following month I may add, else your agreement is nulled. Then your SPLA partner sends an invoice, by paper, which is payable within 14 days – however the invoice takes 7+ days to arrive with you. GREAT.

So, this “trust” thing. Microsoft perform periodic inspections of their SPLA customers’ usage. What happens if you’ve missed a few products from your headcount every month; you’re forced to pay the full fee, backdatable by up to 3 years. What happens if your customer is using services outside of their agreement with you? You’re forced to pay the full fee of their usage – even if you didn’t know they were using said services so therefore either take the direct financial hit or have some agreement in place with your customer to screw them over on demand.

We wanted to provide Hosted Desktop solutions based on Windows 7 and Windows 8 products. Should be possible with SPLA right, the specially designed programme for things of this nature? Big fat nope. It’s as good as impossible to rent or lease Windows desktop versions for commercial gain. Furthermore you are not permitted to provide ISOs for customers who wish to host Windows desktop operating systems under their own license.

Microsoft have their VLSC (Volume Licensing Service Center) which contains a list of products, your company keys, and a link to download relevant products for use. For us, the download feature was permanently broken so we were never, ever able to successfully download any product. We contacted the helpdesk about this, who gave us troubleshooting instructions that wasted over 9 hours of our time without success. They then asked us to e-mail a 180MB log file to them, when their own inbox would only accept messages with attachments up to 100MB in size.

We’re a cloud hosting company and we provide IaaS solutions. Microsoft also do this directly under their “Azure” brand. That makes Microsoft a direct competitor to us, except Microsoft’s Azure has no Windows licensing fees to pay and therefore has a much higher margin than we do. How are we ever to profitably compete? Microsoft have got this whole licensing malarkey ass-backwards and in the short time we were partners, things took a rapid decline. I formally despise Microsoft’s SPLA programme.


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