Microsoft licensing explained (a try)

Microsoft licensing is hard and complex. Many options are offered by Microsoft for the right to use their software.

It is a skill to be able to provide the best advise and to implement licensing the correct way. First there are many different agreements, plans and programs. Secondly there are many rules, small letters, exceptions and not so obvious restrictions documented in not always very well known documents.

In this blog I will provide a highlevel overview of Microsoft licensing. When you understand the basics, Microsoft’s  detailed information on all the agreements and enrollments will provide the details.

Buy or lease agreements

The right to use Microsoft software can be obtained via two ways:

  1. as a retail boxed software. Customers buy a box with the software on DVD and the license to use the software.
  2. as part of Volume Licensing. Customers receive a license. Software is downloaded from a Microsoft portal. Customers which agree in a Volume Licensing agreement get discount and other benefits.

Volume Licensing  can be either purchased, leased or leased/purchased. Depending cash position, dynamics of the organization a lease or purchase is the best option.  Agreements for organizations with over 5 computers are part of the Microsoft Volume Licensing. There are programs for organizations with 5-250 computers and for organizations with over 250 computers.

For Service Providers Microsoft has a pay-as-you-go model available. A service provider is only charged for the actual usage of a product. This can even be a single hour.

Volume Licensing has three important components which you should be aware of.

  • agreements or programs
  • enrollments
  • software assurance

An agreement is an procurement contract. In the contract Microsoft and the customer agree on many things. It has information on processes like True-Up and defines the length of the contract, the payment, term for additional product license acquisitions, subsequent orders and perpetual rights.

Enrollements are available as part of enterprise agreement and select licensing programs. Enrollments are contracts about the ordering of software. The customer promises to buy a certain quantity of software and certain types of software. In return the customer receives discount.

Enrollments are a Microsoft way to push customers to a certain direction. This can be towards purchasing Software Assurance or towards purchasing Hyper-V, standardize on Office or consume cloud services like Azure.

Software Assurance (SA) is a kind of maintenance contract. Customers have the right to use the latest version software. Another benefit is the right to move license to other servers or to cloud environments. Microsoft is constantly moving benefits which were included in the  license to SA. Cost of SA is about 25% of the license price paid each year.

For some agreements the customer can decide to buy SA as addition to the license. In many agreements SA is included. SA has been introduced by Microsoft to guarantee a steady cashflow. Before SA Microsoft got a lot of revenue after the release of a new version of software. Then the revenue dropped to be increased at the next release. With SA Microsoft monthly gets money from customers on SA.

The reference guide explains it all.

Available Agreements 

The image below shows the major agreements available to corporate . There are also agreements for government, education, charity, service providers and partners of Microsoft.

These programms are all focussed on on-premises software usage. They offer however the possibility to use Microsoft cloud services as well.

Pricing for all agreements are very different. Organizations with over 250 users/computers get a better price than those with a few users. Organizations with many desktops get better discounts than with few desktops. Schools get about 80 % discount for licenses.

To be able to start an agreement organizations must meet certain conditions. For example a minimum purchase or have all workstations installed with the latest Office version.

It is perfecty possible to have a customer use various agreements.

Microsoft license agreements

Agreements for small orgs with 5-250 computers or users 

  • Open License
  • Open Value
  • Open Value Subscription

Open License is just buying the license. This provides the customer the right to use to software as long as he wants. There is no rental available. A maitenance program called Software Assurance can be purchased if the customer wants to upgrade to the most recent version software. Software is paid upfront.

Open Value is including Software Assurance. The customer can annualize their billing over 3 years or they can pay upfront. After three year no more payments and the license belongs to the customer. Licenses can only be added to the agreement. So if your organization shrinks you might have to pay for more licenses than needed.

Open Value Subscription means the customer rents the software. When the rental period has expired and is not extended the software may not be used anymore. Licenses can be added (True Up) or removed from the agreement (True down)

These agreements can be sold by any Microsoft partner.

Agreements for large orgs with over 250 computers or users

  • Select and Select Plus
  • Enterprise Agreement
  • Enterprise Agreement Subscription

Select Plus is a purchase programm with an option to buy SA. To qualifiy for Select Plus customers have to buy an initial order of 500 points per product pool. Microsoft products are groups in three pools: applications, systems, and server.  500 points equals for example 250 Office licenses. The more points a customer has, the better discount.  More on Select Plus here.

Select Plus is being replaced by  a new agreement for midsized organisations called Microsoft Products and Services Agreement (MPSA). A FAQ here. The general rollout of MPSA licensing is planned for late 2014 which is when all enrollments will be expected to start following the MPSA model. Microsoft describes the MPSA as blending elements of the Microsoft Business and Services Agreement, Select Plus licensing and Microsoft Online Services subscriptions. A compare between Select Plus and MPSA is here.

Microsoft Enterprise Agreement can be purchased at a Microsoft Licensing Solution Provider  only. The Microsoft Enterprise Agreement allows organizations with more than 250 PCs, devices and/or users to purchase  Microsoft licenses  and cloud services over a three-year period at the best available pricing. As Software Assurance is included customers have the right to use the most recent version. At the end of the three years the license becomes a perpetual license. This means the customer can use it as long as he wants. Customers cannot reduce the number of licensed software during the three year period.

Microsoft Enterprise Subscription Agreement is a pay-as-you-go model. It is a rental agreement for three year which includes Software Assurance. Customers have the ability to decrease the number of licensed software each year during the True-Up process. There is no initial CAPEX. Costs are booked as operational costs. Licenses in this agreement are  nonperpetual (or subscription) licenses, which provide the right to use a particular licensed product until the end of the license-agreement term.  A requirement is that all desktops of the customer are standardized on Office, Windows or the Core CAL.

More info here. 

The difference between both is explained here.

MOSA Microsoft Online Subscription Agreement

MOSA is a dedicated licensing agreement for using Microsoft Online Services like Office 365. After signing the MOSA customers can purchase subscriptions under the  Microsoft Online Subscription Program (MOSP). This is a subscription-based Microsoft Volume Licensing program for organizations with one or more users that want to subscribe to, activate, provision, and maintain services seamlessly and affordably. The services available in this program  include Office 365, Windows Azure Platform, CRM Online, and Intune

Agreements for Service Providers

  • Microsoft Services Provider License Agreement (SPLA)

Agreements for Education

  • School Enrollment
  • Campus and School Agreement (CASA) = Specifically for qualified academic institutions such as schools, colleges, universities, including research facilities, interested in purchasing five or more licenses.
  • Enrollment for Education Solutions (CASA+EES or OVS-ES).
  • Microsoft Campus Agreement for higher education
  • Microsoft School Agreement for primary and secondary education institutions.

Enrollments

An enrollement is an extension of some agreements like the Enterprise Agreement. The target of an enrollment is to stimulate customers to buy a number of licenses or standardize on Microsoft products. In return they get discount.

For Enterprise Agreements the following enrollements are available:

  • Server and Cloud Enrollment (SCE). The most recent enrollment which replaces the ones listed below.
  • Enrollment for Application Platform (EAP)
  • Enrollment for Core Infrastructure  (ECI)
  • Enrollment for Windows Azure (EWA)

Server and Cloud Enrollment (SCE) covers datacenter products both on-premises and in the cloud. It  includes SQL Server, SharePoint, Biztalk, the Core Infrastructure Suite, Visual Studio and Azure.  There is no growth of licenses required but a minimum purchase of licenses is required. For example to meet SCE requirements customers must purchase minimum of 50 SQL Server core licenses or 5 SharePoint licenses. Also customers needs to cover the entire Enterprise server footprint with SA.
More info on SCE

Enrollment for Application Platform contains SQL Server, Visual Studio, SharePoint and Biztalk. It provides up to 40% discount but a license growth is expected to be 20-30% over a baseline.

Enrollment for Core Infrastructure offers discounts for a bundle of  Windows Server and System Center. Two bundles are available. The Core Infrastructure Suite Datacenter and Core Infrastructure Suite Standard. Discount of 20% is given on bundle as compared to product licenses individually

More info on ECI and EAP

This image compiled by Enpointe.com clearly shows the differences in enrollements

enrollment programs

Legal documents

When the agreement has been signed the customer should comply to certain Microsoft published documents. These documents explain how licenses should be applied.

The Microsoft Business and Service Agreement (MBSA) is the perpetual umbrella agreement that dictates the basic terms for all signed licensing agreements between your organization and Microsoft. This master agreement defines contract terms common to Microsoft licensing, service, and support agreements. MBSA is applicable for Select, Select Plus and Enterprise Agreements.

An important document for on-premises software is the Product Usage Rights. Service Providers have to use the Services Provider Use Rights (SPUR)  document. These are frequently published by Microsoft. The PUR describes per Microsoft product how the license should be used.

The Product List is another important document. It has info on avilability of new products, point values, product migration paths and Software Assurance benefits.

Both are binding documents. The customer should apply to what is written in those documents.

It is important to understand to what license the PUR applies. An excellent post at microsoftlicensereview.com about the PUR states:

  • For customers that elect to leverage downgrade rights, the Product Use Rights for the version licensed, not the version running will apply.

 

Some terms being used

Microsoft uses various terms in licensing documents. Some are explained here.

True-up
Customers with an Enterprise Agreement or Open Value contract agree to use a certain number of licenses. The customer is allowed to use more licenses than agreed. Once a year the customer reports the number of licenses in use. The difference between the number of licenses in the EA or Open Value and the actual usage is the True-up. Reporting the true-up once a year is mandatory.

Level and No Level
Microsoft provides discount when customers purchase a certain number of licenses. If the number of license is below a threshold this is called no Level. Level means the customer has acquired more licenses than the threshold and will get more discount. So LEVEL licenses are always cheaper than NOLEVEL

Levels in some products have numbers like Level C or Level D.

Pricing levels 
For enterprise Agreements there are pricing levels. Starting at Level A which provides the lowest discount to Level D which offers the highest discount. Governments always get Level D discount. The numbers in the second column shows the number of desktops in use by the organization.

EA level A 250 – 2.399
EA level B 2.400 – 5.999
EA level C 6.000 – 14.999
EA level D 15.000 +

Step-up licensing 
customers with a volume agreement including Software Assurance can upgrade the edition of software for a reduced price. For example they can upgrade from Windows Server Standard Edition to Datacenter Edition.
more info here 

Points
Some agreements like Select Plus use points to determine if a customer qualifies for the agreement. Each Microsoft product has points. These are documented in the Product List.

Pricelist

Many pricelists are available on Internet. Prices are hard to understand as you will see different prices for what looks like the same product. As you have learned the price depends on type of organization, agreement, enrollment, number of licenses in use etc.

This is a pricelist of Kernel Software

 

System Center, Hyper-V , Azure Meat(ing) June 26 the Netherlands

If you like System Center, Hyper-V, Azure as well as meat, don’t forget to register for System Center Summer Night “The MasterChef edition” which is rapidly approaching. This event is held in Culemborg, the Netherlands at June 26.

Do not worry about the Worldcup, the Netherlands is not playing. Below the games scheduled for June 26.

wc-soccer

At June 26 nine experts, seven of them are MVPs, will present five interesting presentations.

Because we have plenty of space left we invite those who have registered to bring a friend without additional cost. If you haven’t registered yet, please do and have a great afternoon which is completed with a nice barbecue.

 

Date of event

June 26th

 

Program

15:00 – 16:15 How many System Center fits on one grill by Ronny de Jong / James van den Berg [MVP] / Helmer Zandbergen / Marc van Eijk [MVP] / Dieter Wijckmans [MVP]

16:15 – 17:30 How Service Manager can do everything you need – a best-of-the-best Swiss cheese selection by Marcel Zehner [MVP]

17:30 – 17:45 Break

17:45 – 19:00 Light up the fire on your Hyper-V by Hans Vredevoort [MVP] & Peter Noorderijk on Hyper-V Architecture

19:00 – 20:15 Become a Masterchef on Microsoft Azure Automation by Maarten Goet [MVP]

20.15 BBQ time

This event is organized by SCUG.nl and Hyper-V.nu

 

Registration

Please register at https://www.eventbrite.nl/e/tickets-system-center-summer-night-2014-9265847399

 

Location

Unieplaza
Multatulilaan 12
4103 NM Culemborg

Google map here

Hyper-V 2012 R2 virtual machines lose randomly network connections . Be carefull with Emulex NICs! New drivers expected in September

<update September 15>
A Tweet reported that even when installing the HP September SPP virtual machine still lose the network connection. This is on a HP Gen7 server.

<September 9>
Today HP released a new driver  which solves this issue.  The driver is included in the  Service Pack for Proliant 2014.09. Download the drivers here.

<Update September 3>

A HP Customer was told HP would release HP drivers (v10.2.298.37) at September 9.  It’s for the 554FLB adapter in an HP BL460c Gen8

<update August>

Emulex released the  July 2014 Special Release for Windows Server 2012 and Windows Server 2012 R2 CNA Ethernet Driver now available for Emulex branded (non OEM) OCe111xx model adapters. 

Emulex states on Twitter: “for HP-specific drivers, contact HP Tech Support directly, they communicating driver updates thru that channel.”

<update June 24>
Hyper-V Program Manager Ben Armstrong made a blogpost about this issue titled Hyper-V Network Connectivity Issues with Emulex Adapters

He is blogging about this for two reasons:

  1. I have been contacted by a number of customers who have hit this, and want people to know about what to do.

  2. It is really good to see a hardware vendor documenting status and workarounds for known issues, and I am glad to see this post going up.

<update June 20> 
Hans Vredevoort of Hyper-V.nu wrote a blog about the conference call he had with Emulex. Emulex was unaware of this issue for a long time. It seems HP did not inform Emulex about the issue. When Emulex was aware they could n0t reproduce the issue at first, and then found other issues as well.
His blog here: Additional Background on the VMQ Issue with Emulex and HP

<update June 19>

Emulex posted a blog on the Emulex website explaining the issue described in my post. The workaround is to disable VMQ. We knew that one for a couple of months.

The good news is that a new driver and firmware is expected to be released in Mid July.

See the blog here. 

————————

<update June 17>

I have been in touch with the CEO of Emulex about this issue. He stated “My team is very aware of this and while you may not have been provided the update you deserve, the issue has not been ignored.   I know the team has been very engaged with HP and MSFT on this ”

Lets hope there is some progress on resolving the issue

————————

Virtual machines running on Windows Server 2012 R2 Hyper-V could randomly lose their network connection. The only workaround to restore network connectivity is to perform a Live Migration of the affected VM to another host or to reboot the Hyper-V host.

To do this some ITpro’s wrote scripts which pings all VMs and if no response is received a Live Migation is performed.

In many cases the issue is seen on Emulex NIC’s in HP Gen8 blades on which Windows Server 2012  R2 with Hyper-V is installed.

The problem seems to be related to the number of VMQ’s available in the network interface. If the number of netadapters/ virtual nics in VM exceeds the number of VMQ’s available, some  virtual machines will lose network connectivity.

I found an explaination of how VMQ works here. For much more indepth details about VMQ see this blogpost and the earlier linked in the article.

 

Since the emulex netadapters have 16 VMQ slots total, the first 4 slots are taken up by the host OS. The first of the 4 is supposed to be “special” (i’ll get back to that in a bit). The other 3 are regular adapters. The next 12 are regular VM adapters. Each guest VM is assigned one VMQ slot out of 16.

4 + 12 = 16; all VMQ slots are assigned.

When the 13th VM tries to get a VMQ slot, it fails to receive one.

What’s supposed to happen, is the hypervisor is supposed to just start sharing it’s “first” slot (the special one), with any additional VM’s that can’t get VMQ slots (or any that have VMQ disabled).

What actually happens, on the emulex or broadcom adapters, is that the guest OS simply fails to allocate a VMQ slot, and fails to get any network connectivity at all. It can not talk to the host OS (even if it’s on the same VLAN and not communicating through the physical ports).

Basically, the Emulex and Broadcom give you exactly the VMQ slots avaialable and the “fail-over” technology of failing back to vRSS-like queues for the other VM’s simply fails to work, and any VM that wasn’t issued a direct VMQ fails to communicate.

The intel drivers correctly share the first VMQ slot with any additional VM’s. It ends up with higher-than-normal CPU usage on the first core, but that’s no different than how Windows Server 2008 R2 (or 2012 R2 with vRSS networking) works anyway.

I understand the  Emulex adapters currently support up to 30 VMQ on Windows Server 2012.

The workaround which works for many people is to disable VMQ on the nic by using this command

get-netadapter | disable-netadaptervmq

This blogpost by Ben Gelens describes the same issue. Ben solved it by disabling the  Virtual Machine Queue (VMQ) on just the management nic.

The issue is described at Hyper-V.nu and at aidanfinn.com . It is also reported on the Microsoft TechNet forum.

It seems to occur mostly when Emulex network interface cards are used. These are for example used in HP (HP 554M , HP 554FLB, 554FLC adapters use the Emulex chipset) , Broadcom NetXtreme 57xx NICs, and IBM servers. Especially the 10 GbE cards are suspect for this issue.

Emulex driver versions 10.0.430.570 ,  10.0.430.1003 and 10.0.430.1047 all seem to suffer from this issue. Some information on Emulex adapters in a Hyper-V environment using RSS and VMQ.

Also NICs of Broadcom and Intel are reported having this issue but likely less frequent.

It seems that virtual machines which handle a lot of network traffic are more affected by this issue than virtual machines which do not handle a lot of network traffic.

The probolem is experienced by many people.

There is at the moment no solution but waiting for Emulex to release a new driver.

Some other advises which I found on various sites and might or might not help. There are other network issues reported as well on various blogs. Some servers get a BSOD but this could possibly be resolved by using a Microsoft hotfix

  1. disable encapsulated packet task offload per Disable-NetAdapterEncapsulatedPacketTaskOffload cmdlet
  2. Disabled Large Send Offload v2
  3. Set-NetOffloadGlobalSetting -TaskOffload Disabled

 

StarWind seminar on Virtual SAN for Hyper-V

 

Max Craft, Solution Engineer, StarWind Software, Inc.      LIVE WEBINAR on Thursday, May 15
10:00 AM EDT
FEATURED SPEAKER:
Max Craft
, Solution Engineer, StarWind Software, Inc.

Uptime is crucial for businesses of all shapes and sizes. Traditionally, it takes large investments to ensure uninterrupted workplace productivity.
Join StarWind’s FREE webinar to find out how our Virtual SAN for Hyper-V solves the uptime issue without breaking the bank:

  • Minimalistic Hardware Footprint. Only two hypervisor nodes are needed: no SAN, no NAS, no SAS JBOD, no voting third node, and no Ethernet switches. As there’s less hardware to buy and maintain, both CapEx and OpEx are reduced, resulting in improved ROI.
  • Simplicity. Neither advanced SAN management skills nor special training is required. StarWind’s Virtual SAN is a native Windows application that’s easy to setup and manage for any Hyper-V administrator.
  • Uncompromised Performance. A less expensive solution that brings even better performance.

 

Register for Webinar   Click here to register for this webinar

disclaimer:

This is a sponsored blogposting.

Windows Server 2012 R2 Update KB2919355 causing failed backups of Hyper-V VM’s

After installation of Windows Server 2012 R2 Update KB2919355, backups of Hyper-V VM’s fail. The error is

 

Error: Client error: The system cannot find the file specified

This error is not caused by the backup software nor the storage used. It is a bug in the Microsoft update. Veeam is curently working on a workaround which is expected to be released this Tuesday.

So be carefull installing this Microsoft update.

More info on the Veeam forum.