Bring Your Own License (BYOL) Rules on Third Party Cloud Providers
Software licensing is ridiculously confusing, and its hyper complexity is not slowing down anytime soon. This confusion can easily lead to overspending, which equates to more money in the software vendor’s pockets, taken at the expense of your company’s software budget. how does overspending occur? One key reason behind our client’s overspending stems from the complexity of Bring Your Own License rules (BYOL) on their third-party cloud providers.
At MetrixData360, we have helped hundreds of companies save millions of dollars, in this article, we will clear the waters by showing you the steps you can take to mitigate any potential areas of overspending in your software licensing environment.
Microsoft changed its rules as of 1st October 2019 around how Microsoft products are licensed in 3rd party hosting scenarios. These changes primarily impact AWS, Google, and Alibaba clouds (although others are affected). The concept of Bring Your Own Licenses (BYOL) is influenced significantly by these changes. Before these changes, as long as you had hardware dedicated to your use (i.e., were not using shared infrastructure), you could BYOL now. With these changes, you may be required to purchase subscription licenses for these products through the hoster (e.g., Windows Servers, Office). Specific versions may still be licensed via BYOL if licenses were acquired for those products before October 2019 or on a contract still active as of October 2019.
To understand these rights, you must review the Microsoft Product Terms. Below are the relevant sections:
- Customers may use the server software on a Licensed Server, provided it acquires sufficient Server Licenses as described below.
A Licensed Server is:
A Licensed Server means a single Server, dedicated to the Customer’s use, to which a License is assigned. Dedicated Servers that are under the management or control of an entity other than the Customer or one of its Affiliates are subject to the Outsourcing Software Management clause. For purposes of this definition, a hardware partition or blade is considered to be a separate Server.
The Outsourcing Software Management clause states:
Customers may install and use licensed copies of the software on Servers and other devices that are under the day-to-day management and control of Authorized Outsourcers, provided all such Servers and other devices are and remain fully dedicated to Customer’s use. The customer is responsible for all of the obligations under its volume licensing agreement regardless of the physical location of the hardware upon which the software is used. Except as expressly permitted here or elsewhere in these Product Terms, the Customer is not permitted to install or use licensed copies of the software on Servers and other devices that are under the management or control of a third party.
Authorized Outsourcer means any third-party service provider that is not a Listed Provider and is not using Listed Provider as a Data Center Provider as part of the outsourcing service.
AWS is a Listed Provider. Next, we need to determine if we have a right to utilize software at the Listed Providers through Microsoft License Mobility through Software Assurance right:
License Mobility through Software Assurance
Under License Mobility Through Software Assurance (SA), Customer may move its licensed software to shared servers under any of its Licenses which are designated as having License Mobility for which it has SA, subject to the requirements below. Products used for Self-Hosting may be used at the same time under License Mobility through SA rights, subject to the limitations of the Self-Hosting License Terms.
With License Mobility through SA, Customer may:
- Run its licensed software on shared servers;
- Access that software under access licenses and for which it has SA, and under its User and Device SLs that permit access to the Products;
- Manage its OSEs that it uses on shared servers; and/or
- Manage its OSEs that it uses on its servers using software that it runs on shared servers.
To use License Mobility through SA, the Customer must:
- Run its licensed software and manage its OSEs on shared servers under the terms of its volume licensing agreement;
- Deploy its Licenses only with Microsoft Azure Services or qualified License Mobility through Software Assurance Partner; and
- Complete and submit the License Mobility Validation form with each License Mobility through Software Assurance Partner who will run its licensed software on their shared servers.
License Mobility allows for use on a shared server. Products that have this right associated with them allow BYOL (as long as you have active Software Assurance). Next, we need to see if a product has Server Mobility. For Windows Server:
4. Software Assurance
Windows Server does not include License Mobility rights. For Windows Server (or any product without License Mobility), this means BYOL is only available for versions that were released before October 2019 and for which licenses were acquired prior (or on active contracts as of October 2019) to October 2019
Please refer to the current Product Terms to ensure this info is still accurate as Microsoft makes changes frequently to their licensing rules.
Start Saving on Your Software Licensing
Being able to cut software licensing costs will mean money back into the IT department for smarter and more innovative investments. This can be done by tracking the life cycles of your assets through the successful deployment of an inventory tool (along with someone who can effectively read it), through having a clear understanding of usage during contract negotiations, carefully considering your migration to the Cloud, and by conducting internal audits to ensure compliance.
At Metrixdata360, we can help you cut down your costs to save you from unnecessary drains on your budget and potentially heavy audit penalties. Don’t put off saving money, get your free consultation today!