Most Microsoft software products – especially server products – can be licensed under multiple different models and metrics. SQL Server probably is the best example of a product that presents companies with multiple decision layers when analyzing new use cases:

  • Commercial Hosting or Volume Licensing? Companies need to determine whether a particular use case requires commercial hosting rights or whether internal-use licenses under one of Microsoft’s volume-licensing programs are all that is needed. (Microsoft’s current guidance on commercial-hosting use cases is contained in the Services Provider Program Reference Card, available here.)
  • For Commercial Hosting Use Cases, SPLA or Self-Hosted Applications? Microsoft offers commercial-hosting rights either under the Services Provider License Agreement program or under the Self-Hosted Applications benefit with Software Assurance. SPLA is a flexible model that entails monthly reporting based on current usage. The Self-Hosted Applications model requires a capital expenditure on licensing, but avoids the administrative burdens associated with monthly reporting.
  • Licensing per VM or per Host Server? In virtualized environments, SQL Server licenses may be assigned either to individual VMs (“Operating System Environments,” or OSE in Microsoft lingo) or to the physical host servers on which those VMs are running. Licensing per individual VMs often makes more sense for less dense virtualization environments, but it often can be difficult to determine where to draw the line.
  • Licensing per Cores or per CALs? SQL Server Enterprise may be licensed only based on the number of physical processor cores active on a server (or on the number of virtual cores allocated to an individual VM). However, SQL Server Standard may be licensed either based on cores or based on the number of servers plus the number of client users or devices requiring Client Access Licenses (CALs). Companies with heavy SQL Server usage across numerous users often can realize cost savings by licensing with cores – which allows for unlimited clients – but core licenses can be much more expensive than server licenses and CALs.

My experience is that companies usually are best served by making a decision for as much of the entire enterprise as possible with respect to each of the above levels, rather than attempting to implement mixed modes. The commercial hosting vs. volume licensing level is an exception, given that companies may have internal domains requiring SQL Server that are wholly separate from any hosting domains. However, within each of those domains, licensees will be setting themselves up for greater licensing success to the extent that they can decide domain-wide between SPLA or Self-Hosted Applications, between VM- or host-level licensing, and between cores or CALs. The IT and procurement teams in charge when licensing decisions are made often are not the same IT and procurement teams that must contend with publishers years later during an audit. Mixed licensing plans often can be extremely difficult to decipher without the input of those original decision-makers, and they sometimes can be difficult to unravel even with their input in cases where IT environments have changed substantially over time.

Licensing simplicity may sometimes entail a larger price-tag. However, if companies can absorb those expenditures, they will be helping to avoid increased administrative burdens in the future as well as the risk of exposure associated with more nuanced, yet poorly managed, licensing models.