CSP-Hoster
The new Microsoft Cloud Solution Provider – Hoster program (CSP-Hoster) was quietly launched with a promise of creating a more even playing field for smaller Microsoft Cloud Providers. In essence, the aim is to remove some of the red licensing tape which disables hosters from competing with Microsoft.
Read on to get an overview of the program, what it means operationally, and some potential areas that may trip you up.
What does CSP-Hoster mean?
Previously… hosting companies had to license Microsoft software via SPLA, which had many rules and restrictions. Then CSP came along, and then QMTH – each with more rules and process. In short, Hosting companies and their customers have had many years of complexity and restrictions related to Microsoft licensing. These restrictions block deals from happening, make services more expensive, and at times stop services from being possible.
The welcome change is that many of the restrictions are being dropped. In simple terms – provided a customer has purchased a valid license – they can use “bring it” and use it on an approved “CSP-Hoster”. This is termed “BYOL” Bring Your Own License… This applies to Windows Server Licenses, SQL Server, Microsoft 365 licenses. This is a really good idea, why shouldn’t the customer choose where they can use their software!
A second point – is the ability for specific CSP licenses to be used for Windows 10/11 on a CSP – Hosters infrastructure. This is new and unique to “CSP-Hoster” and is a benefit available from 1 October, with the Microsoft 365 Enterprise SKUs (F3, E3 and E5).
Does CSP-Hoster replace SPLA ?
I personally believe SPLA has a limited life, but at the moment SPLA lives on and works alongside CSP-Hoster.
The big difference with SPLA is that SPLA is a monthly license which is purchased and reported by the Service Provider. Customers purchase a service which may include the use of one or more Microsoft licenses.
With CSP – each license is assigned to the customer, the customer is purchasing a Microsoft finished service that is resold via a Partner. Many licenses that were previously purchased through SPLA are now available via CSP.
CSP-Hoster enables Customers to purchase their licenses how they choose, then use them on a CSP-hosters infrastructure – or alternatively, the CSP-Hoster can sell the customer the licenses, and the infrastructure the licenses are used on. In most cases the CSP-Hoster will also be a SPLA provider and will still use SPLA for licensing host servers (for example).
Note – there is still a lot to work out here!
What is a meaningful use case for CSP-Hoster?
Use case – an Enterprise wanting to utilize a hosting company for virtual desktops.
A customer owns Microsoft 365 E5 licenses through a Microsoft Enterprise agreement, they would like to use a hosting company to provide Windows desktops that can run on the hosting companies shared infrastructure platform.
With the CSP-Hoster programme, the Enterprise licenses can be used on the shared hosting platform, there is no requirement for VDA, client or RDS licensing as this is all covered by the Microsoft 365 E5 license that the customer already owns.
How does CSP-Hoster help me compete with Microsoft?
Microsoft outlined that some of the feedback they had from hosting companies was that pricing instability was damaging.
A benefit of CSP-Hoster is that several subscriptions are available via CSP with longer terms. My understanding is that customers committed to a 3 year term can get a significant discount. I am not 100% sure what these are as a lot of licenses such as RDS Cals have been available through CSP for some time. More investigation required.
The use of M365 F3, E3, and E5 for licensing of Windows 10 virtual desktops, is unique to CSP-Hoster. It will be interesting to see how much of a take up there is.
Unfortunately, it still seems that Windows 10 Multi-session is only available on Azure/Azure Stack, which means that CSP-Hosters can only really run VDI’s which is a bit of a disadvantage. It does not seem that Microsoft want a truly open playing field.
Who can join the CSP-Hoster program?
Right now – Direct Microsoft CSP Partners can sign up who are QMTH qualified – although that doesn’t appear to be mandatory.
Microsoft say that this will eventually be open to a wider number of CSP partners.
I still don’t understand, what does this actually mean?
First thoughts; the program defines rules that control and validate customer licensing when used on hosted infrastructure. It has overlap with the older QMTH program and will replace this.
How do I onboard a new customer (to CSP-Hoster)
Some of these things you should will already be doing, but in summary:
Step 1 – Every customer must have signed the Microsoft Customer Agreement.
Step 2 – You must ensure the customer has the correct licenses they need; this involves a customer attestation, and you submitting a spreadsheet to Microsoft requesting a BYOL validation. This should ideally be done before you go-live, but it must be within 24 hours of go live.
Microsoft will process (seemingly manually) and confirm all is OK, or if not, you’ll need to sort the license situation out.
So, is that all? No mention of monthly reporting? Surely, I need to do some monthly reporting?
Fortunately for those of you that enjoy reporting – yes, of course Microsoft made sure there is a need for monthly reporting!!!
As user numbers change, those dastardly customer attestations can quickly get out of date, leaving Microsoft uncertain as to whether or not your customers are 100% compliant! CSP – Hoster solves this with the cunning idea of a monthly reporting spreadsheet.
Each month, every CSP – Hoster will be required to submit current numbers to Microsoft on
- BYOL Customers
- License included customers (where you’ve sold a service and the license together)
Microsoft requires the report by the 10th of each month for the preceding month!
What’s in it for Microsoft?
As much as Service Providers do their bit, SPLA licensing can become disconnected with reality resulting in lost earnings and uncertainty (to Microsoft). CSP-Hoster will keep tighter tabs on licensing and where it’s used.
I expect CSP-Hoster has a future aim of transitioning licensing purchases away from SPLA and into CSP. This enables SPLA to be dropped which will remove the overheads associated with running this program
Any other thoughts about CSP-hoster?
- It is good to have the restrictions related to customer purchased licenses removed. This can opens more opportunities which will help end-customers.
- Despite the above, Microsoft Licensing is still too complex for humanity, for hosters it’s always been the worst. This change doesn’t appear to simplify things – which is a bit of a missed opportunity.
- Microsoft have covered some use cases by adding the ability to use Microsoft 365 F3,E3,E5 on hoster infrastructure. It’s a shame that there is no session based option for hosters to use. as an example, Windows10 multi-session – why is it not available? This seems like an artificial constraint.
- There is an admin overhead, tools like Atria can definitely help keep records. Be prepared for audit down the track.
The following links have more information on CSP-Hoster:
- Microsoft October announcement on CSP-Hoster program
- Microsoft CSP-Hoster Program guide – this is the legal wording
- Microsoft FAQ on Hosting and Outsourcing
We will work with our CSP-Hoster partners, Atria will help you with customer attestations and monthly reports. This is critical to get right, using Atria you will have auditable evidence of each user add/move to match with your monthly licensing reports.
We are keen to get your feedback on CSP-Hoster and also help understand how we can help you make the process more efficient – please get in touch if you want to have a chat.
