Service Provider License Agreement: Everything You Need to Know
A service provider license agreement is a vital tool between the service provider and client. Technology has evolved exponentially in the last 10 years, most notably within the IT industry. 3 min read
2. SPLA Questionnaire
3. Microsoft SPLA Program
A service provider license agreement is a vital tool between the service provider and client. Technology has evolved exponentially in the last 10 years, most notably within the IT industry. Service providers can be any entity hosting something, like a Microsoft application, for another organization. This could range from a business that provides email service to another company (such as Rackspace or GoDaddy) to a company that develops applications that run via Microsoft software.
Businesses that provide Microsoft services from a single or multiple datacenter should be looking at a service provider license agreement (SPLA). This would include:
- Business process outsourcers
- Platform infrastructure providers
- PC rental companies
- Web hosting providers
- Online gaming providers
- Messaging or collaboration service providers
- Streaming providers
- Internet service providers
SPLA means service provider license agreement, and it provides service providers with a license to provide Microsoft products monthly to customers. The notable difference between a boxed-product license and SPLA license boils down to the person using the software. The software you purchase at retail may only be used by an individual who buys it. However, SPLAs are designed for hosting businesses that offer software as a service to customers.
This would be for access for third parties and not reserved for internal employees.
- Example: If a company wishes to host exchange services for another organization, the exchange license comes in the form of an SPLA.
SPLAs are month-to-month licensing programs. If service providers have 10 users with access to software for February, they must pay for the 10 users in the March’s first week. In March, they have 10 users they need to report in April and the following months. Overall, an SPLA is flexible, allowing usage scales up and down on a monthly period. Additionally, it is non-perpetual after a service agreement ends its terms, and no one owns the license.
Various qualifications must be satisfied before entering an SLPA program, and you should take note of the following questions:
- Do you offer software services and apps on a subscription, rental, or service basis?
- Are you a provider, SI, ASP, or ISV that offers software services?
- Is one of your main goals avoiding up-front license costs and minimal fees?
- Is your aim to maximize end-user numbers who served from the same software type?
- Will your clients accept not owning software or getting it to their site?
If you can answer in the affirmative on most of the questions, an SPLA would be a good fit for your business goals.
You should also ask the following questions of your business model:
- Who would benefit from such access?
- Is it your business or is it the business that will be accessing?
- Are you offering such a solution as a service to clients?
- Are you hosting software for another entity?
- Is a third-party going to access Microsoft software along with your software?
- Will a third party access software you’re leasing from other vendors that run Microsoft?
Microsoft SPLA Program
The following comprises a list of various benefits for the Microsoft SPLA program:
- No startup costs
- Most Current Versions: You get access to the most up-to-date versions of all products within the program
- Worldwide Distributions: You can use Microsoft products to offer services anywhere in the world
- Pay-Based Usage: Monthly usage is determined on only what you pay for
Whenever a business hosts applications on behalf of third parties, an SPLA should be part of the conversation. All volume license programs are made for internal use instead of hosting solutions, as detailed in the product use rights, where it stresses that commercial hosting is not allowed. When you offer email to your workers via Exchange, the customer will buy a volume license agreement for the users. This is because such organizations are offering the service to their workers, and it is what the programs are designed to do.
- Example: You own a company with a customer that requires email for its employees. The customer does not have an exchange service, has few resources to implement it, and needs you to host an exchange on their behalf. To license an exchange under this example, you need to license through SPLA. This is due to the fact that you are hosting Exchange for another business.
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