Outsourcing – When can I use Internal use Licenses when to Service provider License Agreement


Outsourcing is a very very popular topic at the moment with the movement towards software as a service

I get many questions on "when is it SPLA", so hopefully the below will clear up any confusion on the subject, hope this helps Uday!!

We split "outsourcing" into 2 main areas

  • Dedicated Outsourcing
  • Shared Outsourcing

First I want to explain the licensing types, we have Internal use licenses, so Volume License Agreements such as Select/EA/Campus/Open are all internal use, for the company who purchased them and their legal affiliates, as we define, only, and we also have commercial use licenses, which is were SPLA fits in, commercial use license is were you provide a service, such as a web hoster

Lets first take a look at common customer scenarios

In-house Deployment



With In-house deployment the customer will deploy the servers and software at there own premises on there own hardware and manage that IT procurement and Infrastructure in-house by themselves

Customers may use Internal use licenses for this, so OEM/FPP, Select, EA, Open value etc

If they want to give access to external non-employees to collaborate on projects, the External Connector or CALs will cover this

In-house Deployment does NOT require SPLA




Outsourcing – Dedicated

Dedicated Server Hosting has 3 key options



Customer A owns purchases and retains their own licenses and uses the outsourcer to manage their Desktops and/or Servers in an exclusive dedicated relationship

Customer B owns the licenses, the Outsourcer procures and manages the licenses on behalf of the customer via OEM/FPP or Open or  the customers Select or EA, the Outsourcer will sign into the customers Select or EA to permit them to do purchase the licenses on the customers behalf,  the licenses will remain in the end customers name, the outsourcer is managing them on behalf of the customer in this relationship, once the relationship ends or is terminated, the outsourcer must transfer the licenses back to the end customer within 30days using the transfer request form, all paperwork completed via Large Account reseller <LAR>, the customer will use the outsourcers datacenter

Customer C is provided a service by the Outsourcer using the Outsourcers hardware and software,  the outsourcer must sign the SPLA, internal use licenses such as EA/Select/OEM and FPP cannot be used for any "leasing, hosting, renting" or any kind of service



Outsourcing – Shared



Shared hosting is were services are provided by an outsourcer to many customers, so Customer A, B, C, Z on the same hardware using the same software

SPLA must be used in this scenario, no internal licensing can be used in "leasing, hosting or renting"……….providing a service to others is considered "hosting", you cannot use your EA/Select etc for this, even if you are providing this service for free!

A SPLA is required when an organization provides software services to third parties; software services
can be the organization’s own IP or third party’s IP





This is a subject that conjurers up many many different scenarios, so I have posted a full PDF on this HERE



  1. Hi Emma,
    Good resource. Thanks. Got a question though … can SQL Server 2005 in SPLA licensing, be used with Passive Failover? We are currently in negotiations with our SPLA hosting provider who says it is not (i.e. require us to pay for SPLA failover node as well as the SPLA primary node). Any thoughts?

  2. Hi Warren
    Below from the SPUR – which is the SPLA equivalent of the PUR  🙂

    For SQL Server 2005 Standard, Enterprise and Workgroup Editions:
    Fail-over Servers. For any operating system environment in which you run instances of the server software, you may run up to the same number of passive fail-over instances in a separate operating system environment for temporary support. The number of processors used in that separate operating system environment must not exceed the number of processors used in the corresponding operating system environment in which the active instances are running. You may run the passive fail-over instances on a server other than the licensed server
    You can download it  http://www.microsoftvolumelicensing.com/userights/DocumentSearch.aspx?Mode=3&DocumentTypeId=2

    We have recieved lots of feedback on VECD and SPLA – we are assessing this from a licensing and legal perspective
    To answer the question, yes we are working on a roadmap at the moment
    As an alternative, the end customer can have VECD "managed" in a dedicated environment by an Outsourcer, using Volume Licensing
    Hope this helps

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  5. Hi Emma,I need to know why the price list of Windows Datacenter 1 Processor (illimitate virtual instances) is cheaper than Windows Enterprise 1 Processor (4 virtual instances). Could you help me? thanks for your support. simona

  6. Hi SimonaI dont deal with any type of pricing so for all pricing queries you will need to contact your channel account specialist or partnerwhat I will advise is that Windows DC is per Proc /cals but Windows Ent is per server/cal licensing model, not per procCheersEmma

  7. Hi Emma, I\’m hoping you can help me, i have tried many people and websites but can\’t seem to find an answer. Basically we are a telecoms company which make software used by mobile networks. Our pre-sales manager wants us to deploy VM images to customers so that they can test out our software in their own environment. Obvioulsy with this there are going to be Licencing implications for the OS and sometimes with MS Office as well. I have been told that SPLA is the way to go, but with all the documentation i have for SPLA does not really say anything about actually giving VM images to customers, can you please clarify if SPLA is the right way to go? if so are there minimum requirements that we need to meet?ThanksZubair Basar

  8. Hi ZubairUnder SPLA there is no option to virtually host the Desktop OSE, there is no VECD optionAs an alternative you could offer a dedicated outsourcing offering to single end customers on dedicated hardware and software, as aboveSorry, there is no immediate plans to offer VECD under SPLACheersEmma

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