Tag Archives: microsoft

End user chargeback: Why Service Providers do it better

One of the benefits of adopting a cloud strategy is the ability to charge for resource usage back to the end user. From the early days of ISPs where end customers were charged for traffic volume, cloud chargeback has evolved to support a variety of metrics, like virtual machine uptime, disk IOPS and even API calls. Metering engines are present in all popular private and public cloud platforms (Apache cloudstack, VMware chargeback manager, Abiquo to name a few) and produce decent reports that can be directly used as input to billing services or quarterly departmental budgets.

However, charging directly the end user for consuming IT services remains a challenge. It’s easy to meter and charge a departmental virtual server running Sharepoint, but how do you charge individually each and everyone of its 1,100 users? Or, how do you charge MS Office usage all over your user base? (If you think that it’s silly to count how many users are running Office or using Sharepoint services, then take a look at your Microsoft annual bill and think again).

To implement end user chargeback, you need metrics that have affinity to the end user. Such metrics are two:

  • End user right-to-use (or software license)
  • Application or service execution

To make use of these metrics, the underlying infrastructure must be based on a SaaS stack, not an IaaS stack. Charging end users from an IaaS perspective (metering virtual server memory, CPU and disk usage) is like receiving an electricity bill for the entire building and dividing it to the number of the building tenants. On the contrary, delivering SaaS instead of IaaS makes end user chargeback feasible, since you can measure the two metrics stated above.

And here is where service providers truly have an upper hand in measuring consumed software licenses and software usage versus IT mamagers and CIOs running private clouds. The reason? Software vendors.

Most software vendors (Microsoft, Symantec, Citrix, VMware and lots of others) sell their software licenses (rent, to be exact) with a special licensing scheme, targeted at cloud service providers. The “service provider” offering (Microsoft’s SPLA, Citrix CSP, Symantec ExSP, VMware VSPP) bills service providers by the month or every quarter depending on the number of software licenses their end customers consume, without upfront investments in software licensing costs. Given today’s rich cloud software stacks, a cloud service provider can build and deliver software over the wire and charge end users for using just the software license, doing away with virtual server CPU utilization, memory consumption or cloud disk capacity.

An example: Delivering 90% of Microsoft software today is entirely possible for any cloud provider that has a signed SPLA agreement. From MS Office up to Biztalk services, Microsoft imposes a monthly fee for every reported software license. Citrix on the other hand have a flexible service provider licensing scheme, charging per concurrent user, for using XenApp for software execution and ICA for pixel/keystroke delivery over the wire. Put these on a VMware vCloud farm and utilize VMware’s VSPP for licensing your ESX infrastructure, and you have a complete SaaS stack, without any upfront licensing costs: Charge your end users for software usage, collect your payments and pay back your software vendors every month or every quarter. You don’t have to worry if you have 100 customers on January and 5000 customers on February, you don’t pay any upfront licenses.

What is wrong with this? Corporate organizations are not service providers, so they are not eligible for paying for the software they use as a service. They are stuck with inflexible contracts and software support costs, without any agility in paying for the software they use. For organizations that have a steady and fixed number of users this may be OK, but for companies that have fluctuating user numbers, that’s a problem: You just can’t rent 200 MS Sharepoint licenses for three months. If you fall in this category, why don’t you start talking to your cloud provider?

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When Windows XP counts your cash

Time for an illustrated post: From a nearby mall (I swear I didn’t do it; I was fast enough to grab these shots with my relic Nokia 6300)

OK, we know that XP has been loooong ago out of support for regular customers; will be around since 2014 for banks, presumably… So this ATM will be upgraded in two-three years from now. Let’s see the next slide, please:

That’s the splash screen of IBM Tivoli TMF and we can see it’s version 4.1.1. Currently the latest release is 4.3.1, so we’re a bit behind on this, too, aren’t we?

A few questions that pop in my head as I deactivate the phone camera and put my wallet back in my pocket:

  1. Why on earth would I trust a machine running XP, the most targeted and abused OS so far, to count my money?
  2. This ATM rebooted three times in a row and then worked just fine; most probably not due to a fault (we know that PCs fail miserably and die or reboot constantly) but due to maintenance. Why would a bank run maintenance tasks remotely in broad daylight?
  3. Tivoli is a quite decent platform for managing the box and its software; yet it’s not cheap and needs backend infrastructure, let alone services from (expensive) consultants for customization and operation. If XP was chosen as a low cost platform, bundling Tivoli and friends would make it a quite costly solution.

Virtualization and software licensing, a true Monty Python story: The case of Microsoft

I’ve watched lots of presentations and workshops on virtualization and I’ve done a few myself to customers. Quite naturally, all focus on how easy and magical it is to take your real servers, made of metal and plastic, and magically turn them into software bits and pieces, untouchable and pure, running in the Matrix. But few, very few dare to unfold the horrible truth about what happens to your software licenses as soon as you virtualize commercial software.

Straight to the point: We assume that you have a windows server shop and dare to go virtual. Every system runs some sort of Windows server (Standard & Enterprise) and your applications are Oracle databases, MS SQL Server, Exchange server and some IBM Websphere application servers. Windows are licensed by the server, Oracle, WebSphere & SQL server by the CPU cores or sockets and Exchange by server. Be prepared for a cosmic effect on your software licenses.

Let’s begin with Microsoft. Luckily, MS has a sort of guide here on how virtualization affects licensing – make sure you read the accompanying Word documents (if you can take it). First, you have to know that Microsoft allows Windows VMs loaded with MS applications to float from server to server, as long as they are in the same “server farm”. What is a server farm? Well. Up to two datacenters connected via network no more than 4 timezones away

Oh, kindly note that we refer only to Microsoft Volume Licensing, not OEM or FPP (Full Packaged Products). They don’t apply. You have been warned.

Now, how are Windows servers licensed under a virtual fabric (in the same “server farm”, so to speeak)? If you believe that a properly licensed Windows 2008R2 physical server that was sucked into the virtual fabric is allowed to run as a VM and hop from ESX to ESX, then, you are wrong. It’s now allowed, unless it is the sole Windows Server Standard Edition running on your ESX. If it was an enterprise edition, well, you can run up to four instances on that ESX. What is the solution??? Go ahead and buy Windows Server Datacenter Edition (licensed per CPU) and assign one license to each and every ESX/XEN/KVM host you have. Only then you can run as many Windows Server VMs you wish on your entire server farm….

What about Microsoft suites like Exchange, Sharepoint, SQL server? The situation with SQL server is that now it’s licensed per virtual processor  – that’s vCPU, meaning that if you have a two-socket, 4-core per CPU ESX/XEN/KVM server and you have two Windows/SQL server Enterprise VMs with four vCPUs assigned to each VM, you need 2 X 4 = 8 processor licenses, regardless if the physical system has two processors. The good thing is that your Windows/SQL server VM is allowed to hop from server to server. Now, for Sharepoint, Exchange etc, a plain old server license is sufficient for Microsoft to allow you to play.

I won’t calculate relevant costs, this is left as an exercise to the reader (Hint: For an initial P2V migration of 4 to 1, costs only for Windows licenses can rise 6-fold, however, a properly licensed virtual fabric can run an unlimited number of Windows VMs). I would advise you to contact your Microsoft TAM to clarify the details; we have only scratched the surface. VDI licenses and desktop OSs are another story.