What SPLA is, who needs it, how the monthly use report works, where the audit traps live, and the buyer side moves across the full SPLA contract.
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Microsoft Services Provider License Agreement is the contracting model that wraps hosting providers. The hub anchors the buyer side view across the monthly use report, the SAL framework, audit posture, and the moves that keep the contract clean.
The Microsoft Services Provider License Agreement, or SPLA, is the contracting model that hosts Microsoft software to a third party. It is the license model that sits underneath every hosting provider that runs Windows Server, SQL Server, Remote Desktop Services, or Office for the customer.
This hub anchors the buyer side view across the SPLA contracting model, the monthly use report, the SAL versus per core framework, audit posture, and the moves that hold the hoster honest at renewal.
Read the related Microsoft knowledge hub, the Microsoft advisory practice, and the SPLA advisory page for the engagement framework.
SPLA is the Microsoft contracting model for hosting providers that offer Microsoft software as a service to a third party.
The hoster signs SPLA with Microsoft. The end customer consumes the hosted service through a separate service agreement with the hoster.
SPLA and CSP are different programs. CSP is the cloud channel program for Microsoft Online Services. SPLA is the hosting license program for Microsoft software that runs on the hoster infrastructure.
A hosting provider that resells Microsoft 365 sits on CSP for that service. A hosting provider that runs Windows Server and SQL Server in its own data center sits on SPLA for those products.
The end customer cannot sign SPLA. SPLA is a hoster license. The end customer pays a service fee to the hoster that includes the license cost as part of the rate card.
End customers cannot bring their own on premises license into a SPLA environment. License Mobility through Software Assurance is the exception, with strict scope rules.
Internal hosting inside a single enterprise group does not require SPLA. The on premises Volume License is the right model.
The line gets blurry when the enterprise hosts services for affiliated companies or for outsourced business functions. That use case may require SPLA depending on the legal structure.
SPLA model and product mix at a glance
| Product | Model | Unit | Audit risk | End customer leverage |
|---|---|---|---|---|
| Windows Server | Per core or VM | Physical core | VM density | Datacenter consolidation |
| SQL Server | Per core or VM | Physical or virtual core | VM density and edition | Enterprise consolidation |
| RDS | SAL | Named user | Overstated SAL count | Monthly reconciliation |
| Office | SAL | Named user | Microsoft 365 overlap | Direct CSP move |
| Sharepoint | SAL or per core | Named user or core | Hybrid scenarios | Rate card audit |
| Exchange | SAL | Named user | Microsoft 365 overlap | Direct CSP move |
SAL stands for Subscriber Access License. It is the named user license on SPLA, equivalent to a CAL on the Volume License model.
Each named user that accesses the hosted service requires a SAL for every product the user touches. The SAL count is reported monthly to Microsoft through the hoster.
Windows Server and SQL Server can be licensed by the physical core or virtual machine core on SPLA. The model fits server software with high user count or with public anonymous access.
The minimum is four cores per processor or per virtual machine. The reporting unit is the licensed core, not the named user.
The hoster chooses the license model on each product, and the choice can vary across products in the same estate. Windows Server may be per core, SQL Server per core, RDS by SAL, and Office by SAL.
The model choice drives the rate card and the renewal posture. Procurement should test the cost of each model against the actual user and consumption profile.
The hoster reports SPLA usage to Microsoft on a calendar month basis. The report shows the peak active count for each product in the reporting period.
The report becomes the invoice basis. The hoster pays Microsoft for the reported usage, then bills the end customer at the contracted service rate.
SPLA does not have an annual true up. The monthly report is the true up event. A surge in users in any month is reported and invoiced for that month.
The buyer side risk is the end customer paying for a hoster overstating the SAL count or missing the SAL reduction on a downsizing event.
Windows Server is licensed per core on SPLA. The Datacenter edition unlocks unlimited VM density on a fully licensed host. Standard edition licenses are per VM.
Remote Desktop Services subscriber access is layered on top of the Windows Server core license through RDS SAL.
SQL Server is licensed per core on SPLA. Enterprise edition supports unlimited virtualization on a fully licensed host. Standard edition is per VM at the four core minimum.
The hoster cannot use BYOL with end customer licenses except through the License Mobility through Software Assurance program with strict scope rules.
Office for hosted use is licensed via Office SAL. The hoster reports the active SAL count monthly. The end customer pays the service rate that includes the SAL cost.
Office on SPLA is rare. Most enterprise hosted desktop environments use Microsoft 365 Apps for Business or Microsoft 365 E3 through the customer CSP or EA rather than SPLA Office.
We discovered the hoster had been reporting a SAL count thirty one percent higher than our actual named user list. The reconciliation, the rate card audit, and the Microsoft direct overlap test reset the hosted service contract by twenty three percent below the prior year. The hoster relationship survived the conversation.
The most common audit finding is the hoster overstating the SAL count to maintain a buffer against active subscriber surges.
The end customer view should test the SAL count against the actual active named user list each month. Procurement should request the monthly report from the hoster for the rolling twelve months.
VM density on SQL Server Standard or Windows Server Standard editions is a frequent audit finding. Each VM requires its own license on Standard.
The right move is to consolidate the VM dense workload onto Datacenter or Enterprise edition hosts that unlock unlimited virtualization.
Development and test environments that drift into production traffic are a recurring SPLA audit finding. The drift requires production licensing under the SPLA terms.
Document every hosted environment with its production status and SAL allocation before any Microsoft engagement that could open an audit conversation.
SPLA itself is a three year hoster contract. The end customer service contract sits on a separate cadence, commonly annual or three year.
The renewal posture for the end customer is on the service contract with the hoster, not on the SPLA itself. Procurement uses the rate card and the term commitments at that event.
The hoster service rate card is the negotiating surface. The rate sits per SAL, per core, or per service unit depending on the product.
The audit reconciles the rate card against the hoster cost basis, which is the Microsoft SPLA price list plus the hoster margin. The margin gap is the leverage.
The mid term operating cadence is where the structural cost discipline lives. Monthly SAL reconciliation, quarterly rate card review, and the rolling Microsoft direct overlap test keep the hoster relationship clean.
Read the related SPLA licensing advisory for the full engagement framework.
SPLA is the Microsoft Services Provider License Agreement, the contracting model for hosting providers that host Microsoft software to a third party. The hoster signs SPLA and reports monthly use to Microsoft.
Hosting providers, managed service providers, and any company that hosts Microsoft software for a third party party need SPLA. Internal hosting inside a single corporate group does not require SPLA but may need it for affiliated company use.
SAL stands for Subscriber Access License. It is the named user license on SPLA, equivalent to a CAL on the Volume License model. Each named user that accesses the hosted service requires a SAL per product touched.
Generally no. SPLA hoster licenses the software, and the end customer cannot apply on premises Volume Licenses to the hosted environment. License Mobility through Software Assurance is the exception with strict scope rules.
The hoster reports SPLA use to Microsoft on a calendar month basis. The report shows the peak active count for each product in the reporting period. The report becomes the invoice basis for Microsoft and for the end customer service fee.
The most common findings are overstated SAL counts, VM density violations on Standard edition products, test environments drifting into production, and the unlicensed virtual machine on a fully utilized host.
It depends on the workload mix. Hosted Exchange and Office on SPLA frequently move cleanly to Microsoft 365 through CSP or EA. Hosted Windows Server and SQL Server stay on SPLA for the hoster managed model.
Quote the same scope from at least three hosters and compare line by line. Audit the rate card against the public Microsoft SPLA price list plus a reasonable margin. The Redress Microsoft practice runs the joint audit on every SPLA engagement.
Microsoft renewal posture, EA framework, SQL Server licensing, M365 SKU framework, Copilot framework, SPLA hosting, and the buyer side moves across the full Microsoft estate.
Used across more than five hundred enterprise engagements. Independent. Buyer side. Built for procurement leaders running the next renewal cycle.
Our hosted environment had drifted from a clean SPLA contract into a series of monthly true ups that nobody had audited in three years. The SPLA hub framework reset the SAL count, audited the rate card, and surfaced the products that should have moved to direct Microsoft 365. The contract landed twenty three percent under the prior year.
500+ enterprise clients. 11 vendor practices. Industry recognized. One conversation can change what you pay for the next three years.
SPLA framework moves, hoster rate card audit, License Mobility through SA, and the wider Microsoft leverage signals across the practice.
