We get this question all the time. When a SPLA partner gets legal notification of an audit proceeding, it is a natural question to ask – should I retain a lawyer? Microsoft is evoking the audit clause in your SPLA and exercising their rights to audit your hosted environment, including potentially the environments of your customers.
While this feels like a legal issue, you might want to hold off on taking legal action.
First, Microsoft has no shortage of legal counsel. According to this article in the Puget Sound Business Journal, Microsoft has a legal team of 1500, 500 of whom are lawyers. That makes them one of the larger legal firms in North America.
From our experience, these are largely contract lawyers. And very good ones at that. The language in the SPLA contract and related MBSA (Microsoft Business and Service Agreement) doesn’t leave a lot of room for legal debate. Microsoft has been challenged hundreds of times and has ironed most of the ambiguity that might be contested. There are certainly areas that can be leveraged in a SPLA partners defense but a law degree doesn’t add value here, it requires a firm understanding of a SPLA partners unique technical environment and why they might be entitled to an exception. An understand of how software is deployed, detected, and licensed is what’s really required.
In the end, hiring a lawyer to represent you can backfire. In Microsoft’s defense, they want to minimize the amount of legal action they take with their partners. It’s not good for business and if hiring a lawyer was an effective strategy to address the financial exposure an audit can produce; the result might be to encourage more of the same behavior from other partners. To that end, when a SPLA audit candidate introduces a lawyer into the discussion, Microsoft tends to dig their heels in. What can be a relatively friendly engagement, can become contentious and drawn out.
Ideally you need to be proactive and engage with a SPLA Software Asset Management specialist that also has compliance expertise BEFORE you get a notification, like Altaris Cloud. A SPLA audit is not so much a legal engagement as it is the work of a forensic accountant. You need someone who understands what SPLA auditors looks for and what data they request. Altaris Cloud can help you identify issues before it is too late by mimicking the exact SPLA audit process and then providing guidance on how to report going forward thereby helping to mitigate immediate financial exposure.
There is some legal work around fine-tuning the language of end-customer contracts. That is an area where we have a lot of experience and know exactly what language you should have in your end-customer contracts to minimize exposure caused by customer-installed software. Ultimately the service provider is responsible for any software in their environment. Don’t forget what’s in the SPLA you signed:
If you want to talk more about your SPLA we’re happy to speak to you. To book an appointment, with no obligation, email us at info@altariscloud.com , simply reply to this email or click the button below to book an appointment through our online booking tool.
Your Microsoft Licensing Experts at Altaris Cloud