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Negotiating the Result of a Microsoft SPLA Audit: Tips and Strategies

Negotiating the result of a Microsoft SPLA audit can be a tricky business. It requires a certain level of finesse and an understanding of the ins and outs, not just of licensing but of your overall strategic relationship with Microsoft.

What is Microsoft SPLA audit?

Microsoft Service Provider License Agreement (SPLA) is an agreement that allows you to offer Microsoft software as a service to your customers. As part of the agreement, Microsoft will conduct periodic audits to ensure that you comply with its terms.

Why is a proactive approach important?

An audit may uncover, and it usually does, at varying degrees, mistakes and process shortcomings that result in non-compliance, both in terms of usage of licensing and in complying with the intricate terms and conditions of SPLA.

When negotiating the results of a SPLA audit, it is essential to take a proactive approach. The path to successful audit mitigation starts well before the actual audit.

Tips for successful SPLA audit negotiation

1. Ensure Accurate and Up-to-Date Documentation

It is vital to ensure that all documentation related to the audit is accurate and up-to-date. See that all licenses being used are adequately documented and that any changes to the agreement are correctly reflected.

2. Understand Reporting Requirements

Microsoft requires that all authorized users are reported, and any misunderstanding of this requirement can lead to significant audit penalties. It is rarely recognised until it's too late, but user licences account for about 80% of all audit penalties.

As such, it is crucial to take the time to learn the reporting requirements and to ensure that all users are correctly counted as well as processor licenses.

3. Understand the Specifics of the Audit

Understanding the intricacies of the SPLA audit and its potential impact on the service provider's entire business is essential. Talk to an expert to learn about the audit process, the data they are looking for, and the typical mistakes.

Remember that SPLA audits are different from "normal" Microsoft compliance audits and require a different approach.

If possible, negotiate any changes that may be required to bring your services into compliance in addition, and ideally, instead of the monetary penalty.

4. Remember that SPLA is a Complex Agreement

As such, it may take some time to fully understand the audit's implications and negotiate a satisfactory resolution. SPLA has enough ambiguity and complexity to entertain even a seasoned professional in the legal and compliance sphere.

Together with a good negotiator, they can use the knowledge of the agreement and the process to their advantage.

5. Build and Maintain a Strong Strategic Relationship with Microsoft

A strong strategic relationship with Microsoft is essential to mitigate any unfortunate compliance mistakes proactively. As a good example, a clear Microsoft Azure consumption roadmap is often a considerable leverage in a negotiation.

Talk to a negotiation expert

At the end of the day, a successful SPLA audit negotiation aims to reach an amicable agreement that benefits both the service provider and Microsoft. With the right approach and a clear understanding of the agreement and the process, it is possible to achieve a positive outcome.

Use the form below to arrange a meeting with our Chief Negotiations Expert, Daryl Ullman and discuss your SPLA audit questions.