ISV Licensing and Hosting: Understanding the Restrictions

ISV (Independent Software Vendor) licenses present unique challenges for service providers offering hosting services. Here’s what you need to know:

What are the basics of ISV licensing?

• ISV licensing involves Microsoft software bundled with a third-party solution (e.g., SAP ERP with Microsoft SQL Server). This bundle is referred to as a Unified Solution.
• ISV licenses can only be used with the specific Unified Solution.
• ISV licenses must reside on dedicated physical hardware – no shared environments or virtualization.
• You cannot use ISV licenses to provide general hosting services.

How do I host end-user ISV licenses?

• End-users can bring their ISV licenses to dedicated hardware within your infrastructure.
• This requires a formal addendum to their end-user licensing agreement (EULA).
• The addendum must:
  • List all ISV licenses involved.
  • Explicitly state that the end-user sublicenses the software to you for the sole purpose of hosting their Unified Solution.
  • Include your agreement to remove all ISV software upon termination of hosting services.

Sublicensing Considerations

• Remember, the original ISV sublicensed the Microsoft software to the end-user, who then sublicenses it to you, the service provider.

Additional Notes

• ISV licenses usually lack Software Assurance or similar subscription benefits.
• This lack of subscription benefits limits License Mobility, reinforcing the need for dedicated servers.

Key Takeaways

ISV licensing in a hosting environment demands strict adherence to dedicated hardware and formal agreements outlining sublicensing terms.