- 1 min read

ISV Licensing and Hosting: Understanding the Restrictions

img of 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:

ISV Licensing Basics

  • 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.

Hosting 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.