Microsoft provides a choice of licensing models for Independent Software Vendors (ISVs) that want to offer their own software as a hosted service. These ISVs, commonly known as “Self-Hosted ISVs,” can license their software in two ways. This guide outlines these two licensing models, describes the benefits of the Service Provider Licensing Agreement (SPLA) program, and provides an in-depth look at the “Self-Hosted Applications” use right and its requirements.

The SPLA serves as the primary licensing program and offers a flexible option for all service providers, including ISVs, that offer their applications as a software service. However, if you are an ISV with a qualified Unified Solution, the “Self-Hosted Applications” use right, available through the Product Terms, may be the right choice for you.

The SPLA serves as the primary licensing program for all hosting business models, including ISVs who host their own applications. It offers a monthly, pay-as-you-go licensing model under a separate agreement that supports hosting and delivering software services. SPLA includes a variety of products and hosting scenarios to help you deliver highly customized and robust solutions to your customers. Learn more about the SPLA program.

ISVs with qualified Unified Solutions can take advantage of the “Self-Hosted Applications” Software Assurance benefits. The Microsoft Product Terms describe these use rights. This licensing option, separate from SPLA, includes qualification criteria, specific licensing requirements, and a limited set of products. ISVs that license through this option must: 

• Host a qualified Unified Solution, and
• Purchase the required licenses with Software Assurance under a Commercial licensing agreement (e.g., Microsoft Enterprise Agreement) or, in the case of Windows Server only, license the software under SPLA or through Microsoft Azure. [1]

[1] SPLA and Azure are valid licensing options for Windows Server only. These options do not apply to other Microsoft products included in a Unified Solution licensed under the Self-Hosted Applications use right.  

To license your software and Microsoft products (Unified Solution) under the “Self-Hosted Applications” use right, Microsoft requires that you meet all the criteria listed in the Product Terms Appendix B: Software Assurance Benefits, under the heading “Self-Hosted Applications.” Be sure to read that section in the current Product Terms thoroughly to understand the requirements and licensing rights.

In short, your software must meet each of the following requirements:

• Add significant and primary functionality to the Microsoft products
  If you only host a Microsoft product in your data center for access by other customers, you do not meet the requirement to add significant and primary functionality (for example, hosting Microsoft Exchange for your customer’s employees). However, if you create a line-of-business application that adds significant and primary functionality to the Microsoft software platform, you qualify. Review the current Product Terms for the formal definition and specific requirements.
   
• Be combined only with Microsoft products that are eligible for Self-Hosting
  You can include only the products listed in the Product Terms that permit Self-Hosting—such as SQL Server—in a Unified Solution licensed in this manner. The Product Terms provide this information. If your Unified Solution includes any Microsoft products that do not permit Self-Hosting (for example, Microsoft Office or SharePoint Server), you must license all Microsoft products in your solution through the SPLA program.
   
• Be the principal service and sole point of access to the Unified Solution
  Your customer must interact with and primarily access your software; they must never directly access the underlying Microsoft software stack. If you want to provide your customers with direct access to the Microsoft products (for example, access to SQL Server), then you must license your Unified Solution through SPLA.
   
• Be delivered over the Internet
  If you license your Unified Solution through the Self-Hosted Applications use right, you may not load it onto your customer’s device. You must provide the Unified Solution as a hosted service through the Internet, delivered remotely to your customer. You may not install any component of the Unified Solution at your customer’s facility. If you want to deliver your Unified Solution (or any of its components) by installing it on a customer’s device or at their facility, you must license it through the SPLA program (subject to that program’s limitations).
   
• Be owned, not licensed, by you
  You must own the intellectual property that you combine with Microsoft Self-Hosted Applications to create a Unified Solution. If you license the intellectual property that serves as the primary application or service from another company (including Microsoft), you must license your solution through the SPLA program. For example, if you provide Microsoft Exchange as your primary service, you do not qualify for the Self-Hosted Applications use right and must license your solution through SPLA.

If your Unified Solution meets all of the above qualification criteria, you can license your solution through the Self-Hosted Applications use right, as defined in the Product Terms. You must acquire the appropriate licenses for each Microsoft product used in the Unified Solution, based on the individual product requirements listed in the Product Terms. You must also acquire all required Microsoft licenses through a Microsoft commercial licensing program that includes the Self-Hosted Applications use rights (for example, the Enterprise Agreement). If you host the Unified Solution from Azure servers or from the data center of another Authorized Licensed Mobility Partner, you must acquire Windows Server IaaS—for Windows Server only—through Azure, the Azure Hybrid Benefit, or SPLA. 

Access Licenses:
In addition to licensing your servers, you must acquire the required access licenses to make your Unified Solution available to your users. For example, you may need Client Access Licenses (CALs) or External Connector (EC) Licenses. Review the product-specific sections of the Product Terms for details. 

Active Software Assurance:
You must maintain active Software Assurance coverage on all required Microsoft licenses used in and supporting your Unified Solution, including all required Access Licenses. If you let your Software Assurance coverage expire and do not renew it, you can no longer deliver your Unified Solution under the Self-Hosted Applications use right and must instead license it through SPLA. 

With the Self-Hosted Application Software Assurance benefit, you can combine the Self-Hosting rights with mobility rights to deploy your Unified Solution on qualified multi-tenant servers. If you choose this deployment option, you must license the Windows Server product that supports your Unified Solution through an Authorized License Mobility Partner, your own Service Provider License Agreement, or another Volume Licensing offering that permits Windows Server deployment on shared hardware. 

If your Unified Solution qualifies for Self-Hosting and you own Windows Server licenses with Software Assurance, you can use the Azure Hybrid Benefit for Windows Server and apply License Mobility rights for the other included Self-Hosting Applications to upload your Unified Solution to Azure. For details about this option, review the Azure product entry in the Product Terms. 

When you deploy your Unified Solution on multi-tenant third-party servers using your License Mobility through Software Assurance benefit, you must complete the License Mobility Verification form, submit it to your reseller or to Microsoft, and comply with the terms of both the Self-Hosting rights and License Mobility through Software Assurance. Learn more about the License Mobility through Software Assurance benefit. 

An Authorized License Mobility Partner must provide Windows Server through SPLA to support this deployment option. 

If you are an Authorized License Mobility Partner under your SPLA, you may deploy your Unified Solution on your own multi-tenant servers. You must report the Windows Server usage within the Unified Solution under your SPLA and comply with the terms of SPLA, as well as the terms of Self-Hosting and License Mobility through Software Assurance for the Self-Hosted Applications. 

If you choose to deliver your Unified Solution under the Self-Hosted Applications use right, you must license the Microsoft products included in your solution through a Volume Licensing program that provides the Self-Hosted Applications use rights. The only exception is Windows Server, which you can license through SPLA or Azure instead.

If your Unified Solution requires an additional product that the Self-Hosted Applications use right does not cover (for example, Microsoft Office), you must license your entire Unified Solution through SPLA; you cannot simply purchase a SPLA license for Microsoft Office. The Self-Hosted Applications use right requires you to maintain active Software Assurance on all Microsoft products. 

See FAQ page.