It’s time to look beyond SPLA

For years, the Microsoft Service Provider License Agreement (SPLA) has been the cornerstone for managed service providers as they deliver cloud-based solutions and keep costs under control. SPLA made it relatively simple to offer Microsoft services on a pay-as-you-go basis, billing only for what was used, and reporting usage monthly. But the IT landscape is evolving fast. Hybrid and multi-cloud models, which combine private data centers with multiple public cloud platforms, are becoming the new normal for enterprises of every size and type. Customers demand flexibility, agility, and the ability to choose the best cloud—or combination of clouds—for every workload.

At the same time, the number, scale, and diversity of cloud services are exploding. This means the complexity of managing both technical operations and financial control across clouds has grown exponentially. For service providers, continuing to rely on the SPLA model alone is becoming not only outdated, but also risky as they strive to deliver maximum value for clients. In today’s cloud-driven reality, to stay relevant and competitive, it’s time to look beyond SPLA.

Not long ago, most service providers could control costs by tallying up SPLA licenses and monitoring infrastructure manually. Monthly reporting captured usage and billing remained relatively predictable. But now, the cloud is a bustling marketplace of hundreds—sometimes thousands—of services, subscription models, and pay-as-you-go resources. Add in increasingly sophisticated customer needs, and you have an environment where yesterday’s processes simply aren’t enough.

In this new cloud era, cost management is one of the central challenges for both service providers and their customers. Complex charging models, shared responsibilities, shadow IT, and a surge of services running across hybrid environments all threaten to drive up costs—and erode margins—if not managed properly. SPLA, while once a shield against runaway licensing expenses, doesn’t provide the transparency nor control required to handle modern cloud spending.

Enter FinOps, short for Financial Operations. FinOps is an operational framework and cultural practice designed to help organizations manage cloud costs with discipline and strategy. But it’s more than a set of accounting rules or tools—it’s a team-based approach that breaks down silos and brings together finance, operations, and engineering (or technology) stakeholders to collaborate on cost visibility, accountability, and optimization.

So why should service providers care about FinOps right now?

Because FinOps solves the very problems that SPLA can no longer address:

• Visibility: FinOps eliminates the obscurity of cloud spending. With SPLA, cost is often a line item at the end of the month, inadequately linked to specific actions or business units. In a FinOps culture, stakeholders have a clear, granular view of cloud consumption throughout the organization.
• Accountability: In the past, only IT or procurement departments worried about SPLA reporting. FinOps spreads accountability organization-wide, so everyone from developers to execs can see and own the financial impact of their choices.
• Optimization: FinOps is continuous. Through real-time data, automation, and shared best practices, organizations can regularly identify inefficiency, reduce waste, and reinvest savings. SPLA simply can’t match this dynamic posture.
• Agility: The cloud changes at lightning speed. FinOps ensures your cost management adapts just as fast.

Ultimately, a strong FinOps practice translates to improved profitability, reduced financial risk, airtight compliance, and even enhanced overall security as teams better understand how and where cloud resources are running.

1. End-to-End Visibility

Consider a common scenario: you’re running workloads for dozens—or even hundreds—of clients across multiple clouds, subscriptions, and service types. How do you know which teams are responsible for what spending? How do you prevent costly surprises on your monthly bill?

A FinOps approach empowers service providers to collect, aggregate, and analyze cloud usage data from every environment—public, private, or hybrid. Not only can you track spending down to individual services or users, but you can also map cost to business outcomes or customer projects. This level of visibility highlights trends, exposes abnormalities, and enables billing precision that SPLA alone can’t match.

2. Waste Elimination and Cost Optimization

It’s easy for cloud resources to be allocated and forgotten, leading to unnecessary expenses. For example, virtual machines left running overnight, oversized storage allocations, or multiple versions of the same application. FinOps turns this guesswork into actionable insight by:

• Surfacing idle or underutilized resources
• Highlighting “zombie” environments that serve no business purpose
• Recommending optimal instance types or pricing plans

By continuously monitoring and reporting on these opportunities, you can help your customers slash costs and reinvest in high-value areas, all while boosting your own margins.

3. Automated, Real-Time Reporting

Cloud platforms increasingly offer built-in tools for real-time monitoring, forecasting, and cost recommendations—but these only deliver value if they are part of an overarching FinOps practice. By leveraging automation and analytics, service providers can anticipate usage spikes, allocate budget dynamically, and respond faster to changing business needs.

For example, if your client’s application requires additional compute power ahead of a product launch or seasonal spike, you can scale up temporarily and then scale back down, ensuring that expenditures align closely with actual business demand.

4. Scalability: Meeting Demand Without Overspending

A key attraction of the cloud is its scalability. Traditional SPLA models make scaling a bureaucratic and sometimes costly process, especially when estimating license needs for “peak” usage. FinOps enables service providers to match resource allocation with real-time demand, scaling up and down as necessary. This not only avoids wasted spend but also means service providers can reliably deliver readiness and performance when clients need it most—without bloated ongoing costs.

5. A Powerful Differentiator in a Competitive Market

With cost overruns now reported as the top cloud challenge by businesses worldwide (Flexera 2023 State of the Cloud Report), organizations are increasingly seeking experts who can help them manage spend effectively. Service providers who fully embrace FinOps can position themselves as strategic partners who do more than just deliver services—they deliver value and savings.

The ability to differentiate on cost management, transparency, and operational excellence can secure new contracts, retain existing customers, and build trust as a true advisor rather than just an infrastructure provider.

The Service Provider License Agreement was groundbreaking in its time, offering a viable way for service providers to supply Microsoft products without large, up-front licensing costs. SPLA provided necessary flexibility and supported the growth of managed cloud solutions for years.

But the context has changed. The cloud is no longer just about running hosted Exchange or renting SQL licenses—it's about continuous delivery, hybrid orchestration, and dynamic scaling across diverse environments. Static models like SPLA have been eclipsed by the need for ongoing, proactive financial control. Today’s environments require more than a monthly usage report and an invoice.

SPLA’s limitations are clear:

1. It doesn’t enable granular tracking across services, clouds, or customer segments.
2. It struggles with real-time reporting and lacks the flexible, cross-functional accountability demanded by today’s organizations.
3. It prevents service providers from unlocking the true scaling, automation, and optimization capabilities of the public cloud era.

The shift from SPLA-centric to FinOps-driven cloud management may seem daunting, but it is both necessary and rewarding. Here’s how service providers can start the journey:

• Education: Invest in FinOps training and certifications for your teams, particularly those in finance, delivery, and ops. Encourage cross-department collaboration and define new FinOps-focused roles.
• Tooling: Adopt cloud management and analytics platforms that deliver real-time visibility, budget alerts, cost allocation capabilities, and powerful forecasting.
• Culture: Build a culture of shared financial responsibility. Make cost optimization a standing goal in every client engagement and every cloud project.

Process: Continuously review policies, automate wherever possible, and incorporate cost management into DevOps and operational workflows.

The IT and cloud industry will continue to evolve rapidly. As customers look for partners who can help them navigate complexity, financial stewardship and operational excellence are becoming key differentiators. The Service Provider License Agreement gave service providers their initial wings, but as the multi-cloud world matures, SPLA alone won’t cut it.

FinOps is no longer a “nice to have”—it’s the operating philosophy of the modern cloud. Embracing FinOps now means gaining control, unlocking value, and delivering the expertise your customers need to thrive. The time has come to look beyond SPLA and move confidently into a smarter, cost-optimized, and collaborative cloud future.

Ready to leave the limitations of SPLA behind and embrace a smarter, more efficient approach to cloud cost management? The Octopus FinOps Platform is purpose-built to help service providers like you unlock total cost visibility, drive real savings, and deliver real value to your customers—all from a single, intuitive interface.

With powerful automation, real-time analytics, and actionable insights at your fingertips, Octopus FinOps Platform enables your teams to collaborate seamlessly, optimize spending across all cloud environments, and stay ahead of the competition.

Don’t just manage your cloud costs—master them.

Get started with Octopus FinOps Platform today and discover how effortless, data-driven cloud financial management can help you transform your cloud business.

Take control. Optimize spend. Grow with confidence. Request a demo or reach out to our FinOps experts to learn more!