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Most, if not all, credit unions make a concerted effort to remain in compliance with their various licensing agreements. This is an already daunting task which is being made even more so with the help of Microsoft.

There has been substantial media coverage regarding Microsoft's changes in licensing fees and structures, including the impacts to business and member privacy. What seems to have slipped under the radar is the specific wording of the licensing agreements themselves and the impact that can have on credit union operations.

A number of credit unions utilize core-processing systems that incorporate Microsoft's SQL database engine. Of these credit unions, many also provide Audio Response services (Telephone-based account access), home banking services (Internet-based account access) or both.

The majority of these credit unions hold one or more Microsoft SQL Server Licenses and a number of CAL's (Client Access Licenses). The problem arises because of Microsoft's latest EULA (End User License Agreement) wording. The EULA now requires that either a CAL must be in place for each device that accesses or interacts with the SQL database, directly or indirectly, or a processor license must be in place for each processor on the server (a two- processor server requires two processor licenses, each at a cost of just under $5,000).

The problem? A member utilizing the credit union's Audio Response Unit (ARU) to check his balance is interacting with the SQL database indirectly. Thus, according to Microsoft, the credit union would either need to have a CAL for that member or have processor licensing in place.

Clearly having a CAL in place for every member would not be cost effective so employing processor-based licensing is the only real option. Unfortunately very few credit unions are even aware of this additional burden.

Seem unbelievable? Brad Smith, Seattle Territory Manager with Microsoft Corp., says that questions regarding this are asked all of the time, but the bottom line is ". . . if it uses a SQL database, even through one or more applications, systems or gateways, it is considered a device and requires a license, either a CAL or a processor license."

The cost impact of going from a standard server license at about $ 650 plus the cost of the CAL's to a processor based license at just under $ 5,000.00 per processor can be significant, especially for smaller credit unions.

What is the moral of this story? Read your licenses very carefully, small changes can mean big dollars!

For more information on this subject please visit the Microsoft SQL Server Licensing Site:

Lester Warby III is a chief information officer at Seattle Metropolitan CU.

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