Getting to grips with software licencing

IT is becoming more embedded within the business, with more use of IT for business processes and communications. Things are changing more quickly too. Virtualisation is now well established and accepted and there is a small but growing movement to dynamic IT infrastructure, such as resource pooling or internal private cloud. On the client side, desktop and application virtualisation are adding another layer of complexity. This is all putting pressure on companies to comply with licencing terms, but contrary to many other areas of IT management this area remains for many a “black art”.

Three considerations

When it comes to licencing, there are three main areas to consider. The first is the basis on which licencing takes place, whether it is by server, socket, core on the physical side, or per seat, concurrent or subscription on the user side, never mind any limits to enterprise or site licenses. This would also take into account things like support and maintenance.

The second aspect is the terms and conditions that govern the use of the software. This affects aspects such as the term of usage, resale potential, the flexibility of deployment for allocation or reallocation, and the ability to ramp up or down as demands dictate. It can also determine how independently different software licence ’pools’ can be negotiated, whether as a single block or as independent groups.

The third, and the focus of the discussion in this article, deals with the real foundations of licence practice – and how that is management. This covers what has been purchased, what is actually in use or duplicated, what comes under support, how everything is audited or verified and whether licencing meets the requirements of the business.

Commoditisation inevitable

It would seem obvious that in this day and age something as fundamental as the building blocks of IT infrastructure would be moving towards commoditisation. This has been steadily happening in terms of the industry standard servers and, to some degree also, the network. But when it comes to software, problems abound.

Software procurement may seem less about buying and managing IT and more about qualifying as a lawyer. Things are made even more complex because every supplier seems to have a different take on how to do things. The end result is that licencing for end-to-end service delivery that takes in operating systems, databases, middleware and applications is a massive challenge and far more difficult than it needs to be, or should, be.

Given the complex constraints that many IT buyers and managers work to, it is little wonder that licence management is frequently cited as a major issue. This is not helped by the fact that in a recent survey, IT asset management and software licence management tools were cited as the tools that IT managers were most unhappy with. When it comes to licence management, there is a lot of manual work going on trying to keep on top of things with very little formal policy. With IT operations staff often overstretched, having up-to-date records is difficult to achieve and things fall through the cracks.

The end result is that many companies take a conservative approach to licencing in order to achieve compliance with licencing terms. Rather than buying from a position of strength with solid information on actual usage, they instead compensate for uncertainty by buying more licences than necessary to cover all possible use cases rather than what is needed. Gaps in knowledge also mean that shelfware (software no longer in active use) keeps being renewed and support costs remain higher than necessary. Others may just run what is needed and wait for an assessment to bring things into line, potentially putting themselves at risk of fines or damages for non-compliance.

Room for improvement

So what can be done to improve the situation? Given the costs of licencing overall, simplifying and rationalising the approach can pay big rewards. Getting started is often the hardest thing, when there is little structure in place. The potential rewards are high, so it will be a good strategy to dedicate some resource to it.

The best path for many will be to try out or purchase discovery tools to get a feel for the licencing situation, then choosing the best plan of action. This may involve further investment in training and tools. It may even lead to bringing in some of the increasing number of licencing specialists to do an audit. They can help to establish a baseline and advise on ways to manage, optimise and negotiate licences. Longer term, if the benefits are good enough, it may justify implementing dedicating resource to optimising licencing and putting in place a management infrastructure keeping in mind the difficulties associated with the current generation of tools.

In it’s own way, the difficulties of managing software licensing is a wake-up call for the industry at large – for how much longer can this ’last-century’ approach to licensing persist? Suppliers are making it much harder than necessary for companies to buy and implement software. Predictability, commonality and transparency are needed to build a management practice that works reasonably practically. In most cases it could be argued that all of this is lacking. For all those suppliers talking about the journey to the cloud, it’s time to put the money where your mouth is.


Click here for more posts from this author

Through our research and insights, we help bridge the gap between technology buyers and sellers.