In the last few years, cloud computing, hosted software, services and infrastructure, as well as mobile working have exacerbated the problems caused by already complicated software licensing pricing structures, and there is a risk of vendors profiting from the lack of awareness amongst end-users.
The recent reports of Oracle's In-Memory patch default enablement issue further brings to light the challenges that businesses are facing when it comes to obtaining visibility of their entire software estates, and how they can incur huge costs without even realising.
We spoke to Martin Prendergast, CEO and co-founder of Concorde Solutions, to discuss how businesses can proactively limit this risk and gain control of the software licenses in their entire IT estate.
TechRadar Pro: What developments in the IT industry are impacting software asset management today?
Martin Prendergast: Arguably, cloud computing has radically changed the role of the IT department, so much so that having visibility of your entire IT software estate has become a bigger challenge than ever. This is especially true when you're dealing with the kind of vast and complex infrastructures that global enterprises typically have in place.
Things like instant software updates and security patches to protect from new threats can also mean that enterprises are either in a constant battle to maintain visibility of their ever-changing software estate, or leaving themselves vulnerable when it comes to being audited by a software vendor.
TRP: How are these developments changing how software licensing is managed?
MP: Due to the fluid nature of cloud computing, it's making it a lot harder for enterprises to manage software licensing. Many workplaces are also embracing the use of mobile devices for remote working and this is making it even more difficult to keep track of the licenses you do and don't have, and usage of software. The software estate of an organisation now has the potential to change daily, so software asset managers are under more pressure than ever before to keep up to date with how many licenses the organisation has.
Enterprises are increasingly moving from the traditional Software Asset Management model to Software Value Management in order to obtain business intelligence, control, and establish governance in an increasingly complex market for IT assets, rather than just counting licenses.
TRP: What are the compliance and governance issues end-users are currently facing?
MP: Software vendors are aware of the issues that organisations are facing in terms of managing their software estates, and the major ones now have software compliance teams in place to identify firms that may be under-licensed via audits. With vendor audits increasing in frequency as the pressure mounts to identify revenue streams via back licensing and support, companies are under an obligation to stay compliant.
Some vendors will randomly select companies for auditing whereas some will actively target those who have been caught out before, so any company can be at risk from being targeted. This creates problems when companies have increasingly complex cloud-based software estates in place.
The growth of software delivery methods and usage models, coupled with the huge boom in the use of mobile devices, has added layers of complexity to software licensing. In this brave new world, companies simply can't afford to limit software and license management to their desktops.
Cloud is the perfect example of a new delivery mechanism that has the potential to deliver great efficiencies, but can also make things more complicated – particularly when it comes to software licensing. Many businesses are embracing the cloud in search of the promised land of cost-savings and boosts to productivity.
TRP: What can be done to tackle this?
MP: Companies are automatically at an advantage if they know the exact size and make-up of their software estate, since any negotiations with a vendor can be initiated from a position of confidence (if they're making good use of their business intelligence).
It is critical to have a deeper understanding of what's happening with mobile devices in your business beyond email, as this can have a huge impact on your licensing position and can expose you to compliance risk. Bring Your Own Device (BYOD) schemes are still a fledgling practice – governing use of personal devices on corporate networks by employees is one of the trickiest processes when there is no proper structure or protocol in place.
To uncover the business intelligence that you need to gain a holistic view of your software estate, enterprise-level business intelligence software should be considered. With this in hand, you have the clarity that can really help you to understand the opportunity or risk you may face when considering a move to the cloud, implementing a virtual environment, or dealing with mobile computing.
TRP: How is cloud computing and virtualisation changing the way vendors structure licensing?
MP: While licensing has typically been based on the number of users, or per processor, some vendors have noticed that the cloud adds complexity to traditional licensing structures and have worked to create new ways to get a handle on this.
Microsoft, for example, has recently replaced its three-year-old software licensing pricing structure with Server and Cloud Enrolment (SCE), a new licensing vehicle that enables customers to standardise on one or more Microsoft Server and Cloud technologies. This makes it easier for customers to plan, administer, and adapt as organisations evolve.
TRP: What should companies be paying attention to in their vendor contracts?
MP: Check the small print for things like software maintenance clauses; you may not need this if you have IT professionals in-house and you could be paying over the odds for a service that you don't need.
In addition to this, query your audit clause from the beginning – understand your contractual obligations and control what information you should and should not provide. Remember, the vendor is likely to use audits to identify revenue generating opportunities including upgrades and under-licensing, so you need to have control of this from the first instance.
TRP: What can be done to keep track of your software estate if you want to make changes to it?
MP: When keeping track of, and making changes to your software estate, making use of scenario modelling is a good way of getting a clear picture of your entire estate and also the impact of licensing, so you can communicate this to your vendor.
Having this visibility means that you know exactly what you have and what you need, and you can avoid falling into a trap of paying for additional services you may not require when your vendor suggests them to you.
About Martin Prendergast
Martin is CEO and co-founder of Concorde Solutions. He has worked with a large number of companies around the world and has helped architect, sell and deliver solutions for market leaders such as HP, CSC, EDS and Computacenter.
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