The economic downturn man has put pressure on organisations to extract the maximum value from their IT budgets, but as FSN writer Lesley Meall reports, there are signs that many are overlooking one of the easiest ways of doing this: improving their management of software licenses – and software developers know this.
According to research from the Federation Against Software Theft (FAST), during the past twelve months, the number of organisations that have been the subject of supplier software audits has risen from 30 per cent of respondents in 2009 to 50 per cent of respondents in 2010. “With so many publishers clamping down on software licensing, this is not an issue that managers can afford to ignore,” suggests Matt Barnes, managing director of FAST, adding: “The legal implications of being non-compliant are greater than ever.”
The cost of not being compliant is not insignificant. During 2010 industry watchdog, the Business Software Alliance (BSA), received its largest ever “settlement” of 315,205,272 Japanese yen (which is around US$3.3m) for software license infringement, from a Japanese manufacturer based in Kansai, after a tip off to the BSA led to a software audit that revealed 3,913 copies of unlicensed software, including Adobe Illustrator and Microsoft Office.
“I hope that this landmark case reminds organisations worldwide that their possible oversight, or indifference to software copyright, could lead to serious legal ramifications and financial risk,” comments Robert Holleyman, president and chief executive of the BSA. And just in case you think the BSA is interested in only in big fish, similar copyright infringements on a smaller scale recently led to small businesses being fined £10,000 (in the UK) and US$50,000.
Being taken to task for “oversight and indifference to software copyright” is not the only reason to take a proactive approach to software license management; it seems that a great many organisations are paying for software licenses for applications, modules and functionality they simply do not need or use. “Almost every organisation will have accumulated unecessary licenses for redundant and under-utilised applications,” says Jon Mulligan, MD with Openplain. “They add little or no value to business and they are a silent drain on finances.”
As a specialist provider of application usage software (which identifies unused software and determines the most effective licensing model), you might expect Mulligan to say this, but his assertion is supported by analysts including Gartner, Forrester and IDC. According to research undertaken in the UK during 2010 by IDC, over half of enterprise software applications are not being fully utilised, and the proportion of licenses that are being paid for but not used ranges from 25 per cent to more than 75 per cent.
IDC estimates that nine out of ten small, medium and large organisations should be doing significantly more to effectively manage their software investment. “The picture that this data paints is one of organisations failing to understand that the software applications they use are business assets, and that these assets must be managed like other revenue-generating assets, such as PCs, servers and phones,” says Ed Cordin, consulting director for IDC EMEA, who suggests software asset management (SAM) as the solution.
The definition for SAM varies depending on which organisation you ask, but the term is generally used to describe a set of business practices that are used to manage and optimise the purchase, deployment, maintenance, utilisation and disposal of software applications within an organisation. How these business processes are mechanised also varied between organisations: some use manual paper based processes, some use spreadsheets, some use specially designed SAM systems, some use various combinations of these.
So if you don’t already have any SAM processes in place, where do you begin? By taking inventory: find out which software you have in place across the enterprise, on PCs, notebooks, thin clients, and servers, whether they are on physical, mobile virtual or cloud-based platforms. There are lots of specialist software audit tools out there designed to help, and organisations that will undertake an audit (and various other related activities) on your behalf – no matter what size or shape your organisation is.
For example, the California-based charity Contra Costa ARC, which has 350 staff using PCs spread across 12 sites, uses an on-demand system, SAManage, to automate its software audits. SAManage monitors software use on all of the charities PCs no matter where they are physically located and across multiple networks. “Its agents run in the background on each PC,” explains Jackson Riggen, the charity IT coordinator, “then they call in to the server and dynamically provide updates on a regular basis.”
The UK public services company Amey is larger and more complex and has taken a different approach. It carries out its own internal software audit on the 6,000 computer systems attached to its network using a discovery tool provided by FrontRange Solutions; it also undertakes manual audits to ensure it includes devices that are not attached to the network (such as unused equipment sitting in cuploards), and updates these at regular intervals, and it commissions Fast to do a full audit once each year.
It’s important not to view inventory as a one-off exercise, at the best of times, but the recession has meant millions of people losing their jobs, and many of them were the sort of workers that use software. “A knowledge worker usually has a copy of Microsoft Office,” observes Peter O’Neill, VP and principal analyst with Forrester Research. “You can make a direct correlation between unused software and laid-off workers,” he says, so mindful of economies of scale, medium and large organisations, in particular, may benefit from taking inventory more frequently.
Whilst vital, however, taking an inventory is just a first step on the road to effective software asset management. The next step involves collecting all of your software licenses and any related documentation together in one place. For some small organisations, this can be done manually and/or with the support of existing software and systems, but as organisations grow in size, so does the likelihood that specialist software and services will offer a more cost-effective approach.
The IT team at Amey, for example, has used the Software Oragniser system from Right2Use to create a software licensing database, which is used to manage the licenses and ensure that they match the software Amey is using. It has also used the database to save money, by rationalising the maintenance agreements it has with suppliers. “When you understand what you have you can talk to suppliers and get better rates,” says Sue Madden, IT network compliance analyst, “and we have been able to save tens of thousands of pounds.”
Because of the proliferation of software and the myriad devices it could potentially be on, and the positive and negative implications of not managing it effectively, it is important to create a software asset management system that supplements these activities with guidelines for all phases of the software life cycle, and ensure that this SAM is kept up-to-date. Not only will it ensure that your organisation is prepared for any uninvited audit that could potentially take place, it could also release money from your IT budget that could be better spent on something much more productive.
