Rising to the software licensing challenge

13th July 2012

If you are trying to get more bang for every IT buck you spend now might be a good time to revisit your approach to the management of software licenses – and the tools you are using to do this.

Software licensing can be a complicated and contentious issue whatever your role in the associated ecosystem, as the recent European Court of Justice judgment in the case of UseSoft GMBH v Oracle International Corp highlighted. But rather than add to the untold column inches being generated by commentators, FSN writer Lesley Meall is going to focus on more practical software licensing concerns.





How can organisations avoid buying too many software licenses (and wasting money) or too few software licenses (and risking fines) when these fates are increasingly difficult to dodge? Well, it isn’t easy, for reasons including: the proliferation of personal mobile devices amongst workers, the spread of cloud software and virtualisation, the variety and complexity of product licenses and their use rights, and an increase in vendor compliance efforts – which is not hard to understand. 

The latest Business Software Alliance global piracy survey found growing numbers of business decision makers willing to use software that is not fully licensed, which leads to an estimated $63.4bn in lost revenues. ‘Piracy is a drain on the global economy, IT innovation and job creation,’ says Robert Holleyman, BSA president and CEO. ‘Governments must modernise their intellectual property laws and expand enforcement efforts to ensure that those who pirate software face real consequences.’

The promise of audits or compliance reviews that can lead to punitive settlement demands from the BSA, the Software & Information Industry Association or software vendor, may well be enough to convince organisations to be more proactive in their management of software licensing and maintenance charges. But there is another good reason to do this: yours may be one of the very many organisations that is paying for licenses for software that simply doesn’t get used.

According to research from various analyst companies, as much as half of enterprise software is not being fully utilised, and the proportion of licenses being paid for but not used ranges from 25 per cent to 75 per cent. So how can the 85 per cent of finance directors and CFOs who are responsible for software licensing in their organisations (according to BSA research) ensure that they pay for just the right amount of software licenses, rather than too few or too many?

Taking a periodic inventory of all devices and the software being used on them may no longer be enough, and can be increasingly difficult to achieve even with the support of software asset management (SAM) systems. If your SAM tells you how many licenses you have purchased for each product (or service) and how many installations (or users) it has only at a single point-in-time, you may lack the detailed and dynamic data you need for license compliance (let alone optimisation).

‘It’s virtually impossible for manual systems and point-in-time asset management to track the dynamic use of virtual machines and desktops and application migration,’ says David Znidarsic, VP technology, Flexera, ‘so enterprises need tools that can continuously collect the data required for compliance with their licensing agreements,’ which is what you might expect him to say, as Flexera is one of a number of specialists providing systems that do this.

But he still has a point. Defining software licensing agreements and managing to those licensing agreements is difficult even with a static hardware estate. So it’s important to handle software asset management with tools that reflect and can cope with the dynamic nature of workforce IT use – whatever that is – or put processes and systems in place to stop it getting out of control and making the optimisation of software licensing (and maintenance contracts too) almost impossible. 

The websites of the BSA and SIIA provide advice and free tools that finance professionals can utilise to manage risk, compare their approach to software asset management against ‘best practice’,  decide what they need from a SAM solution, and understand some of the more obscure areas of software licensing such as ‘fonts’.