Coping with software licensing in situations beyond your control

ITAM News & Analysis

Coping with software licensing in situations beyond your control

After days of reporting, financial discussions, and negotiations with different stakeholders, all your software licensing is in order.

The IT team has a firm grip on which users have access to which versions of which applications, while the CFO is happy because the license costs were negotiated down successfully.

Then the CEO strolls in and announces that a merger is taking place next week, which means all those license reports will be outdated. Worse still, those carefully constructed volume discounts that you had in place will need to be re-negotiated.

For those responsible for software licensing decisions, now is probably a good time to ponder what is within your control, and what is not.

What do, and can, you control?

There are many situations that can upset the licensing apple cart, and while they don’t take place every day they can happen regularly enough that they should be factored into your planning.

These situations break down into three groups:

• Company-led – this situation is due to wider company changes including events like a merger, acquisition or other large shift in company workforce such as the sale of a business unit. In this case, what the company does will lead to a change in licensing status and potential work for the ITAM manager.

• Vendor-led – the IT industry is a constantly changing one; vendors can be suddenly sold to another company or suddenly want to re-arrange their licensing models to suit them better. Whether these changes are due to shifts in policy or the ownership of a product, the vendor will be the one to initiate any potential change in licensing when it comes to the next review date.

• Wider trends – this group covers changes that are outside the control of any one company or vendor, and will tend to be specific to a vertical market or type of organisation. For example, in the public sector, changes in the political situation may affect how IT requirements within public organisations are fulfilled – witness the increasing rise of G-Cloud for procurement in the UK, or the end of large licensing agreements between central government and suppliers for the NHS.

The important lesson to bear in mind here is how the preparation for internal software licensing strategy can be re-used when something unexpected takes place.

So what can you do?

Simple steps like keeping up-to-date records of software licenses and versions installed will help with preparation for whatever new situation the organisation finds itself in.

One thing to bear in mind is the process that the software licensing team will have to go through during discussions. If license management is still a manual process, then the extended time required to gather data has to be factored in during the planning stage.

For companies that have automated either part or all of the software license management process, there is an advantage to be gained in terms of time saved and accuracy of records. Once you have these records to hand, it is then important to look at what impact the change in situation will have both in the short and long-term.

In the case of a merger or acquisition, getting the right software license data from the other organization will be the first step, followed by some consolidation on reporting so that like-for-like comparisons can be made. Overall reports on what software license costs have to be accounted for can then be created. These reports can be useful for internal planning – for example, to understand what software products are in place and what versions they are running, and for negotiating new licensing agreements for the future.

Preparation work here can help save significant costs

Rather than just re-buying licenses or applying a ‘same again’ policy, this can be an opportunity to look at actual usage patterns and software allocations.

Automation of the data gathering process around software licenses will provide a huge amount of help in putting together business cases and supporting investment requests.

Where there are changes in software licensing strategy, modeling of costs for both the current and the new license approach will be necessary. Many vendors are looking to move to subscription-based pricing instead of one-off costs for perpetual licenses, which will have an effect on operational expenses and overall IT budget planning. At the same time, any change in licensing can also be an opportunity to re-evaluate how that particular software product is being used within the organisation.

In summary

All of these situations have one thing in common – that the best-laid plans can easily be scuppered by changes in circumstances. My advice to anybody who finds themselves in one of these situations would be:

• Use your list of software assets to your advantage – having an up-to-date software asset catalogue is essential for day-to-day management, but it is also great for dealing with unforeseen problems

• Understand what your software usage levels are – when something does change, this will help you respond in a proactive way, rather than simply saying “same again”

• Measure apples to apples – if you are using certain license versions compared to other licenses or other products at a different company, then make sure that you have the same features and functionality in mind when looking at cost comparison and new license agreements. As an example, this could be looking at different versions of Microsoft Office. One has four products in it, while the other has eight. You could also be in the situation of comparing Microsoft Office Business to (say) LibreOffice – the latter is “free” but it does not have as much in it so might have to be supplemented with a stand-alone product. Again, look at an apples-apples comparison.

• Look at all your licensing options – this is another way to use asset usage data to your advantage. Why not evaluate moving over to cloud or software-as-a-service billing if this will be cheaper overall?

• Plan ahead – gathering this data should not be done when it is needed. Instead, either set aside budget for this activity or automate the process.

So now I ask you, if and when you are faced with changes outside of your immediate control, how would you and your organisation fare?

This article was contributed by Marc Stein, Executive Director of Software Sales for Dell Software Group. He leads Dell Software Group’s activities around endpoint systems management across Europe, with a focus on developing customer relationships and ensuring that the needs of those organisations are met.

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