A class of software exists in many companies that collectively is known as; “Engineering Software”, typically it is used within organisations providing new product development (NPD) or maintenance, service and overhaul (MSO) services. This software has traditionally been purchased and owned at engineering department level, so there is often a reluctance to allow SAM managers or ITAM processes to assist in managing these applications.
Industry verticals such as Aerospace & Defense or Automotive have led industry adoption, so their supply chain networks tend to have the most mature digital development processes, with the following software architecture: –
The trend over the last decade has seen many products incorporate IOT technology, delivering a new connected experience into anything from lightbulbs to lawnmowers. This requires design teams to converge mechanical, electronic, and software design simultaneously to deliver products – which has resulted in a big increase in engineering software spend.
Industry verticals such as Architecture, Engineering and Construction (AEC), traditionally developed all deliverables as 2D drawings in tools like AutoCAD. With the introduction of Building Information Modeling (BIM), engineers are beginning to incorporate re-usable 3D modeling processes enabling predictive maintenance and servicing.
Engineering tools are designed to save companies considerable time and complexity, it is therefore priced accordingly. For example, a base CAD modelling package may cost £7,000, but a package suited to an automotive designer could be in excess of £50k per seat. Many software tools require a team (or outsourced company) to manage the data, processes and upgrades, which adds a substantial overhead to the cost per license.
Unlike more traditional products from vendors such as Microsoft or Adobe, where software is allocated for months or years, engineering software is allocated on a dynamic basis over hours and minutes. The software is run from a central license server, typically FlexNet/FlexLM from Flexera although similar derivatives exist. This allows for a greater ratio of users per licenses owned. Often companies work on a two thirds rule, with 200 licenses serving 300 users.
Engineering Software is transitioning from Perpetual with Maintenance to a Subscription based model, often to support a push to SAAS and other cloud delivery models. FlexNet* is a flexible system allowing Features, Bundles, Tokens, Modules and Collections to be managed on a check in/out basis down to just seconds of use. Each vendor typically offers functionality in several different packaged ways, either stand alone, tokens or bundles. Licenses are very rarely calculated per CPU or consumption, unlike business software. Contractual restrictions on geographic use are common and this is where many companies fail at a compliance level. License audits tend to be rare, but the trend shows a steady increase; for example, Autodesk called out their audit revenue in their FY20 results earlier this year.
*Many products in this area use FlexNet as their system for managing licenses so this is separate to any tool you might have in place for managing your estate.
To conclude, Engineering Software typically has a much higher cost per user than business software. Under utilisation can often occur during the different phases of a design project or when a new software capability becomes available. Vendors may supply basic license log file tools, but these lack the level of detail required to analyse trends for decision making. Ensuring the license ratios are efficient can be challenging, but following ITAM best practices such as ensuring you know what licenses you have, where you can use them and the actual utilization will ensure you are in a great position for the next license renewal negotiation. Plus, with cost reduction being a top priority right now, looking toward your engineering software may enable you to uncover new, previously untapped veins of savings.