Avoiding Licensing Pitfalls

Nov 17, 2004

Allen Bernard

Many companies today have no idea of how many employees are actually using the software they are licensed to use, so they over-license just to make sure they have enough, said Laura Didio, a senior software analyst with the Yankee Group.

"This is one of those issues, asset management, it doesn't get enough attention and it has serious ramifications ... both technologically and business-wise for the organization," she said. "What you're really talking about here is sloppy housekeeping which can cost you money."

By putting in place license management procedures and software that looks at licensing from a lifecycle perspective (maintenance, help desk, upgrades, patching, retirement, etc.), it is possible to keep track of who is using what software, how often and if you need to keep so their licenses up to date, said Bruce Randall, asset management product manager for Peregrine Software. The same holds true for servers and mainframes when it comes to seat licenses.

And since maintenance and upgrade contracts are tied to licensing, there is money to be saved there as well.

"Typically what we find is companies hit the panic button and they start saying 'Oh, we have to start negotiating a new license agreement. What do we have?'" said Didio.

Then there are compliance issues, said Rebecca Lawson, also with Peregrine. With Sarbanes-Oxley coming of age this month, companies need to know where their assets are and how they are performing, since any event that has a material effect on the bottom line has to be reported. Being fined or hauled into court for breach-of-contract by the BSA or a disgruntled software vendor (although less likely than the BSA) can definitely be construed as a "material event" and have bottom-line repercussions.

"You just want to show fiscal responsibility and that you have got repeatable processes in place so you can constantly monitor what's going on," she said.

But even with the threat of fines, court action or compliance, the real driver for license management should be cost savings and security issues, said Didio.

If you don't know what software is running on the network, then illegal shareware or malware could easily be hiding on someone's desktop, for example. On the savings side, if you find out the number of people using software 'X' are less than anticipated, then you can reduce the number of licenses or move them around to new employees without having to purchase more seats.

Aggregate purchasing is another way to save money, said Jonathan Canter, assistant data center director for the Department of Environmental Protection in Florida, which recently deployed BOSS's asset management package DiagWin to get a handle on the software usage of 4,500 employees and 1,700 part-time and contract workers in seven divisions.

"We have, over time, stabilized on MS Office but we don't have the deeper control on how we move from one Office version to another and that's where you can save money by aggregate purchases," he said.

To get a handle on the problem, suggests Fred Broussard, a senior research analyst with IDC, start with existing asset management tools that you may have in house or go out and find an asset management vendor that can supply you with a suite. Put someone in charge of the job and have them file regular reports (monthly, quarterly) so you have ammo on hand for things like contract renegotiations and moves, adds and changes (MAC).

By centralizing the process and making part of the day-to-day running of IT, you will begin to get a handle on what is out there and who is using it. The good news is this doesn't have to be an overwhelming job, he said. He has seen asset management packages up and running within a day.

Once you know what is being used by whom, you can start the process of standardizing on certain software packages like MS Office for productivity and Mozilla for a browser. When this is accomplished, using imaging software to provision each new (or re-provisioned) PC, laptop, server, etc. and locking out administrative rights to end users, you can better control new software creeping into the network and changes to existing setups.

"[I]ts better to have (users) change from a known configuration that you control than it is to have them change from one you never knew what was on it in the first place," said Broussard. "And that's where these system asset management suites come in."

In the long run this will give you tighter control over your licenses and a better ability to meet regulatory, contract and cost-savings targets.


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