Increasingly today, there is awareness of the risks associated with unmanaged assets, but there is a distinct lack of importance assigned to software licence management and optimisation. Enterprises commonly make the following mistakes when dealing with their software estates:
- Making ad hoc purchases - Allowing employees to make ad hoc purchases and not controlling authorised purchases is a common occurrence. Enterprises often buy licences as needed in a piecemeal fashion, rather than under a volume purchase agreement, which can be much more cost effective.
- Not tracking installation and use - By tracking installation of software and its usage, enterprises may be able to substantially reduce ongoing maintenance payments – either because the applications are not being used or because they are no longer supported by the vendor.
- No central repository - A central repository for keeping proof of software licences so that they are easily accessible for review allows enterprises to quickly comply with vendor audit requests, saving time and money.
- Not tracking renewal dates - Not keeping track of software licence agreements and renewal dates makes enterprises vulnerable to lapses in software assurance or other maintenance programmes, which can prove costly for enterprises. Some vendors may demand that enterprises just pay maintenance retrospectively to the renewal date, whilst others could make organisations re-purchase the licences.
- No communication between departments - IT operations must work with procurement to ensure that software is installed and used in accordance with the respective licence agreements to avoid software compliance issues. This is often not the case.
- Not purchasing maintenance at the right time - The right time to purchase maintenance is when enterprises are looking to be part of an upgrade. For example, Adobe has a couple of new software releases planned this year. If enterprises buy maintenance before the release is announced, the price will be significantly lower and they will become automatically eligible for that product upgrade.
- Not ascertaining strategic requirements - Ordering licences without determining what the enterprise truly requires over the longer term could be an expensive mistake. For example, an enterprise might need just Microsoft Exchange & Windows Client Access Licence’s (CALs) now, but in six to twelve months time decide that it actually needs to deploy SharePoint. In the context of this example, a CORE CAL would be the better option – offering all three applications in a bundle - as it will save the enterprise money in the long run.
- Assuming licensing rules don’t change - Licensing rules change frequently and enterprises need to stay on top of all the vendor rules and regulations. Not doing so can result in enterprises being out of compliance, which could be a costly oversight if audited by software vendors. This situation is now being further exacerbated with the proliferation of virtualisation technologies and cloud computing.
- Not applying the product use rights - Product use rights define how software licences can be consumed. They include upgrade, downgrade, second use, virtual machine use and multiple version rights. Accurately applying them can drastically reduce licence consumption and hence reduce the need to buy more licences.
- Not automating enterprise licence optimisation - An optimised licence environment cannot be achieved without an automated solution. Enterprise licence optimisation solutions, also known as next generation software asset management tools, enable enterprises to collect all the necessary data - from asset inventory to purchase orders and organisational data - and apply licence entitlement rules to generate the necessary reports to effectively manage software licences.
Enterprise licence optimisation is not just about an improved vendor licence compliance position, it is also about taking a strategic approach to understanding the software needs of enterprises so that the software deployed contributes to their efficiency and effectiveness whilst maximising the return on investment and reducing costs.
Interestingly, according to the InformationWeek Analytics Outlook 2010 survey, demand is on the rise for new IT projects to help automate and improve business processes. Over 50 per cent of respondents reported that IT demand is expected to be higher this year than in 2009.
This trend is likely to be representative of Europe as well. Enterprise licence management is one area where automation can potentially reduce overall IT costs by five to ten per cent annually. Enterprises should investigate.