Testimonials regarding precise measures of cost savings as a result of SAM projects can be difficult to come by. However, in order to get executive buy in and support for such projects they are invaluable. This video has Scott Fuzer, formerly of VW Credit in North America, detailing exactly the return on investment he secured as a result of his SAM project. The video is very concise, at 5 minutes in length, and it summarises the cost saving opportunity in ways that executives can easily appreciate.

by: Randy Littleson, Flexera

Is it possible to be out of compliance with an all-you-can-eat software license agreement?

The answer to this question is a definitive “yes”, but I don’t think most people realise this. Depending on which vendor you’re working with, such agreements are referred to as Enterprise License Agreements (ELA), Unlimited License Agreements (ULA) or any other number of terms. They essentially work the same way, it’s a form of “all-you-can-eat” license for an enterprise. So, if that’s the goal, how is it possible to be out of compliance if you have such an agreement with SAP, Oracle or your vendor of choice?

In many cases there are variants to these agreements. For example, some have no cap (you specify which products are covered and then you can use them with no limit) and some are capped (you agree on the number of servers you will install, for example). If you have a no cap agreement you can run afoul when the organisation assumes that all products are covered under the agreement and starts to deploy broadly a product not included in the agreement. If you have a capped agreement, it’s quite common for an organisation to over-deploy beyond their agreed upon cap.

I’ve heard/seen statistics predicting that as many as 90% of all customers have software compliance issues (and the bigger you are, the more likely you have software compliance issues). While the number of customers with enterprise or unlimited license agreements is a relative small percentage of the total market, my experience indicates that they too are in this 90% category.

By now you’ve most probably seen coverage warning to mind the hype developed from various quarters of the efficiencies and returns from virtualising your infrastructure. The vendor and early media publicity of a better, faster, cheaper approach has been tempered by a greater understanding of the blindspots and folly of charging down the road to a virtualised infrastructure.

Moving from Hype to Reality
As the virtualisation market place is maturing, a series of alliances are emerging including HP/Microsoft and vBlock from Cisco EMC and VMware with the view of providing ‘turnkey’ solutions that create simplicity and efficiency. In addition we’re seeing a range of automated and orchestrated environment management tools which deliver return from optimising the virtual environment in the datacentre and use load balancing functions to eliminate performance issues.

A recent survey from the National Computing Centre revealed that 90% of organisations view virtualisation as an important technology in improving the operation and cost-effectiveness of the IT environment over the next two years..Cost reduction is seen as the principle objective through heat management, space, tin, power, in the datacentre and flexibility and ease of managing a dispersed user environment is the key of VDI.
The maturing of the datacentre virtualisation marketplace and release of Windows 7 put a desktop refresh or OS migration into the mix of most organisations project roadmaps making the cost of a VDI project more palatable. This shift in economic viability will inevitably mean the realities of managing a more flexible and fluid environment will be experienced by most desktop and datacentre teams if not already.

Yet still a conundrum remains – how to take advantage of rapid and flexible deployment using virtualisation without falling foul of licence compliance? With 30% of firms considering desktop virtualisation there are few topics likely to have as significant effect on licence management in the near future.
What are the issues?

Let’s start with fitting the virtualised infrastructure with licensing models. For most purchasing and IT pros a utility model for software is utopia, however that goal will most likely be achievable by ISVs delivering applications using SaaS. Delivery through virtualisation without a subscription or concurrent licensing model will fall well short of the usage based models which The Cloud has the potential to deliver.

The nature of concurrent models themselves are quite rigid by nature (requiring licence for maximum users or devices) and will still have limitations in aligning costs with real use. Perpetual licensing ultimately requires a long term commitment to user numbers regardless of use or method of delivery so when virtualising software licensed on a per user or per device basis the organisation should expect to see no reductions in software costs.
Auditing issues are abundant with the requirement to identify quantity of software ‘installed’ whilst measuring a variety of metrics such as cores or Power Value Units (PVUs) and keeping that detail up to date. The nature of virtual environments being one that is fluid and enables rapid provisioning creates the challenge of understanding the licence obligations across a constantly changing landscape. In cases where the organisation has a Microsoft Enterprise or Enterprise Subscription Agreement for example the opportunity to true up on an annual basis largely removes a lot of the pain of auditing and keeping track of peaks and troughs – but what of broader software requirements where 200 or more other vendors software may be used?

Managing the Hybrid
Consider also the hybrid environment, one where virtualised devises sit alongside conventional physical instances and deployment methods. In the short term an all or nothing approach is unlikely with ‘tactical’ implementations dominating demand for virtualisation. Whilst this remains the case licence management solutions will be required to draw inventory data from multiple sources in a fashion which also de-duplicates where multiple use rights apply e.g. a local install and virtual installation or access from one device.
To the business, signing off on projects which reduce capital outlays and visible management costs – virtualisation is just cool enough to be reassuring and yet complex enough to be ignored when it comes to asking the hard questions and truly understanding its business impact.

If any or all of this sounds off-putting it need not necessarily be. In the next edition we will look at approaches which support the “quick win” of virtualisation and reduce both impact and side effects as the enterprise evolves. By taking proactive steps and putting the required solutions and processes in place every organisation can get a handle on its requirements and obligations, both mitigating the risks and leveraging the benefits of a virtualised environment.
How is your organisation addressing control, governance and Virtualisation?

Author: Stephen White, Technology Leader Software, Computacenter (UK) Ltd

By Jeff Greenwald

The blogosphere is buzzing over SAP’s announcement to reintroduce its Standard Support model and offer its customers a choice between two tiers of support service.

Amy Konary, Research Director for Software Pricing and Licensing at IDC, and Ray Wang, a Partner for Enterprise Strategy at Altimeter Group and the author of the enterprise software blog A Software Insider’s Point of View, recently posted interesting analyses of these changes.

Both applaud SAP for listening to their customers and recognise that this announcement represents a decisive shift of power in the software industry from vendors to customers.

Ray provides SAP customers a helpful decision matrix and points out that if an organisation anticipates expanding their use of SAP, now is the time to renegotiate their contract and address shelfware issues.

But in my experience, many organisations don’t really understand how their SAP applications are actually being used. Without insight into SAP license usage, how can anyone accurately identify shelfware or compliance risks?

I encourage those that are turning their attention to their SAP investments to take a closer look at how their organisation is actually using their licenses and take that information into account when considering their support options. Only by asking this question on a more ongoing basis can organisations guarantee that they’re only buying the software they really need and using all the applications they already have in 2010 and beyond.

What do you think of SAP’s support announcement? How does this impact your software budget plans in the future? How do you measure your SAP license usage today?

As we enter 2010, one trend in software license management that I believe will continue to grow in the next few years is the rise of usage-based models for software licensing. This is a trend being driven by enterprises and governments, but one that software vendors will need to track carefully in order to meet the expectations of their customers.

For years end-customers have licensed software based on projected needs, but have had no ability to actually reconcile those licenses (or oftware entitlements) with actual usage. The growing adoption of SaaS and subscription licensing models combined with the budgetary pressures brought on by the economic downturn have elevated the importance of usage-based models.

Flexera Software’s recently completed research study “2009 Software Pricing and Licensing Trends” sheds light on these trends:

• 61% of enterprise IT managers believe that tracking software usage is important or very important to reduce costs, minimize shelfware, and ensure software compliance
• Enterprises are increasingly using automated tools for license compliance tracking (62% up from 58% in 2008), but 35% still manually track or do not track compliance
• Currently, only 15% of software vendors surveyed offer a usage-based model, but by 2011, 36% expect to do so, making it one of the top three fastest growing licensing options
• While 58% of software vendors report monitoring customer software usage— 18% growth over 2008—the majority of these have only rudimentary tools to track usage with 28% using home grown tools and just 6% using robust third-party tools
• 34% of software vendors have no system in place or tools to determine what product/versions their customers are using

In the following video, I talk more about how as enterprises and governments seek to “buy what they need and use what they have”, the pressures on software vendors to implement usage-based software pricing models will continue to grow.

Do you think the availability of more usage-based software licensing models would benefit your organization? How do you think it will impact software license management in the next year or 18 months?

Randy Littleson is Senior Vice President, Marketing, at Flexera Software

As the New Year arrives and enterprises clarify their software license management goals for 2010, the overarching question is how to align the company’s software investment with the actual value delivered by the software. How can an organization be sure that it will only buy the software that will actually be used? And how can an enterprise be sure that perpetual licenses acquired in previous years will be sufficient to cover the ongoing needs of the organization?

One approach that could simplify this problem would be to acquire more subscription-based licenses. This could be an attractive alternative to perpetual licenses. With subscription licenses, planning and purchasing decisions could focus on a one-year horizon instead of a much longer time window. Indeed, industry observers predict that enterprises may begin to demand subscription offerings from their key software vendors.

For example, Jim Geisman of Software Pricing Partners gave the following advice to ISV’s:

“If you use perpetual licenses, the easiest place to take immediate action is there: Stop using these licenses. Offer shorter term-licenses (annual subscriptions) to new prospects instead. (You may also want to bundle support and maintenance with the subscription license fee.)”

Is there evidence that ISV’s are heeding this advice and creating more subscription offerings? The results from Flexera Software’s Pricing and Licensing Trends Survey from the previous three years paints an interesting picture. The following percentage of ISV’s reported that their primary offering to customers were subscription-based:

Even more interesting is the ISV’s prediction that their primary offering in two years will be subscription-based:

Apparently, in 2007 and 2008, software vendors anticipated they would significantly shift to subscription offerings by the end of 2010. However, by 2009, this shift had apparently not started. In fact, the self-reported projection is that the number of ISV’s offering primarily subscription-based licensing will remain even in 2011 at the historic levels of 30-35%.

Perhaps one reason that the expected shift to subscription pricing has not yet materialized is that ISV’s assume that subscription pricing is only suitable for on-demand offerings. I think this is unfortunate, since many options are available for ISV’s to license even on-premise software on a subscription basis. If ISV’s would consider this option, they might find a shorter path to satisfy enterprise customers who are closely optimizing their software investment.

While such enterprises may be looking for subscription offerings as a way to simplify their software license management process, it is quite possible that their wish will have to remain on hold for another few years. In the meantime, as enterprises set their software license management goals for 2010, they will probably need to continue looking for techniques to manage the challenging problems of perpetual software licenses.

Do you think that ISV’s should provide more subscription-based offerings? Do you think such offerings would help you better manage your software license investment? What impact would subscription offerings have on your software license management process?

Art Middlekauff is President of Engineering for Flexera Software’s enterprise license optimisation solution

The Software Industry Research Board (SIRB) has scheduled next year’s UK Software Management and Licensing Conference to take place on 21st April 2010 at the Madejski Stadium in Reading, Berkshire.

Invitations to the conference will be circulated via our e-bulletin service in January but in the meantime we are interested to know what topics you would like to see covered in the conference workshop sessions. To help us understand we’re inviting you to give us the answer to just 7 questions in our on-line survey. Your answers will enable us to design the content of the workshops to meet your needs and ensure that you gain maximum benefit and value from the conference.

Please click this link to access the survey www.surveymonkey.com/s/F5VWGH3. The survey will close on 24th December 2009, so please make sure we have your answers before then.

In 2006 the International Organisation for Standards passed a standard for Software Asset Management processes ISO19770-1 (dash one). The release of that standard was the product of a great deal of effort initially by Investors in Software (IiS – now merged with the Federation Against software Theft) and the various working groups over a period of 12 months.

Whether or not the release of dash one was a success could be measured through several different approaches. If the success was measured by the number of copies of the standard sold it would undoubtedly be positively appraised, if however certification against the standard is considered key then the zero pass status of the standard would invert the appraisal based on sales.

The reality of dash one was heavy prescription of documentation, many organisations have taken a programmatic view of the content and ‘picked the eyes’ out of it and establish which elements could be practically implemented and drive software asset management benefits.

On Friday October 23rd ISO passed 19770-2 ‘dash two’ a standard which applies to vendors rather than end user organisations and sets mechanisms through which software vendors should ‘tag’ their products to enable identification, recognition and therefore management.

Significant in the development of dash two has been the extended period of development and technical focus by the working group (WG-21) and participation by vendors in the course of it’s development – thereby securing mindshare and at least conceptual buy-in from a number of key members of the software vendor community.

The objective of dash two has been to create software ID tags that provide authoritative identifying information for installed software or other licensable item (such as fonts, or copyrighted papers).
Software vendors / manufacturers / publishers will use the stipulations of dash two to enable their software to be accurately identified. Dash two provides much more than just software identification however, by allowing attributes (27) to be added software identification process including:

• Who distributed the software
• Who may have re-packaged the software
• The individual or unit which authorised the installation
• Mechanism through which the software was purchased

Whilst dash one was drafted by IiS, dash two was initially developed by a committee of the International Business Software Managers Association (IBSMA). Since then WG21 and an other working group (OWG). In the final stages of dash two ratification a non profit organisation call TagVault.org was formed to enable certification of tags and the registration authority therefore.

The organization will act as the registration authority for ISO/IEC 19770-2 software identification tags (SWID Tags) and will provide tools and services allowing all SAM eco-system members to take advantage of SWID tags faster, with a lower cost and with more industry compatibility than would otherwise be possible.

So, we have a new standard – what will the benefits be?

A standardised software tag will enable automated identification of inventoried applications. Minimising administration required by end user organisations and making the task of discovery and licence management tools less onerous.
In reality benefits will be largely long term, however flow through will commence immediately in small percentages as vendors commence applying the stipulations of the standard. A handful of tagged software products will be present in many environments in the coming months, a very small percentage considering the thousands of applications present in many environments.

The number of tagged applications in any given environment should grow towards saturation over a five year period with significant increase as many organisations renew applications in association with implementation of Windows 7.

In the immediate term CA, Symantec, Adobe and Microsoft are moving forward with Adobe having treated dash two as a de-facto standard in advance of it’s ratification, commencing with Acrobat 9 and CS4.

Adobe’s tags enable organisations to identify an installation of Acrobat 9 Pro for instance as:

• A stand alone product
• A trial version
• Part of a Create Suite package – which would be named as either Design Premium, Design Standard, Web Premium or Master Collection

In addition:

• Software applications will be tagged as non-prod where distributed as a test or development version.
• A SWID only file can be created for access based products (CALs for instance) and distributed to all devices which access the relevant server application

Does the ratification of dash two mean that software licence management tool vendors who’ve invested heavily in their own recognition capabilities have wasted that investment? Not at all, the investment made largely by the focused vendors will keep them in front in terms of functional delivery to customers now and a reduced cost of their sale in the future.

Whilst the level of excitement associated with dash two ratification will be muted, simplified recognition will flow through to customers and service delivery organisations in the medium term. Resource requirements will inevitably be reduced to an extent, however robust process will remain the key to successfully managing software costs and compliance.

What remains to be seen is how effectively the dash two standard will enable organisations to deal reporting of cores, value units and the chosen methodology of licensing complex datacenter software titles.

Stephen White
Technology Leader Software
Computacenter (UK) Ltd
Services & Solutions
www.computacenter.com/software

When the ISO/IEC 19770-1 international standard for Software Asset Management (SAM) was launched in summer 2006, many in the SAM expert community were no doubt expecting great things, perhaps envisioning a time in the not too far distant future where organizations would treat SAM professionalism with the same respect that many apply to standards such as ISO 9000.

However, three years on and (to the best of this SAM market observer’s knowledge) not a single organization anywhere worldwide has been fully accredited as conforming with the ISO 19770-1 standard.  A few may be close, but none are quite there yet.

Why is that? Why haven’t we yet seen widespread adoption of the international SAM standard?

We know it’s not due to a lack of interest in SAM. Although SAM adoption still lags behind where we (in the SAM community) would like it to be, the fact is that adoption of SAM technologies and best practices is definitely on the rise.

It’s not difficult to find reasons why.  Industry analysts Gartner recently reported that the likelihood of an organization receiving at least one vendor software audit has risen to 56 percent in 2009 (compared with 30-35 percent in 2008). Add to this the fact that research conducted by FrontRange showed that most organizations are currently over-spending on their software assets and its easy to see why more and more organizations are beginning to take software management seriously.

But despite this growing adoption of SAM, we’re not seeing organizations flock to the ISO 19770-1 standard.

The answer then must lie in the standard itself (although, interestingly, according to the ISO, it actually ’sells well’ from their website). Despite it being a very comprehensive and worthy standard, one criticism that is cited over and over again is the complexity of the requirements and the (perceived) daunting nature of the task of achieving full conformance.

Many organizations come to the conclusion that they can achieve their goals without adhering to the minutiae of the standard. But while that might be ‘good enough’ for today, will it be good enough in the future?

However, there may be hope on the horizon.

The proposed ISO 19770-4 standard for ‘Staged adoption of SAM processes’ has the aim of making ISO 19770 adoption faster and easier by breaking down the key requirements of the standard into separate ‘modules’.

It is hoped that this will a) remove some of the fear around the standard and b) prompt organizations to see SAM adoption as a gradual exercise rather than an ‘all-or-nothing’ approach.

‘Dash four’, as it is know within the inner circle, could comprise a staged approach of four tiers, each moving the organization’s approach to SAM forward both in terms of complexity and maturity. Under this kind a program, the four tiers might look something like:

• Tier One – Trustworthy Data – creating an accurate inventory of everything to be managed
• Tier Two – Practical Management – implementing basic management controls
• Tier Three – Operational Integration – making SAM a part of daily IT Operations (such as ITSM)
• Tier Four – Full ISO Conformance – where SAM becomes a strategic enabler to the business

Unfortunately, doing a search for “ISO 19770-4″ on the internet won’t yield many useful results yet.  But according to a reliable source the plans are well afoot to bring ‘dash four’ to market as quickly as possible.

For this particular commentator, ISO 19770-4 appears on first hearing to perhaps be what ISO 19770-1 should have been from the start. It will be interesting to see what final form it takes and whether it can increase the appeal of a SAM standard in the wider world.

Matt Fisher is a Director of Marketing with SAM vendor, FrontRange Solutions.  Learn more at www.frontrange.com.

Gartner reports strong rise in software audits

September 11th, 2009 by Matt Fisher

According to a recent report from Gartner (”Gartner Polls & Surveys Show an Increase in Software License Audits”, 31 July 2009), more than 50 percent of organizations it talked to say they have been audited by at least one software vendor in the last 12 months. In research undertaken between February and June 2009, 56 percent of respondents said they had been audited, compared with 30-35 percent for the same study in 2008.

When filtering the results to show only EMEA-based organizations, the result is even higher, with 63 percent of respondents reporting at least one audit request.

According to a variety of sources from both the software vendor and Software Asset Management (SAM) communities, the overall rise in audits is largely not due to an increased level of activity from vendors that already had active compliance programs in place, but instead due to a number of other vendors introducing compliance programs for the first time.

While Adobe, Microsoft, Oracle and IBM were cited as the most ‘prolific’ auditors, survey respondents also reported audit requests from no fewer than 18 other software vendors, including BMC, CA, HP, SAP and Symantec.

As the report states, “On-site audits aren’t pleasant”, and Gartner strongly advises that end user organizations adopt Software Asset Management and License Management practices and technologies well in advance of any audit, so that the company is better prepared to react in a timely fashion and without causing major disruption to normal business activities.