The IBM License Metric Tool (ILMT) is required for IBM Passport Advantage customers that are using sub-capacity processor value unit (PVU) licensing and is recommended for full capacity licensing. Customers are required to generate ILMT reports and keep them for a period of 2 years. These reports must be provided if there is a software license audit. The advantage of virtualization, or sub-capacity, licensing is that customers only have to purchase licenses for the processor-core capacity allocated to the virtual machine(s) or hardware partition(s) that are running that IBM application, rather than license the full capacity of the physical server or group of servers. This can save you some real money on your IBM licenses.

So, you have to use ILMT… what else do you need? Basically, ILMT is a simple, limited-scope inventory tool that reports only on PVU capacity per product for full and sub-capacity licensing terms. It is not a license management solution since it— (a) does nothing to optimize license consumption based on entitlements, or reduce software spend, (b) does nothing to inventory or manage the multitude of non-PVU IBM license models, not to mention inventory and license management for all the other software vendors’ products, and (c) does nothing to manage or report on your contracts, users, or payment schedules. A complete, optimized software license management solution does all of these things across a wide range of software publishers, license models and license agreements, for hundreds of thousands of applications.

In addition, ILMT reports are not very configurable and are cumbersome to use to manage exceptions—for example, bundled licenses such as limited-use DB2 and WebSphere that are included with so many other IBM software products, apps with a choice of models such as Lotus CEO User versus PVU+CAL, etc. And being able to easily track persistent exceptions is important since the tool may misidentify hardware, improperly count the same virtual machine (VM) multiple times on different physical hosts, and incorrectly assign PVU values to products. It often requires skilled manual intervention to properly exclude exceptions. Your license management solution should be able to manage these exceptions in a much more automated way.

Optimized license management solutions don’t stand alone however. Ideally, they leverage existing tools and infrastructure to collect the data required to manage your software estate. This means having the ability to import inventory data from sources such as the ILMT and other inventory tools (Microsoft SCCM, and others). It also means having the ability to connect to procurement systems for purchase order (PO) data, HR systems for user and organizational data, and a number of other systems for contract and additional information. ILMT and other inventory tools are necessary but not sufficient to enable your organization to implement an optimized license management program that can help reduce software license and maintenance costs and maintain continuous license compliance.

[Editor’s Note: In April, 2011, IBM announced a change from PVU based licensing to the new Resource Value Unit (RVU) model for certain products (see this ELO blog).]

Steve Schmidt, vice president of product management at Flexera Software, discusses the challenges enterprises face in getting the most out of their investments in software.  He details the importance of data and value of understanding software usage to ensure continuous software compliance and optimising software spend.

Click here to view the video

The enterprise has awoken to realise that applications are one of the least well managed of all strategic corporate assets. Corporate procurement is bringing the lessons learned from strategic solutions such as Supply Chain and Spend Management to the world of software. Procurement is no longer just the final tactical step before a contract gets signed. Increasingly, procurement is actively driving more and more of the business dimension of the software asset lifecycle. Procurement focus is moving beyond a narrow focus on software price discounts to a broader strategy of optimising enterprise-wide usage.

The bedrock of effective strategic procurement is information. IT and Procurement executives at the leading enterprises are seeking a standard solution to acquire and deliver comprehensive, rich information needed to optimise software assets. Such solutions can save hundreds of thousands or millions of dollars in unneeded application usage costs, often freeing up those funds for other needed software solutions.

Many large organisations have existing IT Asset Management (ITAM) software solutions. The first inclination may be that such a solution can help strategically manage application usage and optimise software license spend. But these solutions deploy and inventory software assets, whereas today the business imperative is transforming from counting what you have to controlling, using and optimising the software licenses you have while ensuring that you only buy what you need.

As you look a bit deeper, you see that IT Asset Management solutions differ from Enterprise License Optimisation solutions in material ways:

                                                    IT Asset Management                           Enterprise License Optimisation
Answer the question:        What is deployed?                                           How are software licenses being used?

Business purpose:               SOX, compliance, security                          Use what you have, buy what you need
                                                    (grant/revoke system access rights)

Techniques:                           Sniffing target .exe files technology         Business context is core, technology is
                                                    approach to measurement with                the enabler
                                                    mininal business or commercial
                                                    context

Choosing the right solution is dependent on understanding your true business purpose. Increasingly, we’re finding that the market is demanding capabilities to control the use of and maximise the value of software licenses. Whereas IT Asset Management (ITAM) solutions have proven adept at solving the problems they were designed for, they were not designed for this purpose and organisations should be seeking solutions designed to complement their ITAM solutions to meet these new challenges.

An overview of the changes announced as part of the Valliance initiative follow below:

• As of 1st July 2010 VECD licensing will be retired from Microsoft pricelists. As of July 1 all customers with active Software Assurance on the desktop will be licensed to deliver a virtual Windows OS to those devices regardless of the VM technology being used to deliver that image.

• For devices which are not eligible for desktop SA (thin client and 3rd party devices not owned by the organisation such as contractor PCs) Virtual Desktop Access (VDA) licences can be acquired.

• The VDA licence will have a RRP of $100/device/year and be discounted from there in similar scales to standard Select and Enterprise levels.

• VDA licences will be inclusive of Software Assurance therefore providing customers with the right to run the current version of Windows at all times and providing associated ancilliary benefits including training vouchers and Desktop Deployment Program vouchers.

• Finally the VDA licences will include extended rights to secondary devices including home PCs and internet cafe devices where practical.

• A VMView swap offer is being put in place whereby the 1st year of VDI Suite subscriptions including XenDesktop will be funded by the V Alliance for up to 500 seats for existing VMView customers.

• VDI Suite subscriptions including XenDesktop will be discounted by 50% in an offer for up to 250 seat (tactical) Virtual Desktop deployment projects where customers have active Software Assurance on Core CAL or Enterprise CAL

• In addition XenDesktop4 has been developed to integrate more effectively with App-V (which is still only available within MDOP by customers who have valid desktop Software Assurance)

In order to take maximum advantage of these changes look to engage a service provider that also maintains resale relationships with both vendors.

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

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.

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