By Alan Swahn

Subcapacity licensing is just what it sounds like, software applications can be licensed for a portion of a server or group of servers and goes hand-in-hand with a variety of virtualization technologies and multi-core chips on the market. On the one hand, there is a lot of flexibility to fully utilize the underlying hardware and quickly provision or move partitions that contain the accompanying software applications between several networked servers. On the other hand, understanding the impact (software license liability) of virtual machine or hardware partition movement within the environment is somewhere between challenging and daunting. Challenging costs more than it should; daunting costs way too much.

As a simple example, let’s suppose you have a group of virtual servers that consists of:

and a partition that is allocated 2 cores and contains 3 applications with an aggregate price of x dollars per Processor Value Unit (PVU). Since they are in the same partition on the same server, the application cost is:

2 cores * # PVUs per core * x

If the workload is moved from the POWER5 QCM to the POWER6 570 the cost jumps 240%.

Let’s put in some real applications and associated costs:

Therefore, the price swing for running these applications is from $51,010 to $122,424. It’s easy to move workloads between virtual servers using technologies such as IBM’s Live Partition Mobility, just make sure the financial liability is understood or you could get an unbudgeted surprise! What’s really needed is a software license management solution that provides “what-if” analysis to tell you the financial impact of moving or provisioning workloads before changes are made. Unfortunately, IBM’s ILMT³ tool only reports on PVU based inventory, after the fact.

References:

1. http://www-01.ibm.com/software/lotus/passportadvantage/pvu_licensing_for_customers.html
2. http://estore.gemini-systems.com ; Applications bought in lots of 10 PVUs.
3. http://www-01.ibm.com/software/tivoli/products/license-metric-tool/

By: Jill Powell, Flexera Software
I often work with clients who ask me how to handle their ‘MSDN’ licenses. It surprises me how few companies really take account of, or leverage the use rights that these expensive subscriptions afford. MSDN (Microsoft Developer Network) is a Named User subscription license that allows the installation and use of a broad range of software on multiple machines in a development environment belonging to a single Named User.
The number of products the Named User is entitled to install varies according to the MSDN subscription purchased, but the range of products that developer may use generally ventures to literally hundreds of titles and versions. During the course of the subscription, the MSDN user can also benefit from the release of software updates or new versions, and may install these new products in the development environment – making MSDN a very valuable entitlement all round.
One fact often overlooked – and one further contributing to its value, is that some subscriptions (for example MSDN Universal, Premium) also allow one copy of certain ‘Office’ products (such as Office Ultimate, Visio, Project …) to also be used on the MSDN subscribers ‘production’ PC. The value of these may amount to a couple of thousand dollars per MSDN user. For an organisation with 200 developers, this could amount to some significant savings in not having to buy normal Volume Licenses for this group of production PCs.
So, why then do companies tend to overlook this right, or take little time to manage it effectively?
The answer is that in complex IT environments, mapping license entitlements can be an extremely involved process. As a result, many companies simply ring-fence and exclude their MSDN computers from being counted at all and concentrate only on counting the liability of production computers. There are, however, two problems with this; firstly, excluding a whole tranche of PCs from your IT estate may help to eliminate a headache, but it’s not really a software asset management best practice to just decide not to count or manage a this set of PCs. Secondly, by simply excluding developer PCs, it does not account for the entitlement to install a copy of the aforementioned Office products on production PCs – a right that we’ve already established can account for a high cost saving in relation to software license purchases.
The most disconcerting situation of all, and one I came across very recently, was a company that didn’t do anything to manage its MSDN users. This meant that although they had around 800 MSDN subscriptions, they were not excluding all of the MSDN machines from their ‘qualified PCs’ when it came to identifying licensing requirements for their Enterprise Agreement. Not only were they not saving money by leveraging all of the MSDN entitlements for development machines, they were also over-buying licenses for production machines…a costly mistake.
Another common mistake is to say ‘we have 300 developers with MSDN subscriptions so I’ll exclude 300 PC’s based on what my inventory says and buy licenses for the rest’. This, however, doesn’t account for the fact that a developer may have two, or even five development machines rather than just one – probably still resulting in overbuying.
Today, most organisations have a reasonably good inventory tool in place. The problem is this type of tool will assist with understanding software ‘installations’ only. A license management tool will perhaps help to map some entitlements and basic usage metrics. However, mapping complex software licensing mechanisms and leveraging Product Use Rights (like the MSDN rights) in order to determine license ‘consumption’ rather than raw software ‘installs’ is an incredibly difficult task – one that becomes almost impossible without an Enterprise License Optimisation solution.
Very few products on the market are able to help with the more advanced licensing mechanisms. The ideal solution should have a built-in Product Use Rights Library for the most popular applications such as Microsoft and Adobe – effectively automating all available use rights – including those for MSDN. The ability to map and manage MSDN subscriptions, as well as more general upgrade and downgrade rights, portable and multiple use rights are critical needs. With the right solution, you can find ways of identifying tangible software optimisation opportunities, and achieve immediate time and cost savings.

By: Randy Littleson

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

By: Randy Littleson
Amy Konary of IDC talks about “information as power” when it comes to software licensing use. Understanding how software is used is a critical insight to both enterprises and software vendors alike. Amy discusses what companies can do with this information to better their software license management

By Andy Ellwood: iQuate

iQuate has discovered discrepancies between accepted and actual Oracle deployment and usage information in every customer we have worked with, and our customers have used this accurate data to achieve greater levels of control in several key areas.

For example, a high profile UK government agency delivering public facing services outsourced its  IT operations to a large Systems Integrator. In order to ensure they were compliant, the SI employed a team of Oracle experts to perform a manual Oracle inventory count.

iQuate were engaged to verify the result of this audit using iQSonar. The tool was initially deployed in a test environment to satisfy the client that running the tool would have no detrimental impact on the performance or availability of key business critical applications.

Once deployed across the entire network, iQSonar discovered that the manual audit was incorrect. This discrepancy was caused by the SI having prepared a list of Options installed, rather than Options in use. Had this been reported to Oracle, the licence position would have been overstated to a list price value of £1.1m

In a separate example iQuate was engaged with a major international insurance services organisation. During the scanning process our team was told Oracle would not be discovered on Windows-based or Virtual servers because installation  of Oracle on Windows or Virtual environments were against company policy and the customer had strict processes and procedures in place that governed the installation of software.

Within the first day, iQSonar had discovered Oracle on Windows server and Virtualized Windows and Linux servers, despite management being assured only days previously that this was not the case.

iQSonar uncovered seven digit  licence savings for the customer, and also prompted a review of operational procedures that led to improved operational management and control.

iQSonar is the only third party tool verified by Oracle as providing accurate and definitive Oracle deployment and usage data.

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.