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Software Licensing in the Cloud By @FlexeraSoftware | @CloudExpo [#Cloud]

Cloud technologies need to be carefully considered by organizations considering new delivery models such as SaaS and IaaS

The cloud has made many things simpler by allowing us to achieve economies of scale, eliminating the software installation process and enabling access of information from virtually anywhere. The list of benefits goes on, but contrary to popular belief, moving to the cloud will not make software licensing - and the challenges that go along with it - disappear. Instead, the cloud introduces a new set of software delivery models and licensing models that can make license management a challenge for the unprepared.

Cloud technologies need to be carefully considered by organizations considering new delivery models such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS). Closer examination of the licensing rules tied to the type of cloud considered (public, private or hybrid) is also essential - each has its own set of license management ramifications.

In the popular SaaS model, the application is commonly delivered to end users via the Internet using a web browser. SaaS delivery may help alleviate some license compliance issues, but will not prevent over-spending in software. Typically, SaaS applications such as Salesforce.com, Workday, or Dropbox employ subscription-based models. Many organizations end up overspending on SaaS applications because they buy licenses for users that rarely, if ever, use the application. In addition, many companies will buy more expensive subscriptions with features that users do not actually need.

Organizations need to have tools in place that will help them track usage by individual users to help control overspending. One advantage to this approach is that license compliance becomes less of an issue, since each user must be authorized before logging in to use it. However, even with the SaaS model, the organization could still be non-compliant if multiple users share a single user account.

In the IaaS model, the (public) cloud service provider offers the basic server and networking infrastructure to the customer. It is typically a virtualized server environment that may provide computing elasticity, allowing more server capacity when needed to handle peak loads, and less capacity when the load is smaller. While this is one of the main attractions to IaaS, from a software licensing standpoint, organizations are typically responsible for software licenses they move to the cloud provider's infrastructure, even though the provider may own the servers, operating system and virtualization platform.

In comparison to running the software on-premises in the customer's own datacenter, IaaS complicates license management due to the dynamic nature of the cloud environment, the lack of clarity from many vendors regarding product use-rights and the impact cloud usage has on licensing terms. When considering IaaS, it's critical to have license management tools that can be deployed in the public cloud so that cloud customers have the visibility and control they need to manage their entitlements.

Overall, one of the key challenges of moving to the cloud is that any business unit within an organization can subscribe to IaaS services without IT permissions, resulting in loss of IT control and visibility. As a result, organizations may fail to set up rigorous processes that control their license consumption, which can lead to additional expenses as organizations overuse or underuse software.

What can companies do to successfully manage software licenses in the cloud?

  1. Keep the IT department and/or the license manager as the gate keeper for any licenses. This can be done via enterprise app stores that allow users to select the application they want to use and which then have the ability to check for license availability during the approval workflow.
  2. Monitor the usage of all licenses across cloud and on-premises environments, making sure they are always used at their optimum capacity. Processes must be set up to manage the full life cycle of these licenses.
  3. Optimization must be automated and continuous to leverage a deep understanding of entitlements and associated product use rights.

Despite the promise of simplicity, cloud licensing models have their own challenges. Organizations should understand and consider the impact on software license management before jumping into a particular cloud-based delivery model. Both the compliance challenges that exist when moving on-premises licenses to the cloud, coupled with the effort required to optimize the cloud-based entitlements, should not be underestimated. While there can be savings associated with monitoring cloud license consumption and performing software license optimization, organizations cannot rely on cloud providers to perform these tasks.

More Stories By Vincent Brasseur

Vincent Brasseur is the Director of Product Management for Flexera Software's Software License Optimization group. He has over 15 years of experience in software asset management and license optimization. He has worked previously for Ps'Soft and ManageSoft in a career where he held various positions from software development, professional services, and product management. At Flexera Software he is responsible for defining product enhancements and setting strategic direction based on customer requirements and business goals.

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