Software Licensing In The Cloud (CloudWorld 2009)

Software Licensing in the Cloud
Stuart Charlton
Chief Software Architect, Elastra
Automating application Infrastructure

Objectives
Put simply, given Cloud Computing,is there still room for a software product industry?
Where are the problems with today’s licensing regime?
What opportunities arise with cloud computing to improve the licensing situation?
How could we resolve technical barriers to software licensing in the cloud?
2

Waves of IT Evolution
Agile
Timeline
Virtual
ServiceOriented
Cloud
J2EE
Costly
Client
Server
Cloud Computing

Virtualized Software Layer
Automated Provisioning
Elastic Infrastructure
Virtual Data Centers
Pay Per Usage
Governance Models

J2EE

Silos of Function
Redundancy
Sprawl

Service Oriented

Reuse Processes
Composable Units
Decouple Components

Virtualization

Pool Infrastructure
Optimize Resources
Decouple the Physical

3

New Powers of Governance
Software Units
Compute Units
WebLogic
Oracle DB
Groups & Chargebacks
Groups & License Use
Apps & Quotas
Utilizations &SLAs
Dashboards
Encourage Efficient Use
Accounting
Specify Policy
Which Apps Used Which Resources?
Metering and Chargeback
Graphic View of Data Center Design & Use
Trends of Consumption
DetermineQuotas for Appsor Groups
Allocate Resources by Price & Capabilities
Prioritize Resource Costs to Business Priorities
Restrict Excessive Consumption
4

The Cloud Provider Continuum
“Supplier Ecosystem”
“Retail Ecosystem”
Closer to theDeveloper/User
Closer to theSysAdmin/Ops
Platform-as-a-Service
Infrastructure-as-a-Service
5

“On Demand” Strains Traditional Licensing
Growing numbers of infrastructure & services
Give people “on demand” freedom, they’ll use it!
A wide variety of licensing models
Customized licenses are common with enterprises
Rigid license enforcement policies
E.g. tied to a single IP address / machine
Services of all shapes and sizes
From low-level infrastructure to full software systems
Consolidation of enterprise software vendors
“Wait and see” approach with cloud computing
6

Package & Payment Models
Spectrum:
As a Service
Low footprint
Revocable
As a Product
Higher footprint
Perpetual
7

Pricing Models
Traditional models still dominate
E.g. Oracle’s pricing on Amazon EC2
A trending shift to perceived-value pricing
8

Information Asymmetry
Enterprise software is largely a “market for lemons”
Seller knows more than thebuyer
Increased popularity of:
Proof-of-Concepts
Detailed RFPs
Open Source
On demand access
9

Enterprise Licensing & Maintenance
21% Annual Maintenance Fees
The “Wrap and Roll”
Vendor wants to make its quarterly performance
Company wants to reduce itsspend
“Let’s discount maintenance for 2 years”
… and do it over again
10

The Enterprise Acquisition Process
RFP-led or Strategic Sourcing
Lots of Front Loaded Risk-Mitigation
Purchase for peak demand up-front
Large capital outlays
11

Popular and Growing Alternatives
“Adoption-Led Acquisition”
Try and buy
Pay after a period
Open source
Pay for support and/or complements like indemnity
“Agile Acquisition”
Co-develop the requirements and architecture
Growing with large-scale acquisition (e.g. government)
12

Acquiring Software in the Cloud
Supports a wider variety of adoption-led scenarios
E.g. On-demand doesn’t need to be open source
Reduced capital and lead times for agile acquisition
13

Tech Challenges to a On-Demand Licensing
License description
There are a wide variety of forms & sizes
Customization is common and expected with enterprises
License enforcement & auditing
How one be sure license are enforced?
…or at least audited?
Especially with fewer human barriers to access
14

A Sketch of a Solution
Hyperlinked Cloud Modeling
Describing Software, Architecture, and Infrastructure
… Along with Entitlements!
Cloud Entitlement Modeling
Participating Roles
Digital Identity and Authorization
A Cloud Entitlement Reference Architecture
An Entitlements Language
15

Hyperlinked Cloud Markup Languages
Modular, layered, open-world, “connective tissue” for automated applications
CONCEPT
IMPLEMENTATION
MARKUP
DEFINE
ECML
EDML
EMML
EXTEND
ELML
16

Cloud Modeling Bridges Collaboration Gaps
Enterprise architects
IT OPERATIONS
Change & Configuration Management
Standard Designs
Application architects
IT management
Policy-Based Architectural Designs
Auditing, Metering, and Planning
End-to-End
CollaborativeIT Service Model
Automated Planning, Provision & Configuration
Dev/qa teams
Deploy & Configure Systems
Code, Resources, & Builds
SYSTEM ADMINS
Test System
Staging System
Production System
Enterprise Cloud
Private & Public Cloud Resources
17

Cloud Entitlements – Participating Roles
18

Digital Identity and AuthorizationEssential Building Blocks for Interoperable Entitlements
(Kerberos) (PKI)
19

Digital Identity and AuthorizationPossible Approaches or Standards
SAML v2.0
Web Services and Web Browsers
WS-Federation and WS-Trust
Primarily for Microsoft Windows and Azure
OAuth
RESTful delegated authentication, growing at IETF
FOAF+SSL
Emerging Semantic Web approach to identity
Mutual SSL Authentication
Basic scenario, long history,relies on PKI trust
20

A Cloud Entitlements Reference Architecture
21

Entitlements Modeling
A uniform Rights & Duties foundation is possible
E.g. Open Digital Rights Language
Beware Patents
(includes standardslike XACML!)
Cloud could use targeted, minimal, extensions for payment & accounting
ODRL v2 Core Model
22

A Minimal Licensing Entitlements Language
Example Rights:
Provision
Scale
Quota
Example Duties:
Usage Audit
Subscription fee
23

Summary
Traditional Software Licensing is Under Strain
On Demand Models change prevailing assumptions of what is static
A full shift to “As a Service” models is not likely
But the enterprise software industry must adapt
Change business practices
and/or
Adopt enhanced technology to resolve license complexity
24

Thank You
Stuart Charlton
stuartc@elastra.com
Automating Application Infrastructure