W H I T E PA P E R                     Waste Not, Want Not:                     Software License Tracking and             ...
Waste Not, Want Not: Software LicenseTracking and Successful Vendor RelationsIT departments are constantly being forced to...
Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsthey guess too low, end users are unable to...
Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsSharing licenses between departments.      ...
Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsFlexera Software develops software usage ma...
Flexera Software LLC                      Schaumburg                                United Kingdom (Europe,               ...
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Waste Not, Want Not: Software License Tracking and Successful Vendor Relations


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Waste Not, Want Not: Software License Tracking and Successful Vendor Relations

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Waste Not, Want Not: Software License Tracking and Successful Vendor Relations

  1. 1. W H I T E PA P E R Waste Not, Want Not: Software License Tracking and Successful Vendor Relations
  2. 2. Waste Not, Want Not: Software LicenseTracking and Successful Vendor RelationsIT departments are constantly being forced to do more with Insufficient licenses.less. Companies today are putting significant pressure on To contain software costs, IT may purchase too few licensesIT to be more efficient, more productive, and deliver more and run the risk of end users being denied access tobusiness value while simultaneously cutting costs. Nowhere applications at critical times.is this paradox more evident than with software licensepurchasing and management, where IT is forced to find ways Poor license allocation.to reduce software expenses while ensuring end users can Sometimes one department over-licenses a softwarealways access the applications they need to be productive. application, while another department under-licenses it in the same organization. So, the company ends up overspendingDespite the prevalence of this problem, most IT departments while still denying some end users access to the application.still fail to adequately track and manage software license Without accurate usage data, IT cannot take the necessaryusage. While most IT managers have squeezed every penny steps to remedy the discrepancy.out of their physical assets—such as desktops and servers—many are still struggling to properly manage the complexity Unnecessary update and support fees.of their software licenses as business assets, despite the fact Many organizations automatically purchase new softwarethat they may be responsible for tracking millions of dollars updates and renew annual support contracts, even thoughworth of software products. their needs have changed. Without visibility into how software is actually used, they may waste a significant partA Flexera Software/SIIA study regarding software pricing of their budget renewing licenses and support plans no oneand licensing trends conducted last fall showed that 72% is using.of enterprises are manually tracking software usage or nottracking it at all. Clearly, companies simply do not know Non-compliant usage.when, how, or even if the software they buy is being used. Organizations that don’t properly track license usage leaveThis lack of visibility into internal license usage often leads to themselves vulnerable to software audits and the multi-million-expensive problems, including: dollar fines and damaging publicity that come with them.Excess licenses (“shelfware”). For most enterprises, projecting the number of copies ofTo ensure that users have access to all of the software they Microsoft Office and other standard desktop applicationsneed, IT routinely buys more licenses than their organization is relatively straightforward. The real challenge for IT lies inactually requires. They do so to eliminate denial-of-service predicting how many copies of other types of applicationsproblems, such as end users trying to access an application, are required, including expensive enterprise programs withbut being denied because other users have already checked shared license models—such as EDA and CAD applications.out all available licenses. If IT guesses too high, enterprises overspend their budget; if2 Flexera Software: Flexnet Manager Suite White Paper Series
  3. 3. Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsthey guess too low, end users are unable to access critical Armed with granular, global insight into how licenses aresoftware and risk disastrous business results. This frequently currently used and how many licenses you will need in theleads to procurement groups having to scramble to quickly future, you can make intelligent decisions that can deliverpurchase additional licenses. profound value to your organization, including:The key to intelligent license purchasing and effective Reducing spending on unnecessary software renewals.negotiations with software vendors over these types of Many organizations routinely pay periodic software updateapplications is having a complete understanding of your and support fees without reviewing how many users areorganization’s licensing needs. Once you get a firm grasp of still using the associated products. Eliminating or reducingyour software requirements, you can approach your vendors update and support costs for unnecessary, unused orand discuss ways to get the most value from the software you underutilized software is a painless way to reduce softwarepurchase. costs. Value can also be recovered from shelfware and other software that is no longer needed. Vendors often sellStep 1: Centralize Your License Tracking and software licenses at significant discounts if the licenses areManagement purchased as part of a “competitive upgrade.” There is noDecentralized licensing is a common problem in today’s IT better software to trade in than software your organizationlandscape. When different groups across an organization isn’t using.purchase and manage software locally, it becomes extremelydifficult for IT to get an accurate global view of software Managing peak license demand.license usage. Without that global view and the data The best way to determine how many and what kinds ofit provides, you cannot get the ammunition needed to software licenses to purchase is to define their peak demandnegotiate favorably with software vendors. periods. A good operational definition of peak demand is any time 90% of available software licenses for a givenCentralizing the tracking and management of licenses product are being used. By understanding the usage patternsenables IT to inventory current software assets to see that emerge relative to time of day, week or month, you canthe availability and expiration dates for those licenses. determine average duration of usage and decide whetherUnderutilized licenses can then be redeployed or shared to allow some end users to be denied service, and, if so,among departments, eliminating shelfware and unnecessary for how long. For example, a denial-of-service that lasts onlypurchases, while ensuring that end users have access to a few minutes may be acceptable because it significantlythe software needed to do their jobs. Centralized software reduces licensing costs. A denial-of-service that lasts morelicensing means that headquarters and satellite facilities can than an hour, however, may be unacceptable because ofpool licenses so that enough are available at all times— its adverse impact on users or customers. You now have theparticularly during periods of peak activity—without buying data to do it.more licenses than are actually needed. Optimizing software remixes.Centralization also makes much better use of valuable IT staff Accurate data on actual usage over time can help verifyresources. Instead of managing licenses locally with multiple whether shifts in usage trends are permanent or not. Thislicensing experts, IT departments can now designate one allows you to optimally redistribute the mix of software aadministrator to manage all servers and licenses globally. vendor offers. For example, a product design project mayThis frees senior IT staff to focus on more mission-critical tasks. require one set of software tools to build a conceptual model, another set to build a prototype, and a third set to test theStep 2: Obtain and Analyze Accurate Global License prototype. By analyzing usage data, you can determineUsage Statistics how best to weigh the percentage of each software productGetting accurate usage statistics is essential. Relying on and module within the remix, thus ensuring users have thelicense usage data that is inaccurate by as little as 4% to right number of tools available when they need them—and5% can result in costly mistakes. Consider an organization providing more value from existing software contracts.with 4,000 licenses, each costing $5,000. Overestimatingusage needs by 5% can translate to $1 million inunnecessary software costs. Therefore, once licensingoperations are centralized, the next step is gatheringaccurate license usage data.Flexera Software: FlexNet Manager Suite White Paper Series 3
  4. 4. Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsSharing licenses between departments. Token-based model.Sharing software licenses with other departments enables This model establishes a pre-purchased inventory of single-organizations as a whole to save money by purchasing use licenses, or tokens, similar to prepaid phone cards. Eachfewer licenses. You can establish shared license pools with token is valid for a specified period of time (typically 8 toprioritized resource allocation, allowing departments or users 12 hours). The token is automatically “consumed” when anwith high-priority needs to “reserve” a fixed number of shared end user makes first use of the application. Subsequent uselicenses, thus ensuring software availability. of that application by the same user results in no additional charge (until the token period expires). If the user accessesAligning software costs with departmental usage. the application again after the token has expired, anotherWith accurate data, IT has a firm understanding of which token is consumed. A common variant of this model isdepartments are using certain licenses and can bill costs to apply it to suites of applications, allocating a specificback to specific groups or projects accordingly. “weight” to each application or capability within the suite. When each application is run, the corresponding number ofStep 3: Negotiating with Software Vendors tokens is consumed. In this manner, a common pool of tokensOnce you understand your organization’s licensing needs, can be used across a broad suite of applications.you can use the data to more confidently negotiate licensingterms with your software vendors. Most companies buying Application-specific model.enterprise applications do not understand the many licensing While some models are based on relatively straightforwardmodel possibilities available to them. Here are a few concepts of usage, some enterprises benefit from application-examples of actual pricing models software vendors use specific variants, or “number of reports run,” or “number oftoday: gigabytes of storage managed.” This application-specific concept of usage can be combined with the above modelsHigh watermark model. to suit any business situation.This model gathers usage information for a billing periodand determines the maximum concurrent usage during that Hybrid models.period. It then calculates the price for that usage level Enterprise can often derive the most value from theiraccordingly. High watermark models are attractive to software purchases when these licensing models are used inenterprises already familiar with the concept of concurrent combination with more traditional software pricing models.software licenses, but don’t want to have to pre-buy “spare” Vendors can create hybrid models, in which traditionallicenses to ensure they are covered during periods of peak concurrent or subscription licenses can be purchased, and ausage. These models are also extremely useful in new layer of one of the pricing models can be added on top ofcustomer situations, when it is difficult to accurately predict it. As such, the bulk of the purchase is along traditional lines,the number of licenses required. but provides the added flexibility of having easy access to critical software when the need arises.Unique user model.This model determines the number of unique end users who These are just a few examples of the types of licensinghave used the relevant software during the specified billing models that can be requested from a software vendor. Theperiod. You are charged for the resultant number of users, key is to obtain a complete understanding of your licensingwith appropriate volume discounts. This type of model is needs for each application, and then share those needs withappropriate for suites of software development tools or other the vendor.applications where the real value lies in the productivityboost the overall suite provides, rather than the amount of Tools to Help You Do Ittime each end user spends running individual applications. So how do you get the data you need? In today’s corporateAn attractive variant of this model enables enterprises to environments, centralizing licensing operations and obtainingcommit to a minimum number of users during the contract accurate, granular usage data is nearly impossible withoutperiod, and then uses the tallied count of unique users to effective software tools. Using the right tools is essential toensure you have not exceeded that commitment. If you have properly tracking and reporting on license usage, and alsoexceeded the presubscribed level, you are simply invoiced significantly reduces the management burden on IT.for the difference between the new, higher level and theiroriginal commitment.4 Flexera Software: FlexNet Manager Suite White Paper Series
  5. 5. Waste Not, Want Not: Software License Tracking and Successful Vendor Relat ionsFlexera Software develops software usage managementsolutions that provide a single console view of their softwarelicenses and license servers across the entire enterprise. Fromthis management console, you can see which licenses are inuse, who is using them, and how many are still available.These management solutions monitor the activity of everylicense server, catalog comprehensive data on applicationusage, and generate detailed, custom reports to be used toidentify unused licenses, verify whether shifts in usage trendsare permanent, and negotiate more favorable licensing termswith your vendors.You Can’t Afford to Ignore License UsageThe day is long past when IT can leave the vagaries ofsoftware licensing to chance. The stakes are too high, theissues too complex, and the downside too severe. Withcompanies of all sizes struggling to squeeze every penny ofvalue out of their assets, properly tracking and managinglicense usage can be an easy way to optimize softwarecosts, achieve more favorable vendor relations, and improveservice to end users.About Flexera SoftwareFlexera Software is the leading provider of strategic solutionsfor Application Usage Management; solutions deliveringcontinuous compliance, optimized usage and maximizedvalue to application producers and their customers. FlexeraSoftware is trusted by more than 80,000 customers thatdepend on our comprehensive solutions- from installationand licensing, entitlement and compliance management toapplication readiness and enterprise license optimization- to strategically manage application usage and achievebreakthrough results realized only through the systems-levelapproach we provide. For more information, please go to:www.flexerasoftware.com Next Step: You can learn more about Flexera Software’s solutions at: www.flexerasoftware.com/products/flexnet-manager-suite-enterprises.htmFlexera Software: FlexNet Manager Suite White Paper Series 5
  6. 6. Flexera Software LLC Schaumburg United Kingdom (Europe, Japan (Asia, For more office locations visit:1000 East Woodfield Road, (Global Headquarters): Middle East Headquarters): Pacific Headquarters): www.flexerasoftware.comSuite 400 +1 800-809-5659 +44 870-871-1111 +81 3-4360-8291Schaumburg, IL 60173 USA +44 870-873-6300Copyright © 2011 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners. FNM_WP_WasteNot_Oct11