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Evolving and Revolution IT trends and their impact on software licensing Jon Collins Freeform Dynamics Ltd +44 7799 671371 [email_address] www.freeformdynamics.com

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A.K.A. “I’m going to Bermuda!”

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Topics <ul><li>What’s going on in the marketplace </li></ul><ul><li>The business standpoint </li></ul><ul><li>Virtualisation related considerations </li></ul><ul><li>Licensing and the three S’s </li></ul><ul><li>Resolving the paradox </li></ul>

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What’s going on? <ul><li>Virtualisation </li></ul><ul><li>Web 2.0 </li></ul><ul><li>Software as a Service </li></ul><ul><li>Software + Services </li></ul><ul><li>Social Networking </li></ul>

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Evolution, not revolution <ul><li>Do you have or are you planning to begin initiatives over the next 6 months in any of the following areas? </li></ul>

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Reality Check – but virtualisation coming to the desktop <ul><li>How much has your organisation adopted Virtualization in the following areas? (UK) </li></ul>

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Does the hybrid architectural approach feel more or less comfortable and appropriate for your organisation than the traditional ‘hosted everything’ philosophy behind traditional SaaS? Percentages relate to the 61 respondents telling us that they have some understanding of the hybrid approach

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Do you regularly use any of the following for personal or work/education purposes? (Social publishing/sharing) The consumer aspect is often as important corporate behaviour

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What are organisations looking for? <ul><li>Keep control of costs </li></ul><ul><li>Improve flexibility </li></ul><ul><li>Responsiveness to service demands </li></ul>Pragmatic choices New models can help – but will licensing get in the way?

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Bottom-up vs Top-down Making everything “just work” Making a real difference to business IT as bottleneck IT as foundation IT as differentiator INCREASED EFFICIENCY INCREASED EFFECTIVENESS

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Traditional licensing options Maintenance included? Support included? Use by third-parties? Per server Per cpu Per core Per named user Per concurrent user By number of employees Enterprise license Open source

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More choice, or confusion? Maintenance included? Support included? Use by third-parties? Per server Per cpu Per core Per named user Per concurrent user By number of employees Enterprise license Open source Per instance Per virtual cpu By allocated resource

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Are you happy with existing licensing models as applied to virtual systems? Source Freeform Dynamics and The Register, Oct 2007 Percentages relate to respondents offering an opinion Operating systems

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Are you happy with existing licensing models as applied to virtual systems? Source Freeform Dynamics and The Register, Oct 2007 Percentages relate to respondents offering an opinion Application software (ERP, CRM, etc)

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Dynamic Virtualisation CHANGING DEMAND

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Organisations should review current terms before creating a future problem * Licensing models and tools currently rare or not available Licensed by Replicated single platform stack Applications and mixed platform stacks Dynamic execution environment Physical server OK Check Beware Physical CPU or core OK OK Check Fractional CPU or core OK OK Check Installed instance Beware Check Beware Concurrent instance* Beware Check Check Named user Check Check Check Concurrent user Check Check Check Average utilisation* OK OK OK Metering approach* OK OK OK

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“ What licensing model would work best for virtualisation?” “ Easier licensing methods should be a selling point for companies. Who cares if a single CPU license includes the ability to run on up to 4 cores? Just license by CPU core (just make it 1/4 the cost of the single CPU license, if that's what you were charging anyway), or by concurrent user connections, or some combo of the above. All this 'buy one license, and you can actually install 4 copies in a virtual environment' just makes things hard to understand..” “ VM and application vendors need to work with their customers to determine how to establish pricing models. Obviously, 'the market' will eventually sort this, but getting an understanding of how a customer benefits from VM technology and applications that work with it will hasten the market normalization and allow customers to coherently acquire products.” “ Entire virtual machines should be treated just like word processing documents or MP3 files. I should be able to upload my virtual machine to say, my Google email, then go on vacation and from some internet cafe in the world access my virtual machine. Current licensing models do not make this possible.” “ any model that doesn't disadvantage me in my choice of whether to run in a virtual or physical environment.” “ If I can run one instance of a software package on a server with 500 users, why should I have to spend 5 times as much to run 5 instances of the software package (each in its own VM), where each instance carries 100 users?

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Licensing the three S’s <ul><li>Services </li></ul><ul><li>Software </li></ul><ul><li>Social </li></ul>S + S + S ?

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How attractive are the following main attributes of the SaaS approach?

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So, thinking of small scale workgroup or individual user requirements to begin with, would you consider SaaS applicable to the following types of application?

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Coming back to the types of application we were discussing earlier, do you see the hybrid architectural approach as suitable for the following and coming up a level to more broadly deployed enterprise solutions? Percentages relate to the 61 respondents telling us that they have some understanding of the hybrid approach

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How to license that ? Services in the “cloud” Appliance Standalone Server Perimeter Blade Server

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Open Source – threat or complement? <ul><li>Traditional: LAMP stack </li></ul><ul><ul><li>Stack is now “complete” </li></ul></ul><ul><ul><li>Most layers acquired by large vendors </li></ul></ul><ul><li>New: innovation by integration </li></ul><ul><ul><li>Mashups </li></ul></ul><ul><ul><li>Advertising support </li></ul></ul><ul><li>Future: ? </li></ul><ul><ul><li>Corporates don’t like advertising </li></ul></ul><ul><ul><li>Facebook is dead. Long live... </li></ul></ul>With thanks to Michael Cote www.peopleoverprocess.com

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Anything is possible!

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Downsides include fragmentation, manageability, security – corporates will pay for control YOUR DATA IS HERE

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Resolving the paradox <ul><li>New charging, delivery models need to fit both consumer and corporate behaviour </li></ul><ul><li>Vendors offer both carrot and stick as they look to maximise opportunity, minimise threat </li></ul>

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Final thoughts <ul><li>Licensing models yet to mature </li></ul><ul><ul><li>Confusion and inconsistency in meantime </li></ul></ul><ul><li>Much will have to do with IT governance processes – with choice comes responsibility </li></ul><ul><ul><li>Anticipate larger scale and more dynamic use </li></ul></ul><ul><ul><li>Think through the scenarios </li></ul></ul><ul><li>“ Single throat to choke” – strategic supplier relationships will help </li></ul><ul><li>Look beyond short term instability </li></ul>

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Thank You Jon Collins, Service Director Freeform Dynamics Ltd [email_address] (c) 2008 www.freeformdynamics.com