This document discusses challenges with traditional software licensing models in the cloud environment and proposes solutions using cloud modeling and entitlement languages. Specifically, it notes that on-demand access strains current rigid licensing but a full shift to "as a service" is unlikely. It proposes using hyperlinked cloud modeling languages to describe software, architecture, and infrastructure along with entitlements. A cloud entitlements reference architecture and minimal entitlements language are suggested to help resolve technical barriers to software licensing in cloud computing.

1. Software Licensing in the CloudStuart CharltonChief Software Architect, ElastraAutomating application Infrastructure

2. ObjectivesPut 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

3. Waves of IT EvolutionAgileTimelineVirtualServiceOrientedCloudJ2EECostlyClientServerCloud ComputingVirtualized Software Layer

4. Automated Provisioning

5. Elastic Infrastructure

6. Virtual Data Centers

7. Pay Per Usage

8. Governance ModelsJ2EESilos of Function

9. Redundancy

10. SprawlService OrientedReuse Processes

11. Composable Units

12. Decouple ComponentsVirtualizationPool Infrastructure

13. Optimize Resources

14. Decouple the Physical3

15. New Powers of GovernanceSoftware UnitsCompute UnitsWebLogicOracle DBGroups & ChargebacksGroups & License UseApps & QuotasUtilizations &SLAsDashboardsEncourage Efficient UseAccountingSpecify PolicyWhich Apps Used Which Resources?Metering and ChargebackGraphic View of Data Center Design & UseTrends of ConsumptionDetermineQuotas for Appsor GroupsAllocate Resources by Price & CapabilitiesPrioritize Resource Costs to Business PrioritiesRestrict Excessive Consumption4

16. The Cloud Provider Continuum“Supplier Ecosystem”“Retail Ecosystem”Closer to theDeveloper/UserCloser to theSysAdmin/OpsPlatform-as-a-ServiceInfrastructure-as-a-Service5

17. “On Demand” Strains Traditional LicensingGrowing numbers of infrastructure & servicesGive people “on demand” freedom, they’ll use it!A wide variety of licensing modelsCustomized licenses are common with enterprisesRigid license enforcement policiesE.g. tied to a single IP address / machineServices of all shapes and sizesFrom low-level infrastructure to full software systemsConsolidation of enterprise software vendors“Wait and see” approach with cloud computing6

18. Package & Payment ModelsSpectrum:As a ServiceLow footprintRevocableAs a ProductHigher footprintPerpetual7

19. Pricing ModelsTraditional models still dominateE.g. Oracle’s pricing on Amazon EC2A trending shift to perceived-value pricing8

20. Information AsymmetryEnterprise software is largely a “market for lemons”Seller knows more than thebuyerIncreased popularity of:Proof-of-ConceptsDetailed RFPsOpen SourceOn demand access9

21. Enterprise Licensing & Maintenance21% Annual Maintenance FeesThe “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 again10

22. The Enterprise Acquisition ProcessRFP-led or Strategic SourcingLots of Front Loaded Risk-MitigationPurchase for peak demand up-frontLarge capital outlays11

23. Popular and Growing Alternatives“Adoption-Led Acquisition”Try and buyPay after a periodOpen sourcePay for support and/or complements like indemnity“Agile Acquisition”Co-develop the requirements and architectureGrowing with large-scale acquisition (e.g. government)12

24. Acquiring Software in the CloudSupports a wider variety of adoption-led scenariosE.g. On-demand doesn’t need to be open sourceReduced capital and lead times for agile acquisition13

25. Tech Challenges to a On-Demand Licensing License descriptionThere are a wide variety of forms & sizesCustomization is common and expected with enterprisesLicense enforcement & auditingHow one be sure license are enforced?…or at least audited?Especially with fewer human barriers to access14

26. A Sketch of a SolutionHyperlinked Cloud ModelingDescribing Software, Architecture, and Infrastructure… Along with Entitlements!Cloud Entitlement ModelingParticipating RolesDigital Identity and AuthorizationA Cloud Entitlement Reference ArchitectureAn Entitlements Language15

27. Hyperlinked Cloud Markup LanguagesModular, layered, open-world, “connective tissue” for automated applicationsCONCEPTIMPLEMENTATIONMARKUPDEFINEECMLEDMLEMMLEXTENDELML16

28. Cloud Modeling Bridges Collaboration GapsEnterprise architectsIT OPERATIONSChange & Configuration ManagementStandard DesignsApplication architectsIT managementPolicy-Based Architectural DesignsAuditing, Metering, and PlanningEnd-to-EndCollaborativeIT Service ModelAutomated Planning, Provision & Configuration Dev/qa teamsDeploy & Configure SystemsCode, Resources, & BuildsSYSTEM ADMINSTest SystemStaging SystemProduction SystemEnterprise CloudPrivate & Public Cloud Resources17

29. Cloud Entitlements – Participating Roles18

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

31. Digital Identity and AuthorizationPossible Approaches or StandardsSAML v2.0 Web Services and Web BrowsersWS-Federation and WS-TrustPrimarily for Microsoft Windows and AzureOAuthRESTful delegated authentication, growing at IETFFOAF+SSLEmerging Semantic Web approach to identityMutual SSL AuthenticationBasic scenario, long history,relies on PKI trust20

32. A Cloud Entitlements Reference Architecture21

33. Entitlements ModelingA uniform Rights & Duties foundation is possibleE.g. Open Digital Rights LanguageBeware Patents(includes standardslike XACML!)Cloud could use targeted, minimal, extensions for payment & accountingODRL v2 Core Model22

34. A Minimal Licensing Entitlements LanguageExample Rights:ProvisionScaleQuotaExample Duties:Usage AuditSubscription fee23

35. SummaryTraditional Software Licensing is Under StrainOn Demand Models change prevailing assumptions of what is staticA full shift to “As a Service” models is not likelyBut the enterprise software industry must adaptChange business practicesand/orAdopt enhanced technology to resolve license complexity24

36. Thank YouStuart Charltonstuartc@elastra.comAutomating Application Infrastructure