Ways to Cut Costs - Software Licensing

It's funny - when times are lush, companies feel they don't have the time to put in a SAM program...when times are tight, companies feel they don't have the money to put in a SAM program.

Unfortunately, it's a Catch 22...if you had a SAM program, your staff would have more time because they would be more efficient and you'd have more money because you wouldn't be wasting it on higher maintenance fees and over priced products.

Sorry, I'm on my soapbox and I know it. Just remember, it doesn't take as much time or as much money as you think it does and the benefits far outweigh the costs.

Two recent items have come up that impact the costs of software licensing:

1) Microsoft Financing - they've just changed the rules.
2) Webinar Series "Cutting Costs - Software Negotiation"

Microsoft Financing (for those of you who didn't know it, Microsoft will finance your deals that involve purchases of Microsoft software as well as hardware and other services) has changed the rules a bit. It used to be that you didn't have to buy much software to finance your whole deal...apparently they are now going to require that at least 35% of the deal be for Microsoft software. Read the details for Scott Bekker's blog.

Webinar Series on cutting costs through software negotiations. For 10 years we've been helping our clients cut their costs (after they've already internally negotiated the deals). We're now offering a webinar to help teach you some of our techniques. This series isn't about contract law, it's about understanding the insides of the deal and turning it into cash and benefits for your company.

So, I know many of you are trying not to spend money right now on software...don't forget - those annual maintenance agreements you're paying is still spending money and many of them can still be renegotiated to lower your costs!

Software Licensing - What You Don't Know Can Cost You!

I was having a conversation with a gentleman on Friday night at a business mixer and discovered that he was an IT infrastructure consultant advising a fairly large size enterprise on a new structure to support their very distributed user-base.

During the conversation he mentioned his surprise at the amount of money it was going to cost his client to implement Microsoft Office 2007 for their 7500 users. We talked a little more as I wanted to understand what program the company was considering purchasing through - and I found out that they had formerly had Software Assurance but it had expired almost 2 years ago. What this consultant didn't know (and neither did his client and no one else was bothering to point it out) is that Office 2007 was released to the general public on 1/27/2007 and (don't quote me on this date) was available to their volume licensing customers around October 2006. Software Assurance entitles you to the latest version of the software released as of your expiration date - whether you've installed it or not. That is in perpetuity (for traditional licensing).

The result being, that was $2m the client was going to spend for software they were already licensed for! I told the consultant to go back to the client and have them review their licensing statement of the Microsoft Volume Licensing web site to make sure dates were good but that it looked like that was money they could keep in the bank (and to hire us in to review the rest of their licensing plans to avoid any other costly mistakes).

This is an area where we frequently find clients uninformed or misinformed. Talk to an unbiased licensing professional before making a software investment - what you don't know can cost you a lot of money!

Software Licensing - IT Cost Savings Opportunities

If you've followed this blog at all you know that a recurring theme is the money saving opportunities inherent in a successful Software Asset Management program (just ask our client who has outsourced their SAM program to us...and already saved double our annual fee in just the second month of the program). However; this month I want to focus on some specific technology projects that can save significantly on software licensing costs.

This list is by no means comprehensive, so if you've had success with others please share!

1) Server Virtualization - it's on everyones list anyway...but it's also an area where I see frequent mis-management of licensing so please, do it right! See the Microsoft licensing snapshot below and then do the math of what is the most effective for your organization (and as always, consider future growth).

Microsoft virtual server licensing in a snapshot:

• Windows Server Standard allows for 1 install (and technically 1 physical instance to enable the virtual environment),
• Windows Server Enterprise allows for 4 virtual instances and 1 physical instance (but that instance is only allowable to enable the virtual environment, this does NOT mean that Enterprise allows 5 fully functioning installs),
• Windows Server Datacenter allows for unlimited installs but is licensed per processor (and typically costs about the same amount per processor as Windows Enterprise does per server).

2) SQL Server 2005 upgrade - if you still have a SQL Server 2000 environment, consider upgrading.

OK, this could come under the category of spending money - but considering how many of these I've found were never fully licensed in the first place you might find it helps you finally get fully licensed but for less money.

SQL Server 2005 technology and licensing enables many companies to move away from the need for the Enterprise edition and duplication of licensing through higher ceilings on size for Standard and the change in clustering and failover licensing.

3) Look at your network utilities. How much redundancy do you have between your products?

I see it time and time again, a company has a patch management tool and a desktop configuration tool and a asset discovery tool and a software deployment tool and a ....

However; take a took at the toolsets offered by your 3 primary tools. Do not be surprised to find that they've expanded functionality into an area you're covering with a different tool. Find out if you're paying the extra money because it truly adds value to the organization or if it's simply out of habit and a need for education on a tools features.

On a wrap up note, there's plenty of money left on the table with technology. This might be a really good time to gather that money up and put it back to work for your company.

I've found a new site focusing on ITAM and SAM, I recommend checking it out...The ITAM Review.

Happy Holidays and a successful and joyous New Year!