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!

Software Licensing and Tough Economies

Is your company tightening its pursestrings? Have you been told to hold off on all "unnecessary purchases" for a couple of quarters? Did your 2009 budget just go through rather drastic cuts? Have layoffs occurred or are they looming?

If you answered yes to any of the above, you're not alone. For any of us who came through the "Dot Bust" of the early 2000's (particularly in Northern California), we may remember these signs well. I remember heading into it (as a not yet 2 year old consulting business) and the phases that it went through. However; I also have worked with many businesses since and have seen the outcome of decisions they made to "save costs" that had long term negative impact.

Here are some things to think about:
1) You can't manage what you don't know. Software costs are one of the line items you're going to be watching closely - make sure you have the tools in place to tell you exactly what is being used and what you own. Then you can continue to provide your business users with the tools they need to do their job but ensure that you're not over-purchasing in this category.

2) Servers and client access licenses - get expert advice. This is consistently the area where I see costly mistakes being made, typically on the basis of relying on the knowledge of someone who doesn't keep current with publisher's product use rights. A recent half day consultation with us saved one of our clients $30,000 in server licensing costs. This is an area where it doesn't cost much to get advice that can save you a bundle!

3) Review your maintenance agreements and renewal contracts - in the past several "lush" years we've seen many clients opting for convenience over cost savings. Now that things are leaner, you might need to re-think some of your past decisions to ensure they are meeting your current goals.

4) Evaluate your reseller. Just like #3 above, are the "value added services" provided by your reseller justifying their markup on your software? This is another area where that client we mentioned in #2 received significant benefit from that consultation. They needed to change resellers and leveraged us to make the change - it resulted in $15,000 in free consulting services from us as a "thank you" from their new reseller...that's paying for them to have us manage their software license situation monthly for the next year!

5) If you're downsizing and having to "do more with less", we can ensure you still have the information you need on a monthly basis to get full value of your software assets...for a fraction of the cost of doing it internally - call or e-mail me and free up some of your staffs limited time.

These are just some suggestions, the important thing to remember is this...in times of financial hardship it is our responsibility to ensure our decisions help our companies (a) survive the downturn, and (b) are positioned to prosper immediately in the upturn.