Thursday, December 31, 2009

Software Licensing - 2010

Wow, can't say I'm upset to see the end of 2009! Having been in business since 1999 I've seen some ups and downs (think California, technology, early 2000's...ouch!) and am happy that with business maturity comes a certain tolerance to economy and business shifts...but I'm ready for this year to be over!

What's in store for licensing in 2010? I think we will continue to see a lot of acquisitions occur this year - which means eventual changes to volume licensing agreements. Be sure to keep an eye on mergers, acquisitions and divestitures to see which of your software licenses are impacted. It typically takes at least a year for any changes to volume licensing agreements but it might have a big impact on your maintenance decisions.

For Microsoft users there will be several new releases this year in Office, SharePoint and SQL Server to name a few. SQL Server is also being purported to have a couple of new editions and changes to some of the licensing terms (in particular SQL Enterprise and SQL Datacenter edition). Be sure to keep a close eye on these, especially if you have a virtualized model.

SaaS will continue to feel it's way and don't be surprised to hear more about the Microsoft Enterprise Subscription agreement that has long existed but (in my is all of this blog) wasn't priced well for most businesses.

Also, for those renewing Microsoft agreements there are some changes to your terms and conditions that you might not be aware of...the loss of the 30 day "grace" period on renewing of Software Assurance and an increase to 90 days for notice of change of reseller (hint, this determines who gets paid for your purchases and impacts any incentives resellers will offer to you - be sure to handle this on a timely basis if changing. You don't want the reseller you're "firing" to get paid for the renewal you do next month.)

What do you expect to see happen with software in 2010? Any licensing trends you know are happening or changes to PURs?

Monday, October 19, 2009

SaaS Contracts - A function of Software Asset Management?

Earlier this month I spoke at the IAITAM conference in Nevada on the topic of Licensing Implications in the Cloud (Saas), it was a lively group and an interesting subject. However; the most interesting piece was the conversation it sparked about "Should Software Asset Management (SAM) be responsible for SaaS?".

For me the not so private laugh was the fact that several audience members asked the question right when we got to my slide asking the same question...always nice to have evidence that I do think like a SAM Manager! OK, thanks for sharing my pat on the back...

This is a topic we hear more frequently at our clients. Does subscription software such as SaaS belong under the SAM umbrella or does it belong elsewhere? Certainly businesses have used subscription software for a long time, and commonly it is not handled by IT but instead handled by the business unit that is using the service (think Payroll, HR services, etc).

I don't think there is a global answer for this, but I would urge companies to think about what's at stake if that subscription is suddenly no longer available. What happens if the provider goes out of business or the server hosting the service fails? These are examples of topics that belong in the contract signed for the service...but will a business unit necessarily think to negotiate these into the contract? How is the usage being tracked to ensure that the billing is accurate? Is the business unit going to track it or are they just going to pay the bills (start thinking telecom audit if you don't think subscription billings can be inaccurate)?

While subscription software services might not fall under the traditional SAM umbrella, it needs to fall under someone's umbrella and the SAM Manager is probably the best suited to take on the challenge.

Would love to hear other's thoughts on this...

Thursday, September 03, 2009

Practical Advice to Reduce the Cost of Your Software Spend

It is not uncommon for software licensing and maintenance to be the 1st or 2nd largest budget line item for a company, so for all those companies getting ready to go into their budgeting cycle during this tough economy...reducing that number is going to be key to getting budgets approved and getting other key IT projects into the budget.

Here are some practical steps to reducing the cost of your software spend:
  1. Get informed - What software contracts do you have, when do they renew, what soft costs are included in the price tag, who's using the software and why?
  2. Clean house - Get rid of items not being used or consolidate where two products cover the same functionality (particularly key in IT management software). Focus on products you're still paying for, not those that aren't costing you any licensing fees currently.
  3. Research - For your software contracts, when is the publisher's year end (and by default their quarter ends)? Same thing for your reseller. Can you modify any of your contracts to fit those time periods? What would you want in exchange for making these modifications? What new technology are you implementing this year? Does that tie into any of your publishers "hot new products"?
  4. Examine all software maintenance contracts - Is maintenance mandatory or optional, what value have you received from maintenance to date, what is the roadmap for that product for the future and does it fit the timeline of your maintenance fees, are you fully leveraging what you've already spent?
  5. Evaluate your software reseller - How many resellers are you using? (If multiple, consider consolidation - and ask for increased savings in return.) How are they performing? What value are they bringing to the table for you? How dialed in are they to the publishers, their product use rights, incentives, licensing programs, roadmaps?
  6. Ask for help - Throw a challenge to your resellers and the publishers, have a clear picture of what you want as the outcome and ask for their help in reaching that outcome. Do this early in the game, it doesn't matter if your contract isn't up until next August - is there a significant financial benefit to renewing in December, May, June?
  7. Negotiate, Negotiate, Negotiate - Everyone is hurting in this market which means deals will be made. Play fair, recognize that everyone needs to make a profit to survive but make sure that profit includes your company.

This takes some leg work, it takes some investment of time and it takes some creativity but the payoffs are there. Alternatively, ask for help.

Thursday, August 13, 2009

What Your Software Inventory Tool Isn't Telling You!

Hopefully by now you've realized that in order to manage your software (or other IT assets) you need to have an inventory tool. As you will know from my other posts, you can't stop there...but it is a good place to start.

However; you need to understand your tool and how it reports data to you. Otherwise you might get an ugly surprise later on down the road when you find software installed on your systems that wasn't showing on your reports!

Inventory tools have a database of software titles associated with publisher and typically associated with a flag to indicate if it is licensable software (versus freeware, etc). The completeness of this database is the biggest value to you of the tool. With most tools if an executable is not in this database than it gets grouped into a "Misc" category and will fall into an exception report, a "catch all" report or might not be reported at all.

This could include new releases from publishers or simply publishers that your tool publisher doesn't categorize. These "unidentified" programs can cause you a lot of headaches - from a security, licensing and support angle.

Most inventory tools are updated on an ongoing basis as the publisher becomes aware of new software, but if you're not keeping current on your maintenance with that software you might not be getting this updated information.

Protect yourself - keep your maintenance current on any inventory tools you use, check the frequency of the tool publishers updates and include a check of "Misc" or "Catch All" software reports in your Software Asset Management process.

Additionally, if you are concerned about potential risk in this area you might want to consider having all of your software identified. Software ID Technologies has services that will identify all software in your environment. We've teamed with them on a number of engagements and they do a good job of taking the mystery out of those "unidentified" applications.

Thursday, July 16, 2009

Software Asset Management, Common Sense and Saving Money

Have you ever noticed how cyclical everything seems to be in this world? Well, one of the cycles I've watched since the early 1990's has been Software Asset Management.

The cycle (at least in the US, I frankly didn't track it much internationally) seems to be: Avoiding the topic, Awareness of an issue, Deciding to do something about the problem, Doing a full fledged project, Pairing that project down, Letting nature take care of itself and then the cycle starts again.

Obviously there may be some missing stages and some more "refined" terms than those I used but the basic concept is the same. When times are lush we seem to get into this phase where we feel the need to do a full bore SAM methodology but as soon as money and resources get tight we abandon the methodology in favor of "just making due".

This topic has been reinforced to me lately through two things: (1) a brand new client who emphasized the desire to have a "ala carte" proposal for SAM implementation - our existing clients know that providing options is the ONLY way we work, and (2) reading a fellow SAM practioner's (Kylie Fowler) blog which focuses on the "practical" side of ITAM and SAM (check it out...some great information).

In all our methodologies, let's not loose sight of the basic concept here...SAM is supposed to save money, manage risk and provide the business with the technology tools needed to be competitive. None of this requires complexity, extraordinary costs and it should all fit easily into common sense business practices.

If you're finding yourself ignoring your SAM methodology to run your business, do a quick re-evaluation of the methodology. What is valuable and what is just extra work? Streamline it, modify it, replace it with something what you have to do, but don't abandon or ignore it altogether as you'll then be doomed to repeat the cycle (losing out on all those great cost savings and risk management in the meantime!).

If this is still too much for your business right now - consider outsourcing your SAM. We do this for a number of clients and they've found that (a) our costs are ridiculously low compared to in=house, (b) we typically save them more than our annual fee in increased savings, and (c) it frees their staff up to focus on running the business. Talk to me if this is of interest to you.

Tuesday, June 02, 2009

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!

Sunday, February 22, 2009

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!