1/18/2010
At a recent event to discuss Microsoft’s new Windows 7
operating system, Microsoft chief executive Steve Ballmer found
himself being asked to simplify the company’s software
licensing.
That’s a common refrain these days, for all vendors from their
customers. As FAST Ltd’s recent roundtable demonstrated, making
sense of vendor software licensing can be an imposing task. With
new technologies and new ways to procure software, such as
Software-as-a-Service (SaaS) and virtualisation, the world of
licensing is becoming more complex. Adding to this confusion is the
fact that the recession has made all businesses re-evaluate their
spending habits, and consider moving from paying for IT with large
chunks of capital towards monthly instalments financed from
operational budgets. That will eventually reshape the way
organisations buy IT, with Software-as-a-Service, managed and
hosted services, virtualisation and cloud computing all adding to
the potential disruption and shaking up the status quo.
As the
roundtable discussed, for FAST customers such as Vodafone,
Brookstreet des Roches and Lloyd’s Register, it’s all about
managing the complexity. For example, Mark Duffy from Lloyd’s
Register sees more difficulties around the application side, such
as financials and HR applications. “We’ve invested in quite a lot
of support and maintenance fees,” he says. “But why are we still
paying so much money when we haven’t modified the application? It
can be quite complex and not easy to understand.”
Duffy came into his role three years ago with no background in
software asset management and, like many others in the same
situation, he has had to learn on the job. And now he has his CEO
looking over his shoulder.
“Our CEO always looks at our software budget, says it is far too
high and is always trying to strip money out of it. Now we are
being asked to look at an ROI of 12-18 months on what we buy or
develop. It is about trying to find balance in our tactical
solutions.
One solution Duffy would like to see is vendors having a
standard contract for software licences with terms and conditions
across the board.
Heather Garner, a software specialist at Vodafone, agrees that
it can all become very complex and challenging to understand.
“There are vendors with a lot of legacy software and then you have
other complexities to worry about, such as how you monitor virtual
environments.”
Microsoft has already begun tackling simplifying software
licensing, adopting a more customer centric approach to both
programmes such as Select or Open Value, and product licensing
offerings too. Emma Healey, Microsoft’s licensing escalation
manager, who attended the FAST roundtable, and who also has her own
blog (http://ladylicensing.spaces.live.com/blog/) on Microsoft
licensing issues, agrees that licensing is complicated but insists
it can be demystified.
In some senses, we’re in danger of making some of the same
mistakes as we did way back in the mainframe era. Complexity is a
concern but we shouldn’t be frightened by it. Putting things right
will require a collaborative effort from both sides, from
publishers and industry experts alike, in getting vendors and
organisations travelling in the same direction. At FAST Ltd, we’re
here to help meet the challenge.
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