Making Sense of Software Licensing

• Monday, 19 October 2009

•Roundtable experts discuss the complexity of software licensing
•New technologies such as virtualisation are putting compliance under pressure
•Experts agree that vendor programme and product licensing models need to drive and educate rather than complicate
•Users are now having to wrestle with understanding licensing terms of up to 150 vendors

Maidenhead, UK, 19th October 2009: FAST Ltd, a leading UK authority on Software Asset Management and IT Compliance, providing software, education, consulting and managed services, hosted a roundtable of industry licensing specialists recently, the results of which were fascinating. The experts gathered together to give their views on software licensing and to examine its complexity, especially in the current challenging economic climate.

With new technologies, and new ways to procure software such as SaaS and virtualisation, the world of licensing is becoming more difficult to grasp. Participants reported that adding to this confusion is the fact that the recession has made all businesses re-evaluate their spending habits. It has also exacerbated a major trend that was already underway: the move from paying for IT with large chunks of capital, towards monthly instalments financed from operational budgets. It was agreed that the wider trend is that the Credit Crunch will eventually reshape the way organisations buy IT, with Software-as-a-Service (SaaS) managed and hosted services, virtualisation and cloud computing all good examples of this.

The roundtable event, ‘Making Sense of Licensing’, part of the CEO Series was hosted by FAST Ltd and included software vendors Microsoft and Oracle, together with sponsors Numara Software and Webroot, Rocela, the BSA, the UK Oracle User Group, FAST customers Vodafone, BrookStreet des Roches and Lloyds Register, and a representative from industry analyst Quocirca.

A key driver for the discussion was the complexity of licenses from vendors and how best to approach individual licensing requirements. Both Microsoft and Oracle have come under fire from some small and large users for having licensing environments that are seen to be difficult for them to understand.

In response to this, Emma Healey, licensing and escalation manager at Microsoft said that the software vendor has adopted a new approach to licensing. “There will be more of a customer centric approach – today as a customer you can buy traditionally, you can choose payment options to suit, pay on an annual basis, or pay monthly. We are looking at improving both programmes and product licensing offerings. What matters is that those programmes meet the needs of our customers and how those customers want to buy and manage Software Licenses purchased from us. We used to have over 100 programmes. Now we have 17 on a worldwide basis.”

Meanwhile at Oracle, UK LMS manager, Steve Borsuk says, “Fundamentally, Oracle's core licensing for technology hasn't changed in 7 years. In addition, Oracle publishes all of its price lists and provides a licensing user guide plus customer facing documents to help explain Oracle's policies surrounding specific topics. Whilst understanding that it is difficult for customers to manage licensing across multiple vendors, Oracle offers help by the License Management Services organisation to educate customers on their contracts and licenses.”

Participants agreed that it’s the organisation’s role to help its company get to grips with the basics of licensing, as the people handling compliance are generally thrown into it and are not given the education and training they need to manage the ins and outs of licensing. And at the end of the day are still left asking ‘am I in compliance?’

Ian Moyse, EMEA channel director at Webroot pointed out that this means not a lot has changed.
“All the questions we’re asking are very similar to those of ten years ago. The reality is that customers aren’t dealing with two vendors. There could be scores of different vendors that the customer is dealing with. For the customer, especially smaller ones, how do they ensure that they are correctly licensed? How do they get close enough that the vendors are happy?”

From the customers’ perspective, a key area of discussion was the overall management of their contracts with vendors and how the biggest issue at the moment is dealing with the cost pressures of the current economic environment.

Corrianne Allen, contracts management specialist at Vodafone UK commented: “The biggest trend is in strategic contracts. We are keen to bring down IT costs and so we are tying ourselves up for longer to bring down those costs. We want to spend time to get the right contract in place and then spend time managing that contact and sweating the deal.”

Mark Duffy at Lloyds Register added that he came into his role three years ago with no background in software asset management and has had to learn on the job.

“Our Senior Executives always looks at our software budget, say it is far too high and are 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. I’d like to see vendors have a standard contract for software licences with terms and conditions across the board.”

On behalf of the user groups at the table, Ronan Miles at the UK Oracle User Group mentioned that his conversations with users suggest they believe that the complexity of software licensing makes it difficult to understand exactly how the costs are built up. “The suppliers deserve their slice of the piece back. The licensing price is the taxation applied to the market to ensure that the vendors get their revenue back. The problem with being an Oracle customer is that it’s like sitting on a plane. You shouldn’t ask the guy sitting next to you what he paid for his ticket.

Ian Moyse at Webroot added that at Webroot they manage customers’ email and web security via the software as a service (SaaS) model where, from a user’s perspective, worries about licensing are taken care of, which is one less problem for customers to be anxious about.

All participants agreed that there needs to be a move to educate rather than complicate when it comes to licensing. Oracle’s Steve Borsuk said there is one overwhelming message for customers.

“It’s about the education. Some of the mystery can disappear if you know where you’ve come from and where you’re going to. Virtualisation is not going to go away. So let’s talk about adding value to your licence. What have you got? Why have you got there? Now, how can we go forward as partners?”

FAST Ltd’s head of consultancy and membership products and services, Phil Heap, however admits that there is still some way to go in making sense of licensing.

“We’re making the same mistakes as we did in the mainframe era. There is still some way to go and we’re all in it together. There has to be a collaborative effort that comes from both sides: publishers have got to make it easier for us to manage. Industry experts have got to help fix things together when it is broken.”

To find out more about FAST Ltd’s professional consultancy and managed services, please visit FAST’s website: www.fastconsultancy.com or call 0844 815 5741.

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Notes to editors:

About FAST Ltd:

FAST Ltd, part of IRIS, is the UK’s leading authority on Software Asset Management and IT Compliance, providing software, education, consulting and managed services. For over 24 years FAST Ltd has helped over 8,000 organisations control their IT costs, mitigate risk and deploy best practice IT using expert impartial and independent advice.

The FAST Compliance Programme focuses on helping organisations achieve ‘best practice’ in IT and software compliance. The business supports its 2,700 customers to reach and maintain The FAST Standard for Software Compliance (FSSC–1:2007), a private Standard which was developed in collaboration with BSi. The FAST Standard also addresses a significant proportion of the requirements of ISO/IEC 19770-1, the International Standard for Software Asset Management. The Federation Against Software Theft Investors in Software (FAST IiS), which aims to combat software piracy, endorses the Standard.

FAST IiS, which is a not for profit organisation limited by guarantee is owned and funded by its members – software publishers, solicitors, IT resellers etc. FAST Ltd has a mandate from FAST IiS to advise and help UK organisations on the issue of software compliance and promote the legal use of software and it is the only organisation that meets the FAST IiS’ mandate.

For further information:

Paula Elliott
C8 Consulting Ltd for FAST Ltd
+ 44 (0) 118 9001132
paula@c8consulting.co.uk

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