The Rise of the Embedded License

Embedded licenses are not new, but they are becoming a vital mechanism in this digital age where hardware and software products are merging into a single offering. We are all used to purchasing a desktop or laptop with a pre-loaded operating system and office software, where we see the software as part of the deal. This approach is extending to everything in our connected world. Smart homes and the devices they contain, wearable devices and smartphones are just some manifestations of the blending of hardware and software. When we download an app to our phone from the Apple or Google store, we don’t think twice about the licensing implications, the app may even be free, and is monetized by carrying ads that we accept in return for not paying for the app. Intelligent refrigerators and washing machines are commonplace; we wear fitbits to measure our vital signs for health and sporting measurements. All of these devices require some software to fulfil their purpose, but, as a consumer, we do not think of the software as being separate from the hardware; that is, until it malfunctions.

Traditional concurrent or dedicated software licenses are not the right vehicle for measuring compliance or checking on entitlement, and this is why embedded licenses are coming into their own. Another key factor in the adoption of embedded licenses is the growth of virtualization and cloud computing. If a user is employing licensed software on a virtual device, or working in the cloud, conventional licenses may not be the answer.

How the Embedded License Assists Device Manufacturers

The real value of an embedded license for a device manufacturer is in its capability to tailor the entitlements and features associated with devices down to an individual level. This enables the device manufacturer to cut down on the number of variants and models of a particular device, because these can be controlled via the licensing software. For instance, let us say a company manufactures a sensor for water measurement, which can measure:-

  • PH levels
  • Oxygen carrying capacity
  • Water temperature at 1 meter
  • Water surface temperature
  • CO2 levels
  • Methane Levels
  • E Coli prevalence
  • and 20 other permutations.

The customers for this sensor will want to measure some of the variables, but maybe not all of them, while they may have a specific requirement that is not currently measured. Instead of producing an array of sensors that fit the customer’s requirement (and having the maintenance overhead of keeping the specs on that model for future orders) the features that are needed are provided, and those to which the customer is not entitled are excluded by the embedded license. The extra features can always be added by modifying the license. In addition, any software upgrades that need to be applied are managed automatically by the embedded license. The vendor needs to manufacture only one, or possibly a few sensor models and can rely on the flexibility provided by the embedded license to tailor the product for the customer, right down to individual devices and users, if required.

Other Benefits of the Embedded License

Added Security

In order to protect the embedded license from cyber threats, as well as prevent unauthorised use of the software the license is managing, it will generally have security features installed that block hacking attempts. Not only does this protect the license, it also assists in protecting the vendor application(s) embedded in the device. One of the major suppliers of embedded licenses is Gemalto, specialists in cyber protection. Flexera’s embedded license product also features encryption and what they call “code obfuscation”.

Long Term Support and Availability

Purchasers of embedded licenses often get superior product support. For example, Microsoft guarantees a life of at least 15 years for all products sold via the Windows Embedded Channel, a benefit not extended to purchasers of other license types. Users of legacy products such as NT 4.0 can still rely on product support through the Embedded Channel, although it has passed its sunset date. The embedded license also ensures that upgrades are applied as and when needed, without impacting the customer.

Engage with More Environments and Operating Systems

The embedded license is very versatile and most license management companies have ensured that it can be used for a variety of operating systems, including mobile and open source. Where it is especially useful is virtual environments, such as the cloud, and can recognize virtual CPUs and check on their validity, rejecting virtual clones and other threats.

Take Advantage of more Licensing Models

In order to engage as many customers as possible, the more license options that are available, the better. Apart from traditional subscription and purchased models, the device manufacturer can provide pay-per-use licenses. These licenses can be very granular and identify and differentiate usage per feature.

Proactive Management and Predictive Analytics

An embedded licence functions pretty much in the same way as an IoT device, in that it sends data back to the licensor in real or near time. This data can be harnessed to better understand how the hardware and software is being used, which can be analysed in turn to identify new products and markets.

Licensing in the Future

The main license management organizations have recognised that license management needs to be more automated and more responsive to licensed customers’ individual needs. End customers do not want to spend their days managing a variety of licenses, worrying about costs, optimization, upgrades and renewals. They also do not want the threats of non-compliance hanging over their heads, especially when the “user” is a device, rather than a human.

Device manufacturers want to monetize and protect the software they provide with their devices, as well as manage their customer base. Ease of upgrades is facilitated via embedded licenses and data is provided that helps the company refine their offerings and identify new opportunities. Most of these organizations have been on the receiving end of license management for software products they use daily, such as CAD and PLM, so they have a keen understanding of what licensing features work best both for them and their customers. Where the embedded license is offered as a system development kit (SDK), they have the ability to tailor new and interesting license models.

End users of the embedded licenses may welcome their flexibility, but they now have a more complex licensing landscape, with a blend of perpetual, subscription, pay-as-you-go and other license types. This is where OpenLM can assist, as it recognises embedded licenses and their features in addition to the other traditional licenses, and can provide comprehensive management and reporting of these disparate license types across vendors and products, providing an easy-to-use single interface. Consult with our support team on how OpenLM can make your license management and administration simpler and more effective.

OpenLM Java policy 2018-2019

General

OpenLM is using Java infrastructure for the following components for on-premise installation :

  • OpenLM Broker (License Manager Agent)
  • OpenLM Applications Manager
  • OpenLM Router
  • OpenLM Reports Scheduler

Currently all these components use Oracle Java 8 as infrastructure. The infrastructure is distributed with OpenLM installer.

Oracle has announced that, effective January 2019, Java SE 8 public updates will no longer be available for “Business, Commercial or Production use” without a commercial license. This will effect OpenLM customers and the purpose of this document is to explain OpenLM policy in regards to this change.

OpenLM components version 4.4 and earlier

Version 4.4 of OpenLM is the current (Dec 2018) version of OpenLM. We are planning to release version 4.5 of OpenLM during the first quarter of 2019.

OpenLM version 4.4 Java software installer also installs version 8 of Oracle Java.

Statements

  • Customers that are using any OpenLM Component that is running on Oracle Java version 8 can continue and use it until we release of the next version of OpenLM.
  • Oracle will not provide any public updates to Java 8 after 2018. Customers need to take that into account when considering the security of their systems.
  • OpenLM is planning to release version 4.5 of OpenLM components on the first quarter of 2019.

OpenLM components version 4.5 and higher

Version 4.4 of OpenLM is the current (Dec 2018) version of OpenLM. We are planning to release version 4.5 of OpenLM during the first quarter of 2019.

We plan to release OpenLM components version 4.5  with OpenJDK version 11 which is a fork of the original Java. OpenJDK will replace Oracle Java that was distributed with our products.

Statements

  • The use of OpenJDK Java will allow customers to continue and use OpenLM Components without the need to pay royalties to Oracle.
  • OpenLM is doing efforts to keep the distributed OpenJDK infrastructure updated but it is customer responsibility to keep the infrastructure updated.
  • OpenLM is planning to support both Oracle Java and OpenJDK Java.
  • OpenLM will support the switch between installed Java versions so the customer will be able to configure OpenLM to use a different version of Java that is installed on the workstation. This will allow the customer to switch from using the provided OpenJDK Java to Oracle Java.
  • OpenLM is planning to offer Oracle Java infrastructure as part of OpenLM Component for an additional fee. Such license will be limited to running OpenLM Software only, not any other Java software that might be installed on the same machine.

 

References

Oracle announcement:  https://www.oracle.com/corporate/pressrelease/java-se-subscription-offering-062118.html

OpenJDK Site: https://openjdk.java.net/

OpenJDK License with classpass exception: https://openjdk.java.net/legal/gplv2+ce.html

How the Internet of Things has changed Software Licensing

We are accustomed to buying one or more copies of a software product from a vendor and paying a license fee for the privilege of using it. Usually, accessing such licenses is based on the prospective user rather than the device on which he is working, but licenses can be linked to a specific device either via software or through a physical mechanism such as a dongle or USB stick. There are also embedded licenses, which are deployed in a device, such as a laptop with Microsoft Windows. While embedded licenses are not a new concept, they are going to become ubiquitous in the universe of the Internet of Things (IoT). Estimations of how many devices will be on stream by 2020 vary widely, but a conservative estimate is 20 billion (Gartner Group). Each and every one of these devices will be gathering and transmitting data, creating immense opportunities for those who enter this market. A survey by ZDNet’s Tech Pro Research found that 65% of companies have already implemented IoT strategies or are planning to do so in the near future. What is holding back even more growth in this ecosystem are issues such as securing and monetizing the devices.

The Evolution of IoT

The use of sensors in devices and products is not new. Take motor racing for example. McLaren has been in Formula One racing for decades, and they use up to 300 sensors in a vehicle to understand what is happening in a vehicle on the track. The knowledge gained from analysing this data and using it to predict events has made them experts and created a business model where they are an IoT company.

The devices can be very complex, and surprising new products are emerging from companies such as John Deere. Their tractors and other agricultural machines use sensors to make plowing and planting seeds more efficient, but they now also provide agricultural scientific information via tablets that analyse soil quality as part of the package. They even analyse manure quality being spread on fields where sustainable fertilization is being used. Every industry has the potential to come up with innovative ideas on how to use IoT. The trick is to make it profitable and sustainable.

We are All Software Companies

“The notion that there is huge difference between the industrial world and the software world is no longer valid, those days are over. In today’s world, everything is software”

Jeffrey Immelt

CEO of General Electric

 

While we mentioned that 65% of companies are either immersed in, or starting to enter the IoT universe, the hardware is only a small part of building an IoT

The billions of devices using M2M (machine-to-machine) technology to collect and transmit data all have something in common; they need software that manages how and when they collect this data and, depending on their complexity, whether they perform some pre-processing on this data. This means that the management of these devices is critical.  Security is a big headache; there is no global standard for IoT security, although the IEEE is working on it, security is pretty much up to what the manufacturer decides is appropriate. Side by side with security concerns is the management of the software used in and around the devices. This is where license management is so important.

License Management for IoT

Management of IoT licenses needs to be both customer-centric and easy to administer. Upgrades and fixed to software must be delivered seamlessly and timeously. It is critical to know the status of any one device with respect to versioning and features installed. To do this embedded licenses are required. An embedded license is leaner and meaner than traditional software licenses, with a smaller footprint. It manages traditional compliance, but also controls entitlement at a customer and even a device level.

The granularity of entitlement management defines what features are compliant. A user may have access to a license in a concurrent pool, but they are only entitled to use standard features. Use of advanced features is a breach of compliance. The need to manage entitlement has resulted in many organizations investing in License Allocation Management (LAM) software, so that they can manage access on a single user or device level.

Gartner Group calls this management system an LEM system – License and Entitlement Management. They also predict that not putting an LEM system in place can have dire consequences.

“By 2022, a failure to put in place a license and entitlement management (LEM) system will result in a 30% loss of potential revenue generated from software for device manufacturers connecting to the Internet of Things (IoT) universe”

Gartner, July 2017

Licenses for every Device

What this means both for suppliers and users of IoT devices, is that the number of licenses to be managed down to device level will expand exponentially. Take for example, a wearable device in healthcare. That device could be reporting on a whole series of the patient’s vital signs, from blood sugar levels to cardiac rhythms, using different software to analyse the data. Which software is enabled and entitled on the device must be recorded. Then this data, partially analysed or raw, is transmitted up the line, probably to an edge computer, which again will be subject to a bundle of licenses. Most edge computers perform additional pre-processing before transmitting the data and information up stream to either an on-site central computer or a cloud environment.

This is why license management in the world of the IoT is a new threshold. While the embedded licenses have been designed with a refreshing focus on the customer, which is essential for proper reporting on entitlement, such as is provided by Gemalto, for example; the customer needs to reassess if their license management and administration is in line with the new rules of software monetization. This is why our existing customers are using our OpenLM LAM product. We designed this product in response to requests from organizations who were not our customers, but were having problems finding a product that managed both licenses and entitlement.

 

Is your License Management Flying below your Risk Manager’s Radar?

Most organizations have a well-developed risk management practice. The most mature organizations practise enterprise risk management, which is process-based and cross-functional. Other companies are still on their way there, but do at least manage operational risk and project risk. Within these companies, most IT business units practice IT asset management (ITAM) and software asset management (SAM). What is disturbing is that SAM risks are generally missing from the organizational risk register, and are only visible at IT level, or come under annual scrutiny at license renewal time. What can happen under these circumstances is that an audit by the software vendor can identify non-compliance and make a huge hole in the company’s annual revenue. We are not talking small or medium businesses here, although they are also at risk.

SAP on the Warpath

When SAP saw its revenues flagging, a decision was made to tighten up on compliance.  It decided that APIs that allowed other software such as Salesforce to access the SAP database were “users” and were breaching their agreements with customers. It confronted some of its largest customers, like Diageo and AB (Annheuser Busch)-InBev and won. The claim against AB-InBev was for $600-million – even the world’s biggest brewer cannot afford to cough up such a totally unexpected and unbudgeted expense. There was an out-of-court settlement, which would have been at a lower sum, but it would still be material enough to feature in the next annual report.

SAP’s aggressive policy is open to dispute, and Diageo recently won an appeal against the judgement passed in 2017, but it raises some serious questions. If these massive organizations cannot manage their compliance effectively, what hope is there for the rest of us? The next question is whether the risk of non-compliance is listed as an organizational risk, and not merely the CIO’s nightmare?

It is not Just about Compliance

While every CFO understands licensing issues around SAP, Oracle, Microsoft and Adobe, because this software is used throughout the organization, they are often in blissful ignorance of the same threats that specialized engineering and scientific software represent.

  • the licensing costs per user are usually very high, so overspending is easy
  • some of the products are not managed by the IT department, but rather by the engineers and researchers who use them, such as network planners, transmission engineers and even environmental impact assessors in an energy company. They may even be in the hands of third parties.
  • The software vendor provides the licensing software that estimates how much the company owes (a case of the wolf watching the sheep).
  • Asset management policies are often not in place or monitored.
  • Good license administrators are hard to find.
  • Major vendors are discontinuing perpetual licenses, which have always been the cost-efficient way to minimize costs and maximize productivity.
  • Digital disruption is bringing new complications to licensing. This includes cloud computing and SaaS, virtualization, BYOD (bring your own device), the IoT and artificial intelligence.

While most of these issues appear to be something that can be relegated to IT, in fact, each of them can affect the bottom line. While they can be managed by IT, understanding these risks and their mitigations is critical at executive and even at board level. After all, most companies are totally reliant on proprietary software to function on a daily basis. A dispute which invalidates all the CAD licenses and removes access in a manufacturing organization would cripple it.

What Should be in Every Risk Register

Each one of the items listed above is a discussion in itself, but here are a few risks we believe should be listed in every company risk register and actively monitored by the CRO.

  • Risk – We do not manage and monitor compliance for every one of our software assets.
  • Implications – financial and reputational risk
  • Mitigation – fix this. If you don’t believe that there are companies who are in this position, Gartner ran a webinar on ITAM risk management and 10% of the audience admitted to not only not managing compliance, they were not even planning for it. And while 40% of the audience had an asset management strategy in place and working, the rest of the audience were still working on it.

There is no quick fix, as all the following risks contribute to the overall vulnerability.

  • Risk – There is no IT asset management policy in place
  • Implications – financial, cyber and governance risk
  • Mitigation – Structure a policy that covers all types of computing, from on-site to cloud and mobile, and implement the processes that support and monitor adherence. Train all employees and create awareness, as well as imposing penalties for infringements.

 

  • Risk – We do not have centralized control of our software licenses.
  • Implications – financial, compliance and operational risk
  • Mitigation – Try and centralize control as much as possible, although this can be n issue for multinationals. At least ensure that the asset register is complete.

 

  • Risk – We do not know if we are using all our licenses to their maximum potential
  • Implications – financial and operational (productivity) risk
  • Mitigation – Become active in license management, with centralized control and your own license administration and management which you can use as a yardstick against vendors’ claims.

 

  • Risk – One or more of our vendors is sunsetting perpetual licensing
  • Implications – financial – subscription licensing on average is 1.8 times more expensive than perpetual licensing (Gartner), business continuity.
  • Mitigation – Decide whether to remain on perpetual licensing, move to subscription licensing or discontinue the relationship and move to another vendor.

 

  • Risk – We do not understand the implications of all the new digital models.
  • Implications – could be anything from financial risk to business continuity.
  • Mitigation – Get to grips with what impact digital disruption will have on your licensing costs and compliance risk (it does not go away just because you are using a browser)

Building a Proactive Approach.

We mentioned above that 10% of the audience had no ITAM strategy in place. What was even more disturbing is that in the same audience, 24% of participants said they had no SAM tools in place.  This does question how effective their ITAM strategies were, even if they were still being implemented. There is no way that software licenses can be managed effectively without a good license management application. The license managers supplied by vendors were written with the vendor’s interests in mind, and focus on compliance. When the same audience were quizzed on their primary reason for asset management, only 27% mentioned compliance; 54% of the audience wanted to optimize their license usage. For that you need a license management application that will help you realise your objectives. This is why we at OpenLM founded our business, to help customers get the most out of their licenses.  It started with ArcGIS, but now we can help you with thousands of engineering and scientific and engineering applications from the world’s leading vendors. Not only do we have licensing management software, we offer consulting, support and outsourcing services to help you simplify license management. Take a trial of our software or ask to speak to a consultant, license management is our passion!

Solidworks – Which Licenses Should we Get?

The trend to subscription licensing started by Adobe, is a concern for organizations that use engineering and scientific software. The licensing costs for these applications eat big chunks from the IT software budget, but the tools are essential to the business as a going concern. To best manage costs, companies have traditionally purchased perpetual licenses, based on a maximum number of concurrent users, rather than license-per-user models. However, some software vendors have seen Adobe’s success, admittedly after an initial drop in earnings. The temptation of a steady monthly revenue stream is also far more attractive that the peaks and troughs of annual renewals.  Some vendors have taken the plunge: ESRI got massive pushback from their users when they tried to impose a subscription model and had to adjust their thinking in order to appease their customers. Autodesk is unrelenting – they are determined to phase out all perpetual licensing, and time will tell how this strategy works.

Solidworks New Licensing Strategy

Dassault’s Solidworks subsidiary has been watching developments and has also entered the subscription versus perpetual licensing fray. However, they have kept options open for their customers by offering as much flexibility as possible. In view of their product portfolio, this makes sense. While computer-aided-engineering (CAE) products could be software that a company uses on occasion, a full product lifecycle management  (PLM) suite is obviously a long-term investment and a perpetual license would make more sense.

In order to make subscription licensing more attractive, as well as more affordable for small and medium enterprises (SMEs), Solidworks offer a 3-month subscription model, rather than locking the customer in for a full year. This would make sense where a steel engineering company has designed a product that requires plastic molding, for instance. The Solidworks Plastics application is dedicated to designing injection molds for plastic products, and if this is a once-off design by the company, they can opt of the three-month subscription to get their product to market without having Plastics lying on the shelf for another nine months.

Existing and potential customers are sitting up and taking note; however many of them are asking for a one-month license too. Whether Solidworks decides to add this to their offerings remains to be seen.

The Thinking behind the Strategy

Solidworks CAD is the leading 3D CAD software, but it comes with a $4000 price tag for one perpetual license. Large corporations can manage this, and where their user to license ratio is over 2:1, this is the best priced and easiest to manage option. The same does not hold true for small and medium businesses, where the high upfront price makes these companies purchase competitor products. The subscription license removes much of the barrier to entry and can bring in new customers who balk at the perpetual cost, but can afford a 12-month subscription, or even put their toes in the water with a three-month subscription.

What gives Solidworks the edge in this circumstance is their extensive academic reach. They have built a large footprint of schools, colleges and universities that have Solidworks on campus and made it engaging for students by offering certification and work-anywhere options. So, when the student is no longer a student, but in business, they are comfortable with the product and don’t have the learning curve that investing in a competitor product will bring.

Another incentive to invest in Solidworks is their Entrepreneurship Program, which assists small startups and entrepreneurs to get going via partnerships with a large community of incubators and accelerators.

Clearly, these strategies are all aimed towards building market share in the long-term, but they are far more customer-centric that Autodesk’s uncompromising approach.

The Problems with Subscription Options

The main problem with a subscription option is that it is not a long-term or lifetime relationship. It is fine while it lasts, but what happens when the break-up comes? If the subscription was cloud-based, what happens to your drawings and models? They are your intellectual property, but how are they going to be returned to you and which file formats will be used?

This is something Peter Rucinski, SOLIDWORKS Director of Product Portfolio Management, points out in engineering.com, giving the analogy that it would be like asking for your color prints back, but getting black-and-white images instead. 3D imaging is rich and complex and it could be hard to get back your full intellectual property as you designed it.

This should not be the make-or-break factor in deciding which software to purchase, but the implications should be thought through carefully.

Rent or Buy – Find the Best Fit

Clearly, the decision is dependent on your own business model. Any software that supports a core competence needs a long-term relationship, and the perpetual model is the best fit if you have a medium to large number of users.  Where you only have a few users, the subscription license is probably the most affordable option, although you will still need to monitor usage to keep costs down.

If you have a situation where you need to design and build a once-off product that is not part of your normal line of business, the 3-month subscription can work, remembering that the software is unavailable once the period expires, although you will have your drawings, models or tests and simulations. However, you are always welcome to subscribe again.  Solidworks tries to offer the most flexible options to customers, so a hybrid solution with a mix of perpetual and subscription licenses on-site or in the cloud is perfectly viable. You may need help with managing this hybrid option, which is where OpenLM can help you keep costs and productivity optimized. Solidworks are really trying to reach the widest target market audience possible, and have created a new app suite that definitely steals a march on their competitors.

You are Never too Young for Solidworks

Well, that is not quite true, if you are under 4 years old, the following does not apply. Following on the successes gained by focusing on schools and universities, which is where the customers of the future come from, Solidworks has taken the Jesuit saying to heart

“Give me the child for the first seven years and I will give you the man.”

Although this saying is attributed to Loyola, and is probably apocryphal, it has elements of truth to it.

So Solidworks have launched a new product in beta called “Solidworks Apps for Kids”. According to Solidworks, this product is aimed for kids from 4 to 14, but can be accessed by kids of all ages. This is a great opportunity for children to get immersed in STEM learning as early as possible. The beta mode is free; it remains to be seen if it will be monetized at a later stage, but in the interim, why not introduce your kids to it, or even better, indulge the kid in yourself!

OpenLM releases version 4.4

OpenLM version 4.4 encompasses new features, minor interface changes and bug fixing for the previous identified issues.

Dashboard improvements

Visualisation and appearance

  • “User Idle Time” and “Recent App Idle” are shown in grey when agent is not online. A tooltip on shows Last Agent Heartbeat time.
  • License Type was added in Show/Hide Features window and refresh button.
  • Tooltip added on “Unknown” status in the Host Availability window.
  • Added “License Product” value to OpenLM License property.
  • Notification message appears in case of components with “not licensed” permissions
  • License servers with connection issues were not visible enough in License Servers Window, thus the server status icon size was increased.

Filter Adjustment and Correction

  • When clicking Save button existing filter settings were overwritten. Now the confirmation window appears before saving.
  • There was no warning about existence of a filter with the same name in Filter Management. Now the system issues a warning if filter with the same name already exists.
  • Workstation filter added in Currently Consumed Licenses.

OpenLM Server enhancements

  • Support Token Based Licensing required for “MSC”. Added Support Token Based Licensing.
  • Codemeter supports expiration dates and meaningful vendor names were set for codemeter.
  • “Recalculate License File” functionality added to “License Servers” widget.

OpenLM Agent enhancements

  • Added new switch “shut_when_products_are_inactive” for running Agent from command line. Old setting “Shut agent when products are inactive after x seconds” became deprecated and removed from UI.
  • Added ability to distinguish applications by command line switches. It’s also  applicable to Bentley SACS product.
  • Added support for Centralized products.xml. When Agent contacts Applications Manager the centralized product.xml includes all applications that were pushed and saved via Product’s list on local machine. In this version Agent can work in centralized mode or local mode.
  • New functionality was added allowing or denying users to edit Applications list in OpenLM Agent by setting up the corresponding flag during installation.

OpenLM Applications Manager enhancements

  • Added central configuration for Agent instances. Configuration on single Agent is shared to all other workstations if proper flag was set. Changes in Applications Manager UI are distributed among Agents if the same flag was set.
  • When adding more applications to monitor and there is license file restriction on that action, there is notification about it.
  • This version of Applications Manager was optimized to support triple the amount of load on the same hardware.

For more information about Version 4.4 please visit OpenLM webpage.

Flexnet Embedded Licenses – Small and Versatile

The paradigm of software licensing is shifting to meet the challenges of cloud computing, virtualization and the Internet of Things (IoT). From the vendor’s perspective, a new approach to monetizing software is needed. From the customer’s viewpoint, especially if they are in the scientific and engineering industries, they are becoming software vendors themselves as they need to manage connected and intelligent devices and embed software in these devices.

Embedded software licenses are not a new concept, but Flexera® has revisited the concept and produced a solution in system development kit (SDK) format with a very small footprint of approximately 50k. The vendor who purchases the solution can tailor the license to fit their particular offering to achieve a number of benefits for themselves and their licensees. The embedded licenses are part of Flexera®’s Software Monetization Suite, formerly called the FlexNet Producer Suite, which was originally launched about a decade ago. The embedded licenses are the mechanisms for managing the software and gathering licensing information. The other products in the suite are:-

  • FlexNet Operations. This is the process engine of the Monetization suite; it uses information gathered by the embedded licenses to manage entitlements and can be used to create new products by changing an existing configuration to a new one that meets the user’s expectations. It provides a 24/7 self-service portal for users. Flexnet Operations is what you use to perform operations on your embedded license population, such as issuing transfers, upgrades and temporary licenses.
  • FlexNet Delivery on Demand – delivers software electronically to the user who is entitled to use the software. This reduces the costs of fulfilment.
  • FlexNet Connect – a messenger service that delivers applications, updates and messages directly to users.
  • FlexNet Publisher – this is the Flexera® license management application, commonly known as FlexLM and the most widely-known product.

Installation of the suite enables the device manufacturer to manage the software that drives his devices, starting right at concept and design stage.

Efficiency in Product Design and Inventory

The modern marketplace is placing increasing demands on manufacturers in all industries to produce customer-centric designs and provide unique one-on-one experiences. This does not mean that you need to create a bespoke device for every customer, unless you are in a market that is prepared to pay for such items, like Bentley, Cartier or ABB. The new way of managing this is by using the software that is embedded in the device to produce permutations and new features. You then use license management to grant entitlement to some or all of the features that the customer needs. This results in a very lean inventory of physical devices, but a wide variety of virtual products, which obviously reduces costs, at the same time cutting down on time to go to market (and beat the competition).

The use of the embedded license also provides predictive analytics; at any time, you can gather information on which products and features are the most and least popular and use this intelligence to bring out new products and expand into new markets.

Accurate and Targeted Pricing

With the ability to monitor usage down to feature level per user, it is possible to develop a new approach to revenue income. It is also possible to provide fast turnaround when a customer needs a new product or feature, no delays waiting for account manager visits and changes to contracts. It is simply a matter of entitling the user(s) to use the feature or product they need. This is a batch change, not real-time, but is still considerably faster than the traditional sales cycle. Prepaid, pay-as-you-go and even post-paid options can be offered to customers.

Any Environment, from On-Site to Virtual

The embedded license can operate happily in most environments with many operating systems, from proprietary to open-source. Cloud, edge and virtual computing can all be managed, and apart from Microsoft and Apple operating systems, several of the leading Linux systems are supported. Mobile development is also supported.

A Special Benefit – Added Security

License Management software manufacturers are in the business of protecting intellectual capital and ensuring that is is not overused or used outside the terms of an agreement. To ensure compliance, they have developed protection against hacking and other attempts at illicit software use. The vulnerability of devices and the IoT is well-known, and embedding a license in a device will provide several layers of protection. Flexera® are proud of their security, and rightly so. They explain it as a “Three-Level Ring of Defense”, via resistance, obfuscation and detection.

  • Resistance. the software prevents reverse engineering of the application via decompilers, debuggers and other techniques used by hackers.
  • Obfuscation. The entry points to the application are disguised, making it difficult to follow the code logic. Key pointers such as data strings and variables as well as certain functions are hidden. All these actions make it difficult for the hacker to penetrate the application.
  • Detection. Flexnet Embedded can detect code changes in memory or on disk made by hackers. This can be integrated with FlexNet Connect to send an alert that there is an intrusion for immediate action.

The added protection given by the embedded license will help to address the vulnerability of the device in which it is embedded.

To Develop a new Competence or to Outsource?

There are many other benefits to be derived from using an embedded license, whether it is the Flexera® product as part of the Monetization Suite, or another competitor product, such as Safekey’s offering from Gemalto. The real challenge is in the management of software licenses as a software vendor. At OpenLM, most of our clientele are in engineering or research, and many of them are venturing into the IoT or selling intelligent devices in areas such as healthcare. Up to now they have been on the receiving end of license management, with products such as AutoCad and Ansys, which is why they purchased OpenLM. Becoming a software vendor places an added burden on the license administration, no matter how automated the software may be. Administrators are also not easy to find. This is why some companies are outsourcing at least the operational aspects of embedded licenses, while concentrating on the device design and manufacture aspects. We would be delighted to assist you with support, either on a long-term basis or via a co-sourcing arrangement that will involve skills transfer until your IT department are confident they can manage the licensing on their own. For further information, please contact us at https://www.openlm.com/contact-us/

The Ansys Licensing Landscape

Customers of Ansys, renowned for their computer-assisted engineering (CAE) software have always had the option of perpetual (Ansys term is “paid-up”) or subscription (“leased”) licenses for their products. Recent developments have resulted in a third license option, the “elastic license”. This license acknowledges two changes:-

  • the rise of cloud computing
  • a drive to make Ansys products accessible to as many users as possible, not just specialist engineers and scientists.

In light of the drive by some other vendors to move users to subscription licensing and discontinue perpetual licenses, Ansys has a refreshing and customer-centric approach to licensing. As the leading software company in CAE software used for finite element analysis (FEA), computational fluid dynamics (CFD) and other simulation applications, they are making their products easier to use and understand by non-specialists. This is analogous to the growing market in data discovery tools, where any user can analyse big data and produce business intelligence, without being a business analyst or a data scientist. Making Ansys products widely accessible will grow their user base at most organizations. Some companies have already taken this route, and their sales and marketing teams carry laptops with simulation demos loaded to show products to potential customers.

Flexible and Versatile Licensing

The Ansys licensing model supports their strategy; if you want the maximum number of users to need your software, you do not want them to be hampered by denials and license shortages. So licenses are made as accessible as possible for all scenarios, from on-site servers with a perpetual license pool to short-term users and cloud users. With very few restrictions, licenses can be used across platforms and during peak demand periods.

How does the Elastic License Work?

An elastic license is purchased an advance in units required, and when software is booked out it consumes a pre-defined number of units per hour. This provides a back-up of additional licenses when required, the only drawback being that the units expire at the end of the year, so the estimation of units required needs to be done carefully. Users of Autodesk Token-flex will be familiar with this license model, however there are some differences.

  • Elastic licenses are only used where there is no traditional license remaining to be used on the relevant license server, the traditional license are consumed first.
  • Because of the specific nature of simulation work, which requires business continuity, Ansys makes provision for the situation where the customer runs out of units during a simulation process. It is possible to sign up for a post-paid option to avoid a job being cancelled in midstream.
  • The license management of elastic licenses is customer-friendly and has reporting that helps optimize these licenses, such as departmental chargebacks.

Traditional on-site User Community

Existing customers would have one or more license servers set up on-site with a pool of concurrent licenses and possibly some subscription licenses for superusers. The main challenge of the license administrator is to have the maximum number of users who have access with the minimum number of licenses. This can be difficult to predict and is obviously dependent on the volume of work coming in. The Elastic License assists customers in the following cases:-

  • short-term peak demands that are beyond the capacity of the existing license pool, which has been optimised to cope with the normal workload.
  • where there is uncertainty as to which products are needed and how many licences are required, for instance, there may be a job requirement for Ansys Maxwell for electromagnetic field simulations and the company has no Maxwell licenses.
  • Where some short-term work needs to be done anywhere globally

Short-Term Use

It might be beneficial to use elastic licensing for short-term needs, such as a project at a remote site, where an annual license agreement would not be suitable. It could also be useful where one of the tools in the Ansys workbench is not used at present and more than a trial period is needed to decide whether the tool needs to be added to the company’s portfolio. Similarly, where a tool such as CFD is used very occasionally, it would be better to use elastic licensing for the times it is needed.

Working in the Cloud

Unlike most companies, who have a separate business model for cloud users, Ansys allows use of existing licenses to access the cloud. This applies to both concurrent and leased licenses. The only requirement is that the on-site server must be accessible via the company firewall to allow license access. There is an alternative where a license server is set up in the cloud. In this case, the licenses on that server are used exclusively in the cloud and no changes have to be made to the firewall. The Elastic license was designed for Cloud users, but the customer can use all three license models in whichever way best meets their individual needs.

How OpenLM can Assist

With the release of Ansys 18, the vendor has provided the customer with some useful reporting on license usage, such as denials and usage/cost attribution. It is not as comprehensive nor as customizable as OpenLM’s core offering, but is a refreshing change in the vendor/customer relationship, where it is acknowledged that the customer requires visibility on what is happening with their licenses, and the FlexLM logfile is interrogated o produce these reports.

However, most companies using Ansys products will also be using other software such as Autodesk, and OpenLM provides a single source to manage most or all of the tools used. In addition, OpenLM can manage Nvidia GPU licenses. While Nvidia provides a license manger, it has no reporting, which is why an OpenLM customer requested that OpenLM build the capability to manage Nvidia GPUs. It is highly unlikely that any company that runs simulations does not have a fleet of Nvidia GPUs to help in the number-crunching, so this is a handy addition to the extensive portfolio of software vendors managed. Feel free to contact us to help you with your specialized software license management.

Mastering the Hybrid License Environment

The rise of cloud computing and software-as-a-service (SaaS) has moved the goalposts when it comes to software license management, especially for organizations that have a large base of users accessing costly specialized software, like CAD, BIM and mathematical modelling tools. Traditionally, the most cost-effective way of managing such software was to acquire a perpetual license based on concurrent users, where there is a finite pool of licenses available, rather than a license per user. This licensing model treats each license as an asset and the associated costs are treated as capex and a balance sheet item. A cloud solution is based on some form of pay-per-use, and when the user accesses the software this is now an operating expense, which is an income statement item. This means that the complexity of license management causes pain in the CFO’s office as well as in the CIO’s domain. While this article focuses on hybrid license management as a license management issue, it is important to remember that there is an impact on the accounting principles and policy for software too.

Hybrid Licensing is not New

There has always been some mix in license management and administration, especially when it comes to specialized software used for scientific and engineering purposes, even for a single software product, such as AutoCAD. Although the majority of users would depend on concurrent user licenses accessed from a pool, there would always be some users who needed guaranteed access or worked with the software for most of their day. For such users, a named or dedicated license would be purchased. The license administrator would need to monitor these licenses separately from the license pool, checking on whether the named user actually needed a dedicated license or could revert back to the pool. The ability to reserve or borrow licenses from the pool could create a temporary dedicated license which again needed monitoring for when reserving the license was no longer justified.

There are also variations in concurrent licensing, such as token licensing, where actual usage is measured, usually on a time or product basis, and a “price” of a certain number of tokens is charged for such use. The annual number of tokens are purchased up front as part of the contract, and may require topping up during the year, or may have been overestimated.

Some vendors manage their licenses via hardware such as dongles or USB keys. This now means that additional oversight is needed to ensure that the physical licenses are not lost, as they can only be replaced by repurchasing the license.

Multinationals also experience different licensing rules, where licensing agreements are not global and differ from region to region, calling for extra vigilance that compliance is not breached in such situations. So license management has never been a simple job. Cloud licensing has just made it more complex. While some vendors offer both perpetual and cloud licensing options, others, such as Autodesk, are making it their mission to eradicate the perpetual license from their portfolio. This is forcing customers to consider their options, which range from straightforward acquiescence to the change and converting all their licenses, through remaining on the current version for the time being and not upgrading to moving to another competitor’s product. None of these decisions are easy, and there is no uniform in-house policy that can be adopted, as the forms of licenses available are under the control of the vendor, so different decisions need to be made for different software.

The New Flavors of Licensing

There are quite a few license models emerging, that recognise the flexibility that the customer requires while trying to maximize the profitability and sustainability for the vendor. Here are a few variants.

Token Licensing
We have already mentioned token licenses, where the user “pays” a number of tokens for a particular product, such as Autodesk Revit. The number of minutes used can also affect the price, as well as when the timeslot starts. This can result in unnecessary costs, as some customers of Autodesk have discovered.
Another token variant is based on the way the software is being used, for instance, the number of tokens needed is linked to the number of CPUs being used for processing by Abaqus, a Dassault product.

Bundled and WorkBench Licenses
This seems to be a growing trend; instead of licensing a single product, the contract covers a range of software from the vendor. It can be based on user skillset and needs, e.g. architect or civil engineer. This can work for some environments, but generally there are a few products that are not needed by the company, for which they have paid. This model can also be token-based, with a different token value for each product.

Remix Licenses
A variant on workbench licenses, where the customer can specify their software needs for the year, but have the option to change up to 25% of the agreement to cater for changing requirements. This pay-per-use model is usually for a multi-year agreement and acknowledges that the customer’s needs change based on business acquired and changing market conditions. It does make the swapping of shelfware for something more useful easier.

There will definitely be new models emerging in the next few years, as vendors try to maintain their revenues, which are predominantly derived from licensing.

Regaining Control of the Situation

As if the license administrator’s job were not complex enough, many organizations do not understand the implications of using the vendor’s license management tool and the overheads it imposes on the license management professionals. Vendors either use one of the commercial models available from license management specialists such as Flexera and Gemalto, or have their own proprietary license tool, as is provided by Dassault and Bentley. There are even some companies that do not provide any aid whatsoever, especially where software has been custom-written.

The license managers have to understand the license management product that each vendor provides and use each tool for managing allocations and access, as well as extracting business intelligence from each tool. This is a full-time job. Adding a new layer of complexity with cloud licenses just adds to the overload. This is why an independent license management application is so necessary; it gives the license manager a single lens to view and manage all or most of the licenses under his control. It also offers a second opinion on actual license utilization, which many companies have found vital in negotiating with vendors and debating the vendor’s metrics as opposed to what the independent software reveals. Finally, the independent product is written from the customer’s viewpoint, not the vendor’s viewpoint, and offers reporting and functionality that assists license management in license optimization and forecasting future license needs.

Customers of OpenLM have discovered the benefits of a license management application that reports objectively and extensively on their license usage via a single product instead of a tool per vendor. The benefits of an application that has a common look and feel for all reports on license usage are often overlooked, especially when it comes to reporting to executives outside the IT environment. Some of our users have mentioned the power of OpenLM heat maps for getting the message across to their executive.

Outsourcing the License Conundrum – License Management as a Service

The decision to outsource license management is a growing trend, and is embraced by CIOs who are finding it increasingly difficult to get the right people on board to manage the licenses, because demand exceeds supply. It also makes license optimization easier, as the outsource companies have extensive experience in monitoring licenses from the different vendors and know from experience what size license pool should work for a specified number of users. Companies that have outsourced their license management find that the costs of the service are balanced by the savings obtained by the fine-tuning of the license portfolio by the service provider. OpenLM offers managed services that are gaining in popularity because of the cost benefits derived by the customer.

The Ins and Outs of Autodesk Global Travel Rights

Autodesk grants global travel rights to organizations who either have a subscription agreement or a maintenance plan. These rights can be very beneficial to companies who undertake projects outside the country or region in which they are based, and can result in savings costs under the right circumstances. There is one very important condition that we must mention first, because it is not explicitly stated in most of the Autodesk literature about global travel rights; there is a time limit. Where the travel rights rule applies, users are only allowed to use the software for a maximum of 90 days outside their “home country”. So, for a long-term project it will be necessary to obtain another license once the 90 days has passed.

What Constitutes a Home Country?

The home country is the country in which the license was purchased. Where the contract was entered into for a named user, the home country applies to his or her residency. Where the contract is with an organization, as would be the case of a maintenance agreement, the home country is that where the company is incorporated. For organizations within the European Union (EU) or who have signed the European Free Trade Association Agreement (EFTA), home country is any country that falls under the EU or EFTA classification. For companies subject to Brexit, they must re-examine their policies regarding user travel rights, as their freedom to use Autodesk software across the EU will be curtailed.

Which License Agreements Provide Global Travel Rights?

There are three major categories of licenses that benefit from travel rights:-

  • perpetual agreements which are covered by a maintenance agreement
  • Traditional subscription licenses
  • Cloud subscription licenses.

There are differences in which users are entitled to use software while travelling based on which license agreement has been implemented. It is also important to note that support services for the products are available during the operating hours that apply to the home country, not the company where the user is working under the global agreement.

Which Users are Entitled to Global Travel Rights?

Where an organization has a perpetual license with a maintenance agreement, all employees qualify, as well as on-site contractors. The on-site contractor must be contracted directly by the organization. Where the organization has agreements with affiliate companies to carry out the work, the employees of the affiliates and any contractors employed by the affiliate are NOT entitled to global travel rights.

Where an organization has subscription licenses in place, the same rules apply, in that only employees and direct on-site contractors qualify. The subscription users must be named users, generic users and user groups do not qualify, although it is possible to negotiate terms with Autodesk for specific circumstances. The named user should be identified as such in the license agreement and cannot share his license with any other user. If the user has his own individual license which recognizes him as the named user, he can use his license globally.

Cloud licenses have a different set of rules, which give access to a wider set of users, but this must be confirmed with Autodesk by the organization. The cloud subscription travel rights can extend to employees and contractors of companies affiliated to the parent organization, which is definitely not the case for perpetual and traditional subscription licenses.

What to Watch out for from a Compliance Aspect

Where a company has purchased licenses in their home country, use of travel rights are quite straightforward. However, the license administrator needs to guard against the following circumstances:-

  • the licenses were purchased outside the home country, for example where a project is to be executed in a foreign company. Those licenses can only be used in that country, regardless of whether the employees using them are permanent employees or contractors.
  • the travel rights apply only to the entity that purchased the license. They cannot be extended to a parent or sister company or the employees or direct contractors of those entities.
  • The usage period extending past 90 days.

For our OpenLM customers, it may be advisable to build a customized report that monitors compliance for licenses that are being used under the Global Travel Rights terms and conditions. Early warning of usage periods getting close to expiry, as well as a list of users who are operating under the travel rights agreement will avoid non-compliant usage.

Another method of managing compliance would be to tailor license allocations to include and exclude users according to their qualifying or exclusion from the global travel terms and conditions. OpenLM has recently launched a new product for managing license allocations that is available to all Autodesk customers, whether they use the OpenLM core product or not. This parameterized application allows the license administrator to tailor allocations by time, region, user or user group as well as software used down to feature level within that software product. Users can be granted access or blocked depending on the organizational policy and the license agreements in force. Please contact us for more information.