Measure what Matters — Software License Metrics

Software licensing requirements are in a constant state of flux as business needs and usage patterns change over time.

In recent years, this evolutionary process has received a number of large jolts, including changes to software marketing, the proliferation of artificial intelligence (AI) and the internet of things (IoT), and the current COVID-19 pandemic. Each of these is altering the ways in which licenses are sold, how businesses are managing existing licenses, as well as changing the requirements going forward.

Now more than ever, businesses can use OpenLM’s software license tracking tools to be sure they’re in compliance with the myriad applications they use. The software helps ensure they’re getting maximum value from their current spend, and that they aren’t risking audits and surprisingly large licensing bills.

SaaS Applications are Simplifying Software Licensing

SaaS, or software as a service, is the culmination of a long-running shift in the way the software industry markets and sells its product.

For the bulk of the industry’s early tenure, software was sold on an individual installation basis, delivery via physical media such as floppy disks, CD-ROMs, and later DVD-ROMs. 

As broadband internet moved from a niche service to ubiquity, software companies began making direct digital software downloads available, eliminating physical delivery. Later, subscription services were added to digital downloads, enabling users to receive automatic updates and bug fixes.

Software as a service takes the next logical leap in digital delivery — by eliminating delivery. Instead of purchasing a piece of software and downloading it to their computer, users are granted access to software running in the cloud. No download is necessary, removing the need for company IT departments to keep track of installations, updates, and other difficult software requirements.

As a result, these cloud-based services are simplifying licensing and compliance requirements. Organizations no longer need to worry about whether their physical installations match available licenses because there are no installations.

SaaS companies license their products on a subscription basis. The most common structure charges a specific fee per user per month. Because the software runs in the cloud, users can access their software on any computer their company has authorized them to use.

While this varies between companies, subscription models generally charge customers ongoingly instead of requiring a single upfront purchase fee. This means that licenses have the potential to be changed, upgraded, and downgraded as a business’s needs shift. This also allows SaaS companies to create tailored licenses that restrict specific functionality based on the user’s investment. Alternatively, licenses can vary per month based on actual usage.

The Internet of Things Is Complicating Software Licensing

Concurrent with SaaS simplifying the software licensing landscape the industry is grappling with several new complications introduced by the internet of things.

This long-touted technology is finally making inroads into the business world. Networks are becoming host to myriad smart devices, smart sensors, and smart machinery. Businesses are rolling out mesh networks that feature passive data collection and enable connected business processes across their organization.

These technologies are challenging several notions found in standard licensing agreements. For one, it’s becoming harder to define what a user is. When networked smart machinery accesses a piece of automation software, is the user the machine or the company? What happens when a factory adds third-party smart components to a previously licensed machining system? Is each component a separate “user”?

The IoT also dramatically increases the number and definition of devices that run software. Copy machines are now software platforms. So too are alarm sensors, smart components, mesh network repeaters, and the full complement of smart products.

Increasingly it’s unclear how fees should be assessed in these situations. If each sensor and device in a mesh network is a user, should a fee be assessed per interaction, or is a quantity-limited subscription model a more practical solution? 

In most cases, the industry is favoring some form of subscription-based licensing, but as the industry grows, and as new uses for the technology are discovered, it’s likely that these models will need to be revisited.

Artificial Intelligence Is Testing the Promises License Agreements Can Make

AI introduces further wrinkles into the software licensing landscape. The difficulty revolves around the technology provider’s ability to promise specific results.

Generally, software output is predictable. When you add text to a document, you create a text document. When you use a spreadsheet to solve a problem, you can be certain that the process will follow specific, predictable rules.

AI, by comparison, is unpredictable by nature. While we can be reasonably sure that the system will improve over time, it isn’t guaranteed. Nor can users foresee the way that AI will perform. Starting with the same initial conditions, AIs can, and often will, generate novel behaviors that vary between iterations.

As a result, AI software vendors have to use very specific language in order to properly define user expectations. When licensing AI services, vendors must distinguish payment for the service as a separate element from potential results.

This is uncharted territory for the software industry, and it’s certain that licensing practices will necessarily adapt over time.

COVID-19 Created Unique Licensing Agreements

Companies are finding it necessary to radically alter the software packages they’re using to conduct business. Massive shifts toward remote work have required significant new installs for video conferencing, collaborative applications, and other novel software packages.

Many software providers rose to the occasion, offering free licenses, delayed audits, and other cost-saving measures. However, structuring these unique licensing agreements presented a variety of challenges. 

These vendors aren’t charities after all, and they’re not in the business of giving away software for free, so oftentimes the licenses had to be written with significant restrictions, time-delayed payments, and other licensing oddities to protect the manufacturers from uncontrolled loses.

As a result, businesses must be hypervigilant when reading license agreements for “free” software to be certain there aren’t “gotchas” hidden in the language.

All of These New Complications Increase a Business’s Exposure to Liability

While SaaS is simplifying license tracking requirements, the industry as a whole is becoming more inscrutable. Businesses are finding themselves facing confusing and potentially damaging license agreements that place a greater onus on them to keep tabs on usage.

Even small businesses are finding themselves underwater with their software asset management (SAM) practices, and larger companies are finding it necessary to devote ever-increasing resources to making certain that licenses are being used properly, and that money isn’t being wasted on unnecessary seats.

OpenLM is now more critical than ever before. Our software solutions take the guesswork out of license management. Users gain significant insight into their current license usage. The software helps IT departments efficiently allocate licenses throughout their organization, make informed decisions about license maintenance and procurement, and avoid antithetical behaviors like license hoarding. 

With robust tracking and reporting features, OpenLM helps businesses avoid costly software audits and focuses their software spending. Software licensing is a minefield for businesses. OpenLM gives them the tools they need to protect themselves in this ever-changing field.

Would you like to see what OpenLM can do to help control your costs and exposure? Visit us for a 30 day free trial of OpenLM with full features.

RLM (Reprise License Manager) implementation of License Server Redundancy

Reprise license manager was developed by the original team of FLEXlm. In RLM the implementation of redundancy is not the same as in FLEXlm – triad. The failover server will start in case the main is stopped.

Watch another video provided by Oren Gabay, OpenLM CEO. Subscribe to OpenLM Youtube Channel for more videos about engineering software license management.

FLEXnet Publisher implementation of license server redundancy

FLEXlm triad allows users to implement redundant license servers configuration. Triad is based on three license servers that compose a quorum. One server is always the master, the two other backup it. If two fail the whole triad fails.

Watch another video provided by Oren Gabay, OpenLM CEO. Subscribe to OpenLM Youtube Channel for more videos about engineering software license management.

License server redundancy

Companies that are using licensed applications might suffer of a loss of many expensive work hours due to downtime of a license server. The solution in such case is License Server Redundancy as implemented by Licensing Vendors. In this high level review, Oren Gabay, OpenLM CEO, is explaining the concept of license server redundancy and license server vendors implementations.

Subscribe to OpenLM Youtube Channel for more videos about engineering software license management.

License Server allocation in engineering applications (FLEXlm)

Allocating license server to users in FLEXlm (flexnet publisher) is done by local settings on the end users machine. There are different implementations, depending on the vendor preferences. It might be set in registry, file or environment variable and typically can be controlled by the user, which is a problem.
Such implementation do not allow the administrator to change the setting in response to event (server down, department is off). It also allows the user to temper with the settings and cause compliance and license shortage.

Watch another video from Oren Gabay, OpenLM CEO. Subscribe to OpenLM Youtube Channel for more videos about engineering software license management.

Autodesk token-flex licensing – Time Zone Aspect

Autodesk token-flex licensing has a strong time zone aspect since it analyses the data using the time zone of the license server. Locating the license server in the wrong time zone might create a situation where users are charged twice in a working day.

Watch the third video from a series of videos about Autodesk token-flex licensing provided by Oren Gabay, OpenLM CEO. Subscribe to OpenLM Youtube Channel for more videos about engineering software license management.

Best strategies for optimizing IT expenses as you take your business to the cloud

Organizations are getting leaner day by day. The cloud is replacing on-premise software applications in several industries at a rapid pace. As organizations leverage the cloud infrastructure, they see a reduction in the cost and an increase in organizational flexibility. When they are on the cloud, businesses become more agile – as data can be accessed across geographies and through multiple mobile devices.

The cloud, however, comes with its own set of challenges. Applications on the cloud require added monitoring. A multi-cloud environment often requires real-time analysis. This implies that IT managers need a tool that provides global visibility into cloud usage to properly monitor the company’s cloud activities and spend.

Cloud service providers generally offer a variety of plans that offer different levels of discounting against different time commitments (lock-in periods), ranging between 1-5 years. These options include enterprise agreements, reserved instances and savings plans. However, most cloud customers are charged for the resources they order, irrespective of them using the features or not.

The IT manager can employ some effective strategies for optimizing IT expenses:

1. Locate Unused or Unattached Resources

Unused or unattached resources are low hanging fruits for the IT manager to locate and discard. More often than not, an administrator may forget to remove storage attached to processes they terminate. A developer may make a temporary server to perform a task, and then forget to turn it off when his work is completed. In both the instances the organization’s cloud bill will include the charges for the resources, irrespective of the fact that they are no longer used. In order to optimize cloud cost, it is thus necessary to start by locating unused and completely unattached resources.

2. Identify and Consolidate Idle Resources

Companies are billed for 100% of the computing capacity on the cloud, and hence, CPU utilization of 1-3% during an idle session, is a significant waste. An effective strategy would be to identify such occurrences and consolidate the processes so that idle sessions are minimized. Cloud offers autoscaling, load balancing, and on-demand capabilities that allows the organization to increase/ decrease the computing power any time they need to.

3. Derive the ‘Right Size’ for the computing services

Right sizing implies that computing services have been modified to their most efficient structure by modifying them as needed. IT managers have the option of choosing between different server sizes. They can also have the servers optimized for memory, database, computing, graphics, storage capacity, throughput, and more. Right Sizing helps the organizations make the best possible use of the resources they are paying for.

4. Follow and utilize Heatmaps

A heat map is an essential tool for optimizing cloud cost. This visual tool shows the peaks and the troughs and this data is crucial for establishing the start/ stop times of applications. For instance, an analysis of heat maps can indicate whether development servers can be safely shut down on holidays. While this could be done manually, a better option is to leverage automation to schedule instances to start and stop, optimizing costs.

5. Get the appropriate type and level of discounts

Once the above mentioned steps have been covered, the IT manager would have a clear picture of the cloud costs that the organization would incur. In the next step, he can determine the correct form of implementation he may need and start negotiations with the vendors. To have a granular control over the expenses, he may want  to go ahead with a plan which lets the organization pay for the exact usage till he has an understanding of the costs.

Enterprise discounts are locked in for a period of time and thus offer lesser flexibility. The Microsoft EA or AWS EDP programs are examples of such arrangements. Alternatively, there are standard discount options, like the reserved instances or savings plans, which can be purchased at any time.

6. Monitor software licenses

Software license costs for some applications apportion for a sizeable share of the cloud cost. To cite an example, if the organization brings Microsoft Windows or SQL Server licenses to the Azure cloud, it can realize significant savings on the cloud bill through the Azure Hybrid Benefit.

Some applications, on the other hand, may have restrictions while they are running on non – native clouds, like Oracle database licenses.

To conclude, the increase in cloud usage requires us to concentrate on being prudent and focused. Tools provided by OpenLM monitors software usage in cloud, on-premise, and hybrid environments. Detailed reporting facilities in OpenLM offer valuable insights which help during optimization exercises.

Would you want to optimize your cloud expenses by monitoring your software licenses? Visit us for a 30 day free trial of OpenLM with full features.