The introduction of cloud software products not only disrupted the software market, but also the licensing and compliance management of such software. On-premise licensing was pretty cut and dried, with most organizations preferring concurrent or network licensing for most of their software purchases. Initially, the concept of subscription licenses for software accessed in the cloud, whether customers wanted it or not, seemed a simple concept of pay-per-use, which appeared to be cost-effective. The reality is quite different. For the last few years, research among small, medium and large organizations found that 30-35% of users were concerned about their steadily escalating cloud computing costs. There was a general belief that they were overspending on cloud storage and software, but very few companies were doing anything to actually measure and optimize these costs.
Why You Could be Overspending on Cloud Software
There are several reasons why cloud costs are not easy to control; here are some of the key contributors:-
- Overprovisioning. Where a company moves from on-premise to cloud services, the accurate estimation of the number of cloud licenses required can be quite complex; it’s not just a straight conversion of the number of concurrent and named licenses into the number of cloud licenses required. Furthermore, if you had not completely optimized your on-premise license use, chances are you had too many licenses before. The general tendency has been to acquire more cloud licenses than actually required.
- Pricing Complexity. What makes cloud computing so attractive for vendors, is that there are so many ways to price their offering. Per minute or per second usage, features used, time of day, or a cocktail of costs can be applied. Anything that can be measured can result in a charge, and the user has no visibility as to how they are incurring these costs; the vendor’s license manager will inform them what they owe, without any indication on how these costs could have been avoided.
- Cost of Compliance. There was a belief that using cloud services would reduce the risk of on-site audits. Unfortunately this does not seem to be the case; many vendors have increased their audits. Apart from the financial risk of non-compliance and the need to “true-up” (pay in the licensing shortfall), the cost overhead for an organization in human resources, custom report extracts and other administrative overheads can range from $100 000 to $500 000, depending on the size of the enterprise.
- Waste. Surprise, surprise, idle licenses do not go away when you switch to cloud, in fact, the situation may deteriorate. So license monitoring and harvesting is just as important as for on-premise licenses. Overprovisioning is also a contributor here, where the licenses acquired have a whole lot of features that are barely used, but affect the pricing. The user could make do with a basic or intermediate license rather than the top of the range option with all the bells and whistles. So all the toolsets you needed for monitoring on-premise licenses are still needed, but they must be able to monitor cloud usage.
OpenLM’s New Cloud Monitoring
Following numerous requests from our customers, as well as our own need to monitor our own cloud-based software (who does not use Adobe?), we have developed a cloud monitoring capability. It is limited to only a few vendors initially, but these are the most critical vendors among our customer base. Two are engineering vendors and two are enterprise vendors.
Monitoring Adobe and Microsoft Cloud 365
While most (although not all) of our customers are in engineering and scientific industries, we know the use of Adobe and Microsoft 365 is so pervasive, that the ability to monitor these vendors using OpenLM will be of benefit to them. Although our main focus is on specialized engineering software, we do understand the need to manage other software, and are gradually expanding our capabilities to manage non-engineering software.
Monitoring Autodesk and ESRI Cloud
Autodesk has been very determined in moving its historical customer base to subscription and cloud-based services. It has created many disgruntled customers, who have invested too much training and intellectual property into using Autodesk products to change vendors. SRI tried similar tactics, but there was too much push-back from their customers, so they backed down. However, they are still intending to move customers to the cloud and a subscription service; it will just take them longer.
Many of our customers are heavily invested in products from these two vendors, and need to be back in control of their licensing costs for their cloud portfolio. As many of them are also still using on-premise licenses as well, the added complexity of a hybrid licensing environment needs to be managed; spreadsheets do not suffice for the cloud software; as indicated above the issues encountered with on-premise licensing still cop up in cloud licensing.
A Brief Glimpse of the Capabilities
There is a lot more to cloud computing that we have not covered here. The growth of the Internet of Things (IoT) and edge computing requires that embedded licenses managing embedded software need to be monitored. Many IoT devices are offline most of the time, but still need attention. We have built capabilities to monitor embedded software, but we will discuss these features in a separate article.
Below are a few of the Screens/reports for monitoring cloud activity and usage. There are several more, such as the license server report, which helps you pick up cloud instances that need configuring into your license environment.
License Activity. This report is familiar to those of you who use our License Manager. It has extensive filtering options, so that you can examine activity for a specific project, vendor, license or even at a very granular level per user and per workstation.
License Usage Chart. This chart (which can also be displayed as a heatmap) shows license utilization for specific features for Flexnet embedded licenses per day for a specified period. Again, there are numerous filters you can apply to get the results you need.
Objectives of Our Cloud Features
We have designed reports to help you manage and optimize your cloud software licenses. You will be able to discover who is using the licenses, whether you have bought too many licenses and identify idle licenses. You may want to build additional limitations into license usage, like introducing an after-hours curfew for specific software (our support team can advise you on how to do this). Cloud license cost containment is a big topic because millions of dollars are being spent on unnecessary licenses. It is estimated that as much as 40% of cloud licensing cost is wasted. Being able to identify these costs in your own organization and remove or reduce them could have a substantial and beneficial impact on your bottom line. A recent survey found that nearly 60% of respondents acknowledged that they were overspending on cloud services, and only 15% were actually optimizing their cloud costs. We are sure you want to be one of the winners in cloud cost management and will be delighted to help you. Please contact firstname.lastname@example.org or email@example.com for any assistance or join our webinar with one of our sales engineers.