Software Asset Management: changes in licensing subsequent software versions


Software Asset Management: changes in licensing subsequent software versions

January 2019

A large number of products, complicated licensing terms and conditions and a multitude of licensing metrics are one of the main reasons for inconsistencies identified during software licensing reviews

Such conclusion arises from the analysis of findings of a survey conducted during SAM Academy (Software Asset Management), held on a cyclical basis by the Software Asset Management Team at Deloitte. The October workshop was attended by the representatives of 27 largest organizations operating in various sectors on the Polish market, i.e. financial, energy, telecommunications and public.

Each of the software producers defines its own licensing rules and relates them to technology available on the market. Therefore, in the event of virtualization, there might be a case where every producer will apply a different calculation method to the same configuration of virtual environment. Thus, it is essential to get acquainted with the licensing terms and conditions as it will limit the incompliance risk. Moreover, the same product may be licensed in more than one way, e.g. per an authorized user or per core, processor or processor value unit. Changes in licensing models observable throughout the years may come as an additional hindrance. Certain licensing measures evolve into newer ones (e.g. a processor into a core or a processor value unit), new packs including several products with different licensing metrics are being created (IBM FlexPoints) or a product is no longer sold under the existing licensing metrics, so if we want to continue supporting it, it is necessary to apply relevant conversion units.

In order to ensure compliance with the terms and conditions of a contract, employees in charge of licence management apart from controlling the installed software should also consider the licensing model purchased and follow limitations (for instance regarding the number of devices) under a given license. 

Software Asset Management

Changes in licensing subsequent software versions

Of course, there are more licensing challenges. Without relevant control, changes in the licensing of subsequent versions of the same product can lead to significant licensing incompliance. Below are examples of changes in licensing of different producers, which may appear following software update to the latest version, impacting the licensing balance:


1. Introducing a new edition of the program and including extensions in the licensing package

Owing to the introduction of a new edition of the MQ software by IBM, previously separate components designed to protect sensitive data (MQ Advanced Message Security), connect all devices to the Internet (MQ Telemetry Service) and transfer files between systems (MQ Managed File Transfer Service) have been made available in the MQ Advanced program. Being unaware of the licensing terms and conditions applicable to the new software version may lead to the installation of components from a new, more expensive edition.


2. Excluding some of the software components while defining the required number of licenses

The latest license documents of the IBM Planning Analytics Local TM1 Server program include a provision that while determining the number of entitlements required for installation or program use by the licensee, the installation or use of TM1 Server component only is considered.  Additionally, there were no limitations as regards the configuration of servers on which the supporting products (e.g. Planning Analytics Workspace Cognos Analytics Administrator) may be installed (refers also to the PVU limit). No such provisions were included in license documents for older versions, thus it was necessary to include all the software components while defining the required number of licenses. In specific situations (e.g. during the installation of individual software components on different servers) the said provision may reduce the number of the required licenses.


3. A different approach to servers operating in the standby mode

We can see based on the evolution of the IBM Informix Enterprise Edition software that the introduction of the latest software version entails much more than just a change of the product name. Alterations have been made to licensing limitations referring in particular to servers operating in the standby mode. Within previous versions, if a product was licensed per processor for servers operating in the stanby mode, a license per processor was required. Next versions required a license for 100 PVU per server, regardless of the processor configuration. In the case of the latest versions, additional licenses for servers in the stanby mode are not required.


4. Replacing two older editions with a newest one.

Another example of changes refers to Oracle data bases. By introducing Standard Edition 2 Oracle has replaced two older editions, i.e. Oracle Standard Edition and Oracle Standard Edition 1, with a newest one. The most noticeable difference is the change in the possibility to install data bases on devices with a maximum of two processor sockets. Also, the minimum number of the required NUP (Named Per User) licenses has changed, with an uplift from 5 NUP to 10 NUP per server. In this case making the update in specific situations may be connected with higher licensing costs.


5. Licensing model change

The licensing terms of Windows Server 2016 for the Standard edition and Datacenter have changed. Unlike the previous licensing model, which was based on processors, the new one is based on the physical processor cores. Licenses are sold in packs of two and each processor needs to be licensed with eight cores. Therefore, in the case of processors with a minimum of eight cores the licensing costs are the same as in edition 2012 R2. Whereas in the case of processors with more than eight cores, additional licensing packs are required, which consequently leads to a rise in the licensing costs.


6. Introduction of a simplified licensing metrics

Micro Focus has introduced a dedicated licensing metrics for the ArcSight Enterprise Security Manager software, i.e. Events per Second (EPS). Under previous editions products could be licensed per physical processor core, user, GB per day or device. Lately, Micro Focus has substantially changed its approach and made the licensing cost dependant on the average use, which may have a material impact on the licensing costs.

We have presented just a few licensing scenarios for various versions of the same product. As we can see, in order to avoid licensing inconsistencies it is crucial to analyze licensing documents and keep track of changes being introduced. This also allows to avoid the purchase of products inadequate for the needs of the organization. It is quite common that due to a multitude of licensing models and various software versions available on the market, companies tend to purchase licenses they never use.

There are many licensing-related challenges, yet suitable solutions also exist and when properly adjusted, can support software control. Nowadays the market offers SAM (Software Asset Management) tools that facilitate the process of managing software licensing through its inventory, a register of licensing agreements, a register of licensing agreements, creating reports and calculating licensing requirements. Another solution is the outsourcing of SAM services or one-off licensing consistency reviews inside an organization. There are plenty of possibilities to manage software and a proactive approach is a must. Continuous licensing compliance and cost optimization make additional advantages in favour of this type of solution.

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