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Getting a clear understanding of what software your organisation is using, let alone whether it’s adequately and efficiently licensed, is never an easy task

For plenty of organisations, the task of software management is daunting: for some it can be a nightmare of truly labyrinthine proportions. As IT estates have become more complex and distributed, so most companies have acquired a variety of systems and applications, often procured on an ad-hoc, departmental basis with little or
no regard to the organisation’s overall software management efficiency. But what is the precise nature of the challenges businesses face, and what can be done to tackle them effectively?

Essentially, the problems surrounding software management all stem from complexity – both that of vendors’ licensing arrangements and of organisations’ own IT estates. This complexity in turn leads to significant cost and compliance challenges. But before you can formulate an effective strategy to deal with these issues, you need to understand precisely what you’re up against.

COMPLEX LICENSING

The first challenge is the complexity of vendors’ licensing schemes. This situation has long been a cause of consternation among business IT leaders, who want transparency and simplicity when it comes to their licensing arrangements. Unfortunately, for most organisations this still seems a long way off.

Tina Fruhauf, Computacenter’s software licensing manager, says: “Software licensing is a bit of a smoke-and-mirrors art. The complexity comes from the fact that the vendors have various licensing programmes and rules. They all have different methods for licensing – by server, by device, by user, by concurrent user, floating licences, et cetera. Indeed, the complexity doesn’t end there because most vendors typically have three or four different routes to market depending on who the end user is and what they are trying to buy.”

Without a good understanding of these different licensing models, and how they apply to your organisation’s installed base of software, you are almost certainly missing out on potential cost savings. Fruhauf continues: “The key is understanding the ins and out of all your different vendors’ licensing programmes and mechanisms – what upgrade paths you may potentially have that you didn’t know about, and what products have changed names, been discontinued or are bundled in with something you’ve already purchased. For instance, you might not be aware that you can upgrade from a previous version to the latest version of a product at a reduced cost, so you might go out and buy the full product again.”

Another problem is that of product over-specification. It is common for companies to purchase too many copies of an application, or more sophisticated products than they actually need. For example, organisations may buy the full, professional version of a product when all they actually need is a reader or ‘lite’ version. So you need to look at not just what you’re buying, but how you’re buying.

Where a range of products have been bought from different vendors at different times, it can also be very difficult to keep track of renewals. This makes advance budgetary planning very difficult. Organisations find themselves chasing their tails, paying renewal invoices on a purely reactive basis as and when they receive them. In addition, they are often unable to know whether the number of base licences they own matches the number of support contracts for which they are paying.

RAMBLING ESTATE

Then there’s the complexity of your own IT estate. Unless you have good software audit and management processes in place, not only will the task of ensuring all the systems in your organisation remain fully updated and patched be next to impossible, but you may also simply be unaware of precisely what’s installed. Fruhauf says: “If you don’t know what you’ve got, then how do you know what you need to buy? Lots of organisations have over-licensed and spent money unnecessarily.”

As well as working to streamline your software asset management processes, at a higher level it may also make sense to examine the efficiency of your overall architecture, which can have a significant impact on the cost and complexity of software management.

Many of these problems are generic and affect all shapes and sizes of organisation. But Fruhauf notes that large and small organisations also face their own specific software management challenges. “Smaller organisations tend not to understand what their options are. They don’t usually have appropriate in-house technical expertise and require more understanding of what they need, as well as help with optimising their procurement process,” she says.

Larger organisations, on the other hand, tend to face slightly different problems. “Typically, we find that complexity goes up the bigger an organisation gets,” adds Fruhauf. “Larger ones usually have more understanding of where they want to be technology-wise, but they have a bigger problem getting there because of the size of estate that needs to be dragged forward. They often have so many people with purchasing power and the right to install software that they find it very difficult to gain any overall control. For example, they might be made up of a number of affiliate organisations but have not managed or even attempted to leverage that affiliate buying power.”

FLOUTING THE LAW

The other critical issue for all organisations is compliance. Without an effective software management strategy, if challenged over compliance your organisation could face not only a significant cost hit, but also the prospect of serious damage to your reputation. Fruhauf says: “Compliance is a huge issue, both from a cost point of view and also from the perspective of how you are seen by your customers and competitors. If you’re known to be an organisation that flouts the law, who would want to buy from you? It lowers your integrity within the marketplace and that can have a real impact.”

And while few organisations deliberately flout the law, Fruhauf says none can truly claim to be 100 per cent compliant. “They simply don’t exist and if organisations claim they are fully compliant, then they probably haven’t gone through all the hoops and hurdles necessary to be able to say that,” she says.

Indeed, a survey of 100 CIOs conducted by Computacenter in November 2006 found that almost half (47 per cent) believed compliance was the hardest element of software to understand and manage effectively.
While vendor-led organisations like the Business Software Alliance (BSA) and the Federation Against Software Theft (FAST) have faced criticism from business users in the past for taking too draconian a line when it comes to compliance, Fruhauf says that today most vendors take a fairly softly-softly approach, perhaps approaching companies with a ‘compliance questionnaire’ in the first instance to check for anomalies that might warrant their being audited.

“Most vendors don’t want to be seen as going in all guns blazing to audit a customer. It doesn’t put them in a very good light. Generally they’ll work with businesses to reach a position that suits both parties,” she says. “If you look at it simply, then if a piece of software is installed you should have a licence for it, irrespective of whether or not you’re actually using it. However, if you can prove that you haven’t used it, and are prepared to remove it, then through negotiation you might be able to reduce the number of licences you are required to buy in order to be deemed compliant,” says Fruhauf.

But you shouldn’t mistake a willingness to negotiate with the willingness to turn a blind eye to matters of compliance, she adds. “It wouldn’t be right to say vendors are getting more aggressive, but they are certainly getting cleverer. As the tools to manage software licences become more widely available and easier to use, the excuses for not managing the compliance issue are going down,” she says.

Mergers and acquisitions can also add to your software complexity, cost and compliance woes if you don’t consider the software implications at an early enough stage. But the reverse is also true: get it right and you can make significant savings (see box).

NEGOTIATING POWER

So what can organisations do to mitigate the potential problems of complexity, cost and compliance? One way is to partner with a third-party organisation like Computacenter that can offer a variety of software auditing and asset management services, as well as the ability to leverage its strong relationships and negotiating power with the major vendors.

There’s also plenty a business can do on its own account. Fruhauf says: “First of all, organisations need to understand that compliance is their responsibility. That means keeping good records and making sure knowledge is transferred. For example, we often find that when someone leaves an organisation, they take with them all the knowledge about particular licensing arrangements. You need policies and procedures in place that ensure there is clear understanding of where in the organisation this information sits and how it can be accessed.”

She adds that organisations also need to get a handle on what software they actually use. “A lot of companies don’t even know how many vendors they liaise with. For example, if a company tells us they deal with 50 vendors, it’s not unusual for us to look at their procurement records and find they actually deal with 200. This situation usually arises because of ad-hoc departmental software purchases from smaller vendors – made on company credit cards, for instance. So putting in place a clear procurement mechanism is something else organisations can do to help themselves,” she says.

But of course, if you’re already in a mess then you’ll have to draw a line in the sand first. Fruhauf says: “There will always be a slight pain point when it comes to saying this is where you’re at. Organisations need to engage with someone who understands what they need to look for and can start going through all of the relevant information – getting records from vendors, internal procurement data, from your resellers – and cross-referencing the various data to come up with a pretty good picture of what you’re entitled to use.”

MOVING AHEAD

Fruhauf adds that understanding what you’ve got is only half of the challenge. The other half is about knowing the direction in which your organisation is moving. Here, audit tools can be a real help. “Either internally, or through a trusted partner, you should have access to an audit tool in order to be able to check not only what you have installed, but also to meter its use. Then, if you find something’s installed but has not been used for, say, 18 months, then you probably need to ask if you really need it. Further to that, you must also ensure you have a policy of actually revoking those licences if they’re not needed and reharvesting them where you can,” she says.

Finally, organisations serious about sorting out their software management should not underestimate the time and resources needed to meet the challenge effectively. For example, in a large organisation it can take a dedicated person up to six months just to discover what licences they should have bought.

And while the challenges may remain no less daunting, with the right attitude, commitment, tools and the help of an experienced, skilled partner, you can successfully minimise complexity, maximise your savings and make sure you’re compliant.