Diffusing the software license virtualisation time bomb

ITAM News & Analysis

Diffusing the software license virtualisation time bomb

License management company License Dashboard is warning companies of the risks it says exist when working with software licensing under virtualised environments, in particular with dynamic provisioning or VMware’s ‘Distributed Resources Scheduler’ (DRS).

The firm says that while the majority of its customers say that they have virtualized their servers, 58% of those that have are using DRS-type technologies on “some or all” of these virtual servers. This suggests (so says License Dashboard) that organisations “may have” a significant shortfall in their software licensing compliance.

The forward argument here then is that if this “may have” factor does result in a significant compliance shortfall that firms will be particularly vulnerable in a software audit.

The firm contents that most companies are unaware of the licensing implications of the dynamic provisioning of resources in virtualised environments (DRS), which can increase licensing requirements by 500%.

License Dashboard goes further and wants to suggest (from survey results in its own straw poll) that 87% of firms claim virtualisation is factored into their software asset management (SAM) strategy, yet only 42% use a dedicated licensing solution for the task (19% don’t do anything and 39% use an IT asset management (ITAM) or procurement system to track licenses.

NOTE: the “problem” identified here is the suggestion that a traditional ITAM system is often too simplistic in its licensing analysis to factor in the implications of virtualised environments.

“Under virtualisation, organisations can operate many instances of a software program on a single physical machine. With the traditional device-centric software licenses that are the mainstay of most organisations today, such as Microsoft Office and Windows licenses, the organisation is required to license each virtual machine separately,” said Matt Fisher, director at License Dashboard.

Virtualisation licensing, a grey area

Fisher points out that many vendors, including Microsoft, have added user-centric elements to their licensing terms, since the license remains at its core a device one, but that still … licensing under virtualisation remains a grey area. As a result, licensing each virtual machine separately is often the safest approach to avoid the risk by being non-compliant.

“The issue becomes much more complicated once technologies such as VMware’s Distributed Resources Scheduler (DRS) are factored in. DRS, which dynamically allocates IT resources to the highest priority applications, has proved popular for the significant operational efficiencies it brings (67% of our customers use it). However, DRS can also lead to a significant shortfall in an organisation’s licensing compliance, since an application has the potential to be used on every virtual machine if the need arises,” said Fisher.

“With current device-centric licenses this will often require the organisation to license every application on every virtual machine based on the potential that the application could run on it during peak times, unless significant rules are put in place governing the use and deployment of licenses in virtual environments. Based on our own analysis of customer’s virtualised environments, DRS has the potential to increase an organisation’s server licensing requirements by up to 500% at the flick of a switch,” he added.

This is not only a significant additional licensing cost for the organisation to bear, but if left unchecked, exposes the organisation to a hefty fine for non-compliance when it is next audited. With two thirds of our customers saying they were audited last year and recent IDC research showing that Microsoft is currently the most prolific auditor, this is a very real risk indeed that every organisation running a virtualised IT estate should be aware of.

“DRS has the potential to be a ticking time bomb for many organisations, so we urge them to review how their software is deployed in virtualised environments or risk facing significant fines in 2013,” concludes Fisher.

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