Gartner says license costs can be reduced by 30%. Great, but where does the 30% come from?
The answer to this question is license management.
In order for this to happen two worlds have to be combined. The software world of bits and bytes, that makes up the license demand, and the procurement world that’s supposed to satisfy this demand through contracts and license purchases.
At Aspera we have created the A-Model to demonstrate how the millions upon millions of individual pieces of information in these two worlds are brought together, so that you can answer the 30% question.
The A-Model is broken down into 7 steps:
- Software Data and Procurement Data
- Products and Product Use Rights
- Demand and Entitlements
- Compliance Position
- Financial Position
- Aggregate Position
- Software License Management
Each step has to be completed before one can move up to the next. If the bottom steps are filled with junk data, then everything above it will be useless. The A-Model explains how technology forms the backbone of software license management. I highlight technology because in order for license management to work there must be functioning processes and policies in place in addition to the tool. The A-Model is a breakdown of just the technology and what stands behind it.
Software is everywhere. On PCs, notebooks, thin clients, and servers existing on virtual, physical, mobile and cloud based platforms. For each platform you have, you use management tools to install, configure, and monitor the software. Your software inventory is made up of the input from all of these data sources. It doesn’t matter which tool you use – the license management tool needs to connect to all relevant systems that have to do with discovery, deployment, and configuration management. The raw data has to be collected, consolidated, and merged into a uniform inventory and uploaded into the license management system. This is the first part of the bottom step: collecting the raw data.
Once you’ve integrated all the necessary systems with license management you move up the left leg of the A to Products. The most fundamental technology in your license management tool is the software recognition capability. This will make or break the A-Model. Registry entries, files, processes, application groups, and packets leave behind millions of fingerprints. To be able to identify from all these records the actual software product that needs to be licensed takes a lot of knowledge, a well developed tool, time, and experience.
In order to make use of all the rights that come with the license and optimize your investment the correct product must be identified. This is why the quality of your tool’s software recognition technology is paramount. Software recognition is only successful if it is based on a good product catalog. Signatures and synonyms for the same software differ from inventory tool to inventory tool. And bundle and suite products only make things more complicated. Only years of experience and data collecting can get you a good catalog.
Software recognition enriches the raw data that comes from your inventory systems: Installation traces are turned into definable, licensable products from the catalog. In addition, all redundant data (for example hotfixes, security patches, operating system components, drivers, etc.) are filtered out and product components are combined into suites. The resulting software inventory is the groundwork for calculating the actual license demand.
Once the raw inventory data goes through the software recognition process, you have reliable data and the licensable products are recognized and sorted in the software inventory. With this we find ourselves on the third step on the software side. Now, the tool needs to calculate the actual license requirement for each installation. In other words the tool answers the question: How many licenses do I need to cover the software I’m using?
UPU, PVU, Floating, Core, User – the imagination of software publishers is limitless when it comes to creating new price models for software. The fight for market share and new trends like multi-core CPUs and virtualization force publishers to permanently adjust their license metrics. (I guess it’s just bad luck that they also keep getting more complicated instead of simpler.)
You need more than technology that counts software installations and licenses. You need technology that can add, subtract, multiply, and divide while taking all licensing terms into consideration. And not only in your desktop environment, where license metrics are still pretty manageable, but also in your server environment, where the greatest saving potential is known to hide.
At Aspera this part of the technology comes with the product catalog. We have license experts whose job is to make sure that the algorithms for complex metrics always utilize the latest publisher and product specific calculation rules that are defined by the license model. The algorithms are embedded in product catalog. When the licensable product is recognized after software recognition, the tool automatically knows how to calculate license demand.
Speaking of rules and licenses, we’re ready to build up the right side of the A-Model: Procurement Data.
Licenses always find a way into your company: through contracts, purchase orders, maintenance payments, true ups, invoices. Purchasing through resellers or directly through the publisher, centrally or globally, via email, credit card, or SRM system. And the list goes on.
But every license that doesn’t find its way into license management and whose product use rights are not correctly identified damages efficient planning and ultimately destroys value.
Just like the foundation on the left side consists of connecting all systems and databases collecting information about installed software, the right-side foundation also relies on standardized interfaces to procurement systems. All procurement information needs to be combined.
With the procurement systems integrated you’ve come to the second step on the right: Product Use Rights.
Product Use Rights
Free text orders and verbal agreements—these items land in your inbound license box. In the jungle of such data, which come from the most diverse procurement processes, license management has to find the purchase article. Here the law of the land is the manufacturer article (a.k.a. SKU) is the only clear indicator of a license.
License experts analyze contracts and EULAs to maintain the catalog, where basic products, as well as bundles, suites, server software, and upgrades are covered. When the raw procurement data is uploaded to the license management tool, it automatically identifies the purchased article using the catalog as a reference and analyzes the product use rights.
Product use rights are the key element required to compare the procurement data to the demand. And with that, we’ve now reached the third step on the right: Entitlements.
First-time purchases, upgrades, maintenance, canceled support, reinstatement, transfer to another legal entity, manufacturer bought out, product renamed and newly bundled. What exactly are you allowed to install? What are you “entitled” to?
This is where your license management technology should help you assign upgrade and maintenance licenses to base licenses and allow for redistribution within the company and the separate treatment of license ownership and product use rights. Maintenance dates should be managed to record that the latest valid version and when products are due to expire.
In order to maintain your entitlements you need a constant overview of how many product use rights you have for each product you own, where the product can legally be installed, and what lifecycle stages have occurred or are approaching. This is where your license management tool should help you assign the right maintenance or upgrade and efficiently distribute licenses in your company.
When the demand for licenses is known and put together with the licenses, the procurement data can finally be compared to the installation data, which means we’ve arrived at the fourth step: Compliance Position.
The art of license management is found on both sides of the compliance equation (or both legs of the A-Model) so that CPU-usage-apples can be compared to named-user-license-oranges.
What’s more, all external parameters for the compliance check have to be known in order to capitalize on all that you’re entitled to: Is the compliance check for internal control where all cost centers are considered separate? Are the numbers needed for the next contract negotiation? Or is it to build a complete license balance for the entire organization so that a pending audit won’t create any surprises for management? And please don’t just do a compliance check, do it fast, like right now!
Which brings up to step 7: Financial Position.
Thousands of products from hundreds of publishers. How much does a license actually cost for the new software you’re installing on hundreds of workstations each week? Where are the greatest risks hiding? Better yet, where is there potential to save? Legal compliance is only the beginning of the story. Ultimately, everything revolves around the investment—the software—that needs to be managed. So how should a hard-dollar value be assessed as part of the compliance check?
In this step your license management tool should help you evaluate and prioritize. This is where you will need price estimates. With price estimations you can analyze compliance from the business side. Now you can tell right away that having 10 too few licenses for Oracle database is a bigger problem than incorrectly purchasing 1,000 Office licenses. There’s no way around it: financial numbers are needed for budget decisions.
We’ve arrived at the top of the A-Model: Aggregated Position.
500 business units and 10,000 cost centers spread across the globe. Which one is supposed to pay for the next true-up? Which audit notice is this most serious? An enterprise-wide or global overview is good, especially in a complex, interdisciplinary field like software license management. But reporting on this level can be very difficult. Unfortunately, many no-go’s are overlooked. Someone carelessly offsets some of the over licensing of Photoshop to cover the missing licenses for Acrobat so in the compliance check everything looks A-OK. Or the compliance figures for a group of cost centers are added up for a business unit—but without exploiting all chances for optimization, such as license pools and downgrade rights.
The actual licensing situation is sometimes difficult to evaluate because of the sheer volume of information. To make the right decision you need high level reports, whether you’re interested in the entire company or certain cost centers, one manufacturer or just a single product. The aggregate position is having the technology to drilldown through 7 layers to the individual devices and users and therefore also the power to hit all your license management goals dead on. It is the executive level, a complete illustration of all key software license management information for evaluating risks, cost saving potential, and duties.
And above the A-Model stands Software License Management: Evaluating metering data and reallocating software instead of purchasing more. Setting up reminders for automatically renewed contracts to prevent reinstatements. Finding less expensive alternatives and managing the product portfolio to optimize your software investments and keep costs low. These are your duties as a Global Software License Manager.
About Martin Thompson
Martin is also author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management.
On a voluntary basis Martin a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.
Learn more about him here and connect with him on Twitter or LinkedIn.