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How SKU catalogues save time and money

What do people mean when they refer to a ‘SKU Catalogue’ for license management?

In this article I hope to demonstrate why organizations utilise SKU catalogues, the difference between SKU catalogues and software recognition and the business value to SAM practitioners.

Shopping for Coca-Cola

Browse any supermarket around the world and you are likely to find a section of the store dedicated to Coca-Cola and its fizzy drink competitors. Coca-Cola is produced in a myriad of flavours (Diet, regular, cherry, zero…) and a variety of sizes (cans, big bottles, little bottles, value packs…) suited to customer requirements. Each of these Coke variants has a SKU or Stock Keeping Unit assigned to it.

Stock Keeping Units allow the supermarket to manage their inventory and manage millions of different product lines. If the store is running low on Cherry Cola cans it has a unique identifier to isolate that product and manage fulfilment throughout the supply chain. The supermarket can order the SKU, the SKU is quoted on the purchase order, and the SKU is quoted on the invoice, printed on the box and so on. Without some form of unique identifier managing inventory at the supermarket would be a logistical nightmare.

Note: A SKU is different from a barcode. A barcode is used to electronically identify a product using an optical machine reader. Barcodes may contain SKU numbers and other data.

Shopping for Symantec Backup Exec

The vast majority software publishers also use a SKU to identify product variants.

If we were to go shopping online for Symantec Backup Exec we might stumble across SKU number ‘MLDZWZC1-EI1AS’ (Referred to in this instance as the manufacturers part number by CDW in image below).

Symantec-Backup-Exec

It is important to note that MLDZWZC1-EI1AS refers to a very specific way of purchasing Symantec Backup Exec.

  • It is for Windows
  • It is an upgrade rather than a full license and therefore only valid if accompanied by the underlying base license
  • It is an Academic license
  • It is within a specific buying program – Level S
  • It includes one-year support
  • It relates to their V2012 V-Ray Edition
  • It is in English
  • It has technical licensing constraints (1 CPU 2-6 Cores)

These elements are known as product use rights (sometimes abbreviated to PUR). Some product use rights are made explicit by the manufacturer (this is for one CPU server with up to 6 cores), some product use rights are not made clear on purchase (can I use Backup Exec on VMware with VMotion enabled?). Worse still, some product use rights change on a monthly basis on the whims of the manufacturer.

As you can see the SKU has unique licensing characteristics associated with it. The license would be absolutely worthless if aligned to a French version of Backup Exec installed on a 2CPU server in a non-academic company.

Note: Good practice (and good business) from suppliers is to include the manufacturer’s part number for unique identification as well as the suppliers part number for easy re-ordering on all documentation and invoices (in this instance CDW 2616143). SKU numbers are also usually included in your software vendor license statements and online portals.

Hopefully you can see the business value of a unique identifier in managing an accurate inventory – but how does this apply to license management?

Enter the SKU Catalogue!

If your procurement process is tracking manufacturer part numbers for your software purchases you are, theoretically at least, already in a strong position in determining what software you are entitled to. We just need to marry up your procurement history with what is in use and installed within your environment. Unfortunately it is easier said than done.

Common sense would say that, just like the supermarket, every product in the shop should have a bar code on it so everyone knows how to identify it. In an ideal world we would whizz around your network with a software bar code reader and tally up all of your installs.

Unfortunately, although software manufacturers use SKUs internally, on their packaging and within their supply chain it is commonly missing from the actual install.

The ISO standard for SAM is doing work to rectify this, by developing an XML software tag which installs alongside every software installation storing the SKU and other meta data in a universally recognised format like a barcode (See Steve Klos over at TagVault for more information on ISO/IEC 19770-2). Although the Standard is making good progress, including Microsoft adding tags to Windows 8, we are a few years away from widespread adoption.

Software Recognition vs. SKU Catalogues

Software recognition is not the same as a SKU Catalogue. A SKU Catalogue typically includes software recognition and normalisation.

Software recognition is the process of recognising and normalising technical configuration management technical jargon into recognisable product names and product families. SKU catalogues also perform software recognition but strengthen the license management process by also normalising procurement data and linking it with installed software data to ensure software is being used in accordance with the product use rights.

When you attempt to marry the worlds of technical configuration management and procurement the challenge is to find a common denominator between the two sets of data – the SKU is that unique identifier. Installed software has technical characteristics that can be aligned to a SKU and in turn the SKU can be married to the correct procurement record. The SKU catalogue is the lookup table, the meta data and the intelligence behind this process.

SKU

Maintaining Accuracy

So how does all of this help with license management accuracy?

The SKU catalogue provides a mechanism for filtering, double-checking and maintaining accuracy in SAM processes.

It forces good practice and accuracy – e.g. it is not possible for a Microsoft Select based SKU installed on your network to be aligned to a Microsoft Enterprise Agreement contract in your procurement system. The incompatibility prevents mistakes and ensures organizations are licensed correctly. The SKU catalogue is the lynchpin and translator between the different complex languages of configuration management, product terminology and procurement.

Justifying Investments in SKU Catalogues

The main business benefits of using a SKU catalogue are:

  1. Less reliance on discovery tools – SKU catalogues also perform software recognition and can therefore work with more primitive inventory and multiple systems management sources. Broad network coverage is still required to ensure discovery and inventory data is exhaustive and you’ll need some way of mapping physical to virtual relationships.
  2. Time and money saved on expensive license management resource i.e. man-hours
  3. Data accuracy (less mistakes, better results, reliable data)

Buyers Guide / What to Look For

  1. Organizations with years and years of procurement data might want to prioritize by contract, renewal or vendor to lighten the implementation process with SKU catalogues.
  2. Not all vendors use SKUs
  3. Some vendors have SKUs but it is not always possible to audit and collect inventory for them – especially for data centre vendors
  4. Vendors with SKU catalogues include Aspera, BDNA and Flexera
  5. Some SAM tool vendors say ‘We do SKUs’ which means they have field in their SAM tool for manual entry of a SKU number. Having a field for a SKU number in a license management tool is not the same as using a SKU catalogue. The true value of a SKU catalogue is referencing the Meta data associated with it not the storage of the SKU itself. You are using a reference table built from the intelligence of hundreds or thousands of other implementations.
  6. Some SKU catalogues link SKU to product use rights but not software recognition – which is kind of like having a very intelligent bar code reader which won’t scan anything.
  7. Some SKU catalogues only cover the big volume titles (Adobe, Microsoft, Symantec) and not every single software publisher. No solution on the market is perfect or 100% exhaustive.
  8. The proof of the pudding is in the eating – SAM vendors with good SKU based offerings should be able to benchmark your raw procurement data (with SKUs) against raw inventory data to build a picture very quickly.
  9. With fear of telling you how to suck eggs – Buy software and services based on a proven working model rather than PowerPoint and contrived demo. If you have not got the time or inclination to complete a robust proof of concept then only buy on a service basis with a concrete SLA.

If you have any questions or can share experiences of using SKU catalogues please leave a comment below. Thanks, Martin

About Martin Thompson

Martin is owner and founder of The ITAM Review, an online resource for worldwide ITAM professionals. The ITAM Review is best known for its weekly newsletter of all the latest industry updates, LISA training platform, Excellence Awards and conferences in UK, USA and Australia.

Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.

He is also the 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. In addition, Martin developed the PITAM training course and certification.

Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).

When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.

Connect with Martin on LinkedIn.

9 Comments

  1. Matt Fisher says:

    Hi Martin – really useful to see a clear distinction made between software recognition alone and the additional benefits of normalization.

    For the purposes of completeness, the process you describe in your article above is actually very similar to how the software recognition and normalization process (based on the same automated SKU population you mention) works in the License Dashboard License Manager solution.

    The benefits of this extend beyond license management into other associated aspects of SAM such as procurement (errors are much less likely to happen when procurement officers have exact SKUs to order, rather than generic product names or descriptions).

    So in short we agree entirely, a SKU catalog should be a central part of your SAM and license management strategy.

  2. itsmreview says:

    So LD has a SKU catalogue or not?

  3. Matt Fisher says:

    We don’t call it a SKU catalog, but a product catalog. But the SKU is an integral part of said catalog and does not require manual population. We don’t publish the SKU information separately in catalog form, but this is something we would consider if there were sufficient demand. What we offer right now may not meet your strict criteria for a SKU catalog (e.g. we don’t “…provide a list of SKUs that can be browsed and
    used as a lookup from within products”), but in terms of “The product(s) enable the normalisation of data
    into clearly defined set of product descriptions” then yes we definitely do this and use the SKU information as a key component of this process.

  4. itsmreview says:

    I think the power of the SKU is the unique identifier being able to tie up the two different languages of procurement and config. I’m not saying SKU catalogue is the only way to go – but any SAM vendor doing otherwise needs to show the robustness of their offering in comparison to SKU.

  5. Kacey Ende says:

    Martin, this is an excellent article. I’m glad there’s finally something out there that clearly explains how important a SKU catalog for license management is. Especially point #5 in your “Buyers Guide / What to Look For” list! The catalog should be an integral part of the technical solution. Specifically, the catalog should deliver the tool the data it needs to perform its functions. If this is true, then changes in license models and new metrics only need to be added to the catalog (and a catalog update provided to the user), without major changes in the underlying tool. Following this strategy, Aspera is able to immediately make new information available to our users, without getting stuck behind release cycles.

    The first SKU catalog was introduced by Aspera in 2000 and since then we’ve learned quite a bit. I think it’s important to clarify what kind of SKU is in the catalog. The reason for this is that resellers also assign SKUs to the products they sell, but these cannot be guaranteed to be unique. On the other hand, software publishers’ SKUs are unique (in connection with the publisher). So, any catalog using resellers SKUs must have an extra check point in the process to avoid crossing wires.

    Although SKUs are very important, anyone claiming that they are “the solution” to license management is missing a big piece of the puzzle. SKUs don’t tell the user the whole story, namely what’s actually written in the license. This information needs to be added in to the catalog. At Aspera we have 30 people on our Content Team (1/3 of all Aspera employees), who supplement the SKUs with the related product use rights. Otherwise, yes the catalog knows which license you bought, but not the product use rights in it = there’s no automation of the compliance report.

    In other words, the catalog should centrally contain all the data its users need
    in order to figure out if they’re compliant. This means SKUs, software
    recognition criteria, product use rights, and metric calculation algorithms.

    This leads me to something I see often in marketing: the question of quantity or
    quality. Do I want a catalog with 300,000 SKUs, but only PUR information
    for just a few publishers and products? Or do I want a catalog that covers
    170,000 SKUs, and has all the necessary information for all of them. Just like point #6 in your “Buyers Guide / What to Look For” list. I guess it’s a question of wanting a lot of (useless?) data or wanting quality data that you can trust and work on.

    Thanks for the informative article.

  6. John Fox says:

    Martin great article. You put the argument together really well I thought.

  7. John Fox says:

    Hi Martin,

    As I said great article.

    Two things that I question though. I’m interested in your thoughts around these.

    “Less reliance on discovery tools.” I don’t think thats true and probably a dangerous thing to argue. The base of data from the discovery tool is the only way any License Management, SKU catalogue, ITSM Suite or whatever tool comes after will give an accurate answer. You can’t match up a SKU catalogue to data that is incorrect or not there.

    In the section “Software Recognition vs. SKU Catalogues”

    I’m curious if you know of any products that actually match these (Software Deployments to SKU) to any extent automatically. I have only seen these be manually connected. Also you mentioned the SKU as being the common denominator which in my opinion it isn’t unless you make it so. The only way to attach a SKU to either of those (that I can think of) is to base it on a standardised naming convention across the following 3 data sets (Deployment Data > License Data > Procurement Data) for the following data columns Manufacturer > Software Product > Software Edition > Software Version.
    Even doing that you are still using an 80/20 rule or maybe a 90/10 rule because there are all manor of things like MDOP, ECAL etc etc etc Which have several things they “could” attach to in deployment data but don’t necessarily have to depending on what licenses the org owns.
    Feel free to shoot me down or argue anything or ignore. 🙂 I suspect you may even be able to put me straight on my points.

  8. Tom roller says:

    Thanks for the article, I would like to have some more information regarding how can a I create a good catalogue and more than this how can I keep it update monthly. Thanks in advance.

  9. Deepa Parab says:

    Hi Martin,

    Great article, we have some challenges getting SKU information from our procurement source..Can you please guide us to overcome these challenges, how does SAM Tool will help us to recognized the entitlements records without having SKU values in it, as part of license clearing process. How product catalogs will get update without we providing SKU information… what are alternate options getting SKU information.

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