Software Licensing – Is there someone to help?

It was over 12 years ago that I made the transition from Finance to IT. I was to take on the responsibility for managing the use and licensing of all software for a 1,200 person international firm.

Coming from a financial background, one of the things that first hit me was that we appeared to be purchasing our software in a very inefficient and expensive fashion. Taking on the challenge of resolving that problem led to a very interesting career choice.

During my explorations into managing our software licensing, several things became very apparent: (1) licensing and product use rights were very challenging topics to understand and there are far too many interpretations; (2) there are very few educational resources available from independent sources; and (3) there is a lot of money wasted by companies each year due to #1 and #2!

1) Licensing and Product Use Rights – I remember once a very basic product use rights I read for a little known piece of software…it basically said, “You have the right to install this on a single computer and use it for the purpose it was intended. You may not use it for any other purposes”. I should have framed it, the pure simplicity was beautiful.

However; I also understand where the software publishers are coming from…we get more and more creative in the use of technology and it opens up more and more loopholes for someone to use software “technically” under the product use rights but definitely not within the intent of the product use rights. Therefore, we end up with pages of technicalities. Take away some of these technicalities and you will also take away some of our options – let me keep my options…I’ll instead read all the small print.

2) Lack of independent educational resources – if you think about it, where did you get your knowledge about software licensing? Probably from a reseller or the software publisher. These are generally the same people telling us how to “save money” on managing our software. In general, I feel they do a pretty good job…but at the end of the day we have to remember that they are in the business of selling us software. Can I really rely on them to tell me how to save money and buy less? I think I can rely on them to tell me the basics, and to answer my questions truthfully…but I can’t expect them to help me in a fashion that will cut into their profits. They are “for profit” organizations afterall.

Over the past several years there has been an increase in independent sources such as industry organizations and services consultants (a really good one is – yes, that’s a flagrant plug for my firm Cynthia Farren Consulting). Additionally, some of the discovery tools providers are now providing advice on asset management. The main thing to realize here is that a tool is not the full solution – albeit a much needed component.

Many of the frameworks now provide guidance, ITIL and COBIT (TM) and a new ISO standard are all available to help.

3) A lot of money is wasted each year – I’ve helped hundreds of companies implement software asset management plans. The one thing that is consistent across the board is that they were all spending too much money (per unit) on their software licensing. This equates to hundreds of thousands of dollars being wasted by an organization, and to no value. Software publishers will not buy back software you over purchased, resellers will not credit you back for software purchased under the wrong purchasing program, and you haven’t bought a new business solution that will improve your business…you’ve simply paid too much for your general desktop software.

Most software publishers have volume licensing agreements. In general, these agreements do not have difficult restrictions – they simply require you to purchase a certain volume of software. In most cases this volume can be purchased over several years. What they do require is that you be in a position to know how much software you need.

If you’re looking for help with your software licensing, you’re in luck – compared to when I started there are many more sources of help. You might start off by first getting a history of what you’ve purchased over the past 3 years and then talk to your reseller about what volume agreements exist for the software you’ve bought in the past. Just remember, while they can be a great source of information, you might want to refine your knowledge with an independent source prior to making a commitment.

Do you have any stories or experiences of challenges you faced with software licensing? Please share them with me…

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