Software licensing drags innovation

Often, we think that the primary obstacles to innovation are technological.  Can we run the right analytics on this data?  Will we be able to maintain service performance given the potential scale of our peak workload?  What do we have to do to make this system more secure?

But nothing happens without money.  And, when it comes to software, monetary requirements are largely dictated by vendor licensing.

Unfortunately, software vendors are struggling to keep up with the reality of the New IT, especially when it comes to virtualization and the cloud.

Virtualization presents new licensing challenges, because it changes the way IT organizations utilize machines and processor cores.  So it has rendered conventional models of utilization for a given instance of a piece of software obsolete.

Some vendors have responded to this change by treating virtual machines somewhat like they once treated physical hosts.  Other vendors continue to focus on the physical host-but place restrictions on how many VMs can reside on those hosts.  Others still refuse to embrace the notion of virtualization in any meaningful way.

This fragmented licensing landscape is a real problem for IT.  For one thing, licensing schemes that make it excessively expensive for IT to leverage virtualization have a chilling effect on data center evolution.  For another, disparate licensing schemes add to already burdensome IT complexity.  In addition, a large part of the challenge in predicting software costs is due to the consistent changing of licensing schemes in unpredictable ways and at unpredictable intervals by vendors.

Things get even trickier when IT starts to adopt private, public and hybrid clouds.  If I have an enterprise license for my database, why should my cloud provider have to charge me for hosted instances of that database?  Conversely, if I am paying for cores and/or VMs, how do I make sure I stay in compliance as I automatically and dynamically move workloads between my own data center and one or more cloud providers?

These are, of course, technological issues as well as monetary ones.   To effectively govern software compliance across hybrid cloud environments, IT needs open, standardized protocols for exchanging information about entitlements and usage.  These protocols will enable IT, software vendors and cloud providers to provide each other with the transparency and automation necessary to track compliance and make fact-based decisions about appropriate licensing fees.

But protocols alone won't do the trick.  Software vendors, cloud providers and IT organizations also have to decide upon policies that will appropriately compensate developers for their IP without hampering IT's ability to take advantage of the tremendous innovation taking place in the delivery of digital infrastructure capacity.  Until those policies are clarified, licensing will remain the land mine that keeps IT from striding as boldly into virtualization and the cloud as it ought to.

How are you handling software licensing as you move to the cloud?  Have you run into any major problems or cost snafus?  Feel free to share your experiences and solutions below.

Chris O'Malley is CEO of Nimsoft.  He has devoted 25 years to innovation in the IT industry -- most recently growing businesses in cloud and IT Management as a Service solutions. Contact Chris via the comments below or via Twitter at @chris_t_omalley.


Copyright © 2012 IDG Communications, Inc.

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