New Strategies for Better Deals

IT managers are in a strong position to negotiate with software vendors and get more for their money.

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Once TMP assesses what resources the new system will require, it can go to vendors and say, "We're going to need this number of licenses over the next three years. How can you help me do that while taking advantage of today's prices?" Jefferson says.

IT decision-makers also need to get a handle on their own software installations -- not just what's out there, but who uses it when, and how often. This is particularly critical if you're thinking about going with a pay-per-usage pricing model.

Over the past few years, industry bodies such as the international standards group ISO have collaborated on a set of software asset management best practices for reducing software costs. Those practices include eliminating or reallocating underused software licenses, eliminating overhead associated with management and support, and ensuring compliance during vendor license audits.

Effective software asset management involves regularly inventorying software assets, determining usage and comparing what's installed with what the license agreement entitles you to, says Snyder. Companies that do this "are in a powerful position to drive down software costs," he adds.

Unfortunately, many IT staffs lack documentation for the company's software assets, according to Snyder. Software purchases are often made by individuals or business groups, with limited or no IT oversight. This limits IT's ability to negotiate volume discounts, and vendors exploit that weakness, Snyder says.

Using Asset Management Tools

Organizations are increasingly using IT asset management and software compliance tools to get a handle on their software assets and purchases.

For the past few years, Baker Hughes has been using CA Inc.'s Desktop and Server Management (DSM) tool to monitor software assets on some 30,000 machines worldwide so IT can determine whether the numbers are in compliance with vendor agreements. "We initially found that we were overlicensed," says Crisp. "This is what we expected, because people were buying software as needed, rather than going to the trouble of figuring out if we had additional licenses to spare." The company recently deployed CA's Software Compliance Manager, which automatically checks software usage against vendor licensing agreements.

CA's DSM also includes a metering tool that reports not only on used and unused licenses, but also on licenses that haven't been executed within a predefined time frame. "This will enable IT to harvest licenses that are just sitting on someone's desktop and redeploy them," says Crisp.

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