Why software licensing need to be flexible as IT becomes more complex

Much as we'd like to think otherwise IT is becoming more complex. New technologies such as in-memory computing and virtualisation together with new ways of accessing and exploiting that technology (e.g. cloud or mobile computing) is changing the way that IT is bought and used.

IT vendors can't have their head in the sand any longer when it comes to how they license their products. A 'one-size-fits-all' approach is no longer suitable in today's increasingly mobile and on-demand world, as today's organisations want greater flexibility from their licensing terms.

According to a recent survey of UK & Ireland SAP User Group members, 80% expect their SAP implementations to be a mixture of on-premise, on-demand and on-device services. However, as this complexity increases so does the complexity of licensing. Ideally, the opposite should be true: as IT becomes more complex, licensing should become as simple as possible so that vendors and users both know exactly what they are offering and what they are getting in return

Changing IT needs

Currently the battle that many organisations face when it comes to licensing is that original license terms were agreed at a time when workforces were larger and the vast majority of deployments were on premise. But in today's business climate many organisations are now looking to re-negotiate their licensing terms.

As organisations' IT needs change, licensing can vary in terms of length, cost per user and associated support costs. In addition, there is the need to ensure that every element of the IT the business uses is covered by a license.

It is also quite simple for licenses to become "lost": there have been a number of cases where organisations have updated and upgraded their IT operations but have then continued to pay for licenses for tools they no longer use or even plan to use in the future. For their part users need to keep a tight rein on licenses.

However, many are doing so with one hand tied behind their back due to a lack of vendor flexibility when it comes to licensing and associated maintenance fees.

Need for greater transparency and flexibility

Indeed, the greatest responsibility for reducing the complexity and increasing the accessibility of licenses lies with the vendors themselves. There are many actions that they could take. For example, licenses should be made transferrable or easily replaceable when users up- or side-grade across their products.

Licensing should also be consistent across the product range regardless of how it is delivered: whether software is accessed on-premise or as a service, users getting the same capability should be on comparable licenses. Of course, nobody expects one size to fit all when dealing with IT. Yet vendors should make sure that their license costs and conditions are transparent and flexible so that customers can make more informed decisions.

It should be in vendors' own best interest to make licensing as transparent, simple and flexible as possible: otherwise they risk increased dissatisfaction among customers and, ultimately, lost revenue.

Vendors should not see this as a call to reduce costs or otherwise hamper their business: ideally, by making licensing as flexible, consistent and open as possible they can reap the benefits of a customer base that understands exactly what they are paying for.

Otherwise they run the risk of customers ending up with shelfware and in the face of complexity reducing their budgets or even taking their business elsewhere.

Neither IT users nor vendors exist in a vacuum: each needs the other to survive. By simplifying and opening up licensing on one hand, and keeping a tight rein on it on the other, both can ensure that they are getting the maximum benefit from their relationship.

Philip Adams, vice chairman UK & Ireland SAP User Group

UK & Ireland SAP User Group Conference 2012 (18 -20 November, Manchester)
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Copyright © 2012 IDG Communications, Inc.

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