This contributed piece to the ITAM Review is actually entitled in full — “Five misconceptions of software licensing that prevent CIOs from achieving the cost savings they could” — it comes from Andrew Hillier, CTO and co-founder of CiRBA, a company that makes a capacity transformation and control system for virtual & cloud infrastructures.
The bottom line
Every CIO has a bottom line of responsibility to their organisation. CIOs need to balance costs and maximise efficiency. Software licensing has always been a target for cost-cutting, but the shift to virtual and cloud hosting models means that the savings cannot be realised using the methods of the past.
Within IT organisations there are many misconceptions when it comes to how to save licensing costs and how to leverage new licensing models to maximum advantage.
IT organisations need to be aware of the most common misconceptions of software licensing that prevent significant savings in the datacentre.
I license each software instance so virtualisation doesn’t impact this. While the number of instances typically doesn’t decrease in the move to virtualisation, and in many cases can even increase, this misses the point.
Per-core or per host
Vendors now offer datacentre-class licenses that are structured on a per-core or per host basis, and licensing an entire host usually allows an unlimited number of instances to be run on that host. These new models, combined with management tools that are designed to optimise VM density, can provide big gains in manageability and cost.
I’m not near a renewal so there is no point in looking into it.
It is often possible to realise savings on maintenance independent of renewals, and this can be fairly significant. Also, being proactive can help to avoid license cost increases, and for organisations that have become used to continually increasing their spend, putting a freeze on this is a big win. Compliance also factors into these scenarios, and is it also better to be proactive in planning and tracking use, particularly in dynamic virtual and cloud environments.
A common misconception
I have to license the entire virtual cluster so it is difficult to cut costs through better workload placement. This is a common misconception – in most licensing contracts organisations have to license any system that the software will run on. So if there is no way to control workload placements then yes, the whole cluster must be licensed in order to be safe. But there are ways of controlling placements that can contain software components to a subset of an environment, avoiding the need to license an entire virtual cluster. Also, motioning across clusters is now possible, so using cluster boundaries to manage licensing is not nearly as effective as properly controlling placements.
I get such big discounts on software that optimising it won’t save very much.
This may be true for the initial purchase, but many vendors charge maintenance on list price. For expensive infrastructure software components that charge maintenance this way there are some staggering savings to be had by decreasing the physical capacity they need to be hosted on.
Internal cloud simplifies licensing
Internal cloud simplifies licensing then… to the consumer, yes. To the infrastructure managers, no. In fact, it can become quite complex as organisations shift to internal cloud models, where demands are unpredictable and the responsibility for software licensing becomes split between the new cloud teams and the traditional asset management groups. It isn’t safe to assume that cloud models will automatically make software licensing costs go down.
Ask a CIO about their views on reducing licensing spend and they will agree that it’s imperative for their operation. In fact, according to Torsten Volk, senior Analyst, Enterprise Management Associates, “Over-spending on software licensing is rampant due to poor management controls and processes in most large enterprises.”
However, companies like CIRBA that have a software license control module, are positioned to help organisations reduce hardware and software licensing requirements and are well positioned to speak on these harmful misconceptions.