The ITAM Review

News, reviews and resources for worldwide ITAM, SAM and Licensing professionals.

What does the ‘Cloud’ mean for ITAM?


7483239848_26e1f995e9_zThe term ‘Cloud’ has been a buzzword within ITAM for a few years now. We are constantly hearing about ‘cloud based storage’, ‘cloud based licenses’ and ‘cloud based software’. What exactly does the term ‘Cloud’ really mean for those within ITAM, and how will it affect day-to-day ITAM roles moving forward?

What is the ‘Cloud?’

Cloud computing is basically a number of remote servers and networks that allow organisations to access services, software and storage via an external platform. This is useful for organisations that do not want to hose or store various software or services internally due to a lack of resources or funds, but are happy to store data, services and software on an external platform.

As the cloud is an emerging technology there are still a number of questions around its security and location of data. Common questions that organisations ask about cloud services include:

  1. Where is our data stored? (Location)
  2. What happens to our data if we no longer use cloud services?
  3. How do you (cloud provider) keep our data safe?
  4. How will you ensure that ‘downtime’ is kept to a minimum?
  5. Will you advise us if you make any changes that will affect our services? (Some automatic updates/changes have been known to affect services with very little communication from the service provider to users).
  6. If we have an Internet outage is there anyway for us to access our data?
  7. If we wanted to, how to we leave and remove all our data from the cloud?

Before entraining into any form of agreement with a cloud based provider it is important that you are aware of the benefits and drawbacks from using hosted cloud services, and have a plan in place should you ever decide to leave using the cloud.

Cloud computing is seen as a cheap way for organisations to store their data, software and services without needing to invest in expensive hardware. It also allows external experts to manage the services and make any fixes or updates that would usually have to be carried out internally by the organisation. However with more and more organisations moving to the cloud, the chance for negotiation of cloud-based contracts is starting to dry up, so organisations are getting less of a discount or incentive to move to the service.

What impact does this have on ITAM?

‘Cloud’ based software, licenses and storage poses new challenges for ITAM professionals. There have been a number of publications that states that the cloud will mark the end of ITAM, but it is the complete opposite. Cloud based services just changes the way we will need to manage software, and further emphasises the importance of ITAM to an organisation.

With the new cloud based licenses there are a number of new elements added to an ITAM professionals role, including user management, deployment management and contract management. This means that whilst compliancy is not longer such an issue, there are other elements of the software and licenses that need to be correctly managed. As the majority of licenses now state that a user has the rights to install the software on up to five devices, including a home machine, the ITAM team need to ensure that there is a management process in place to ensure that should the user leave they are no longer able to use a license that belongs to the organisation.

Cloud poses even more challenges for ITAM professionals, and ITAM professionals need to ensure that they keep their knowledge level of cloud and cloud based licenses to expert level to ensure they fully understand their organisations rights with cloud services and software. When negotiating new cloud service contracts it may be important to ensure that someone from the organisations legal department are present to ensure that the organisation is fully aware of their legal rights.

A new dawn for ITAM

With the new cloud based services and software licensing, organisations need to ensure that they modify existing ITAM processes and policies to fit in around the cloud. The cloud is a new element and challenge when it comes to software license management and software asset management, so organisations processes and policies need to be updated to reflect that. This will help ensure that organisations are still getting the most out of their cloud based software assets and services.

It is also important that organisations keep up-to-date with what ITAM tools are offering the way of cloud management. If there is already an existing ITAM solution implemented, then the organisation needs to understand what new features and capabilities they will be bringing to the product to ensure it can successfully manage cloud based licenses and cloud based software. Cloud based software and licenses still need to be managed by ITAM as there needs to be clear management of how many installs each ‘user’ has so the organisation can ensure that compliancy is maintained.

Furthermore, ITAM needs to ensure that they have an active say in the starters and leavers process. A user could have installed a company own license on a personal device, as all they would have to do is log into their vendors account, and download/use the software through cloud services. ITAM need to ensure that as part of the starters and leavers process that a users account for all cloud based software is shut down so the user can no longer use a license.

It could also be a challenge to ‘recycle’ software licenses with the new cloud based model. It is still possible, but can be more of a challenge that it was with perpetual licensing. User accounts need to be registered and user login details need to be changed when assigning a license to a new or existing user, thus making the internal audit and recycling process slightly different!

Do I have to move to the ‘Cloud’?

 The majority of software vendors are now moving towards cloud based licenses and cloud based services If you want the latest versions of the vendors software, like Microsoft and Adobe, then you will need to migrate to the cloud. If you want to keep to a perpetual licensing model then you will be forced to used older versions of the software as a number of Tier 1 vendors will no longer provide support or updates for non-cloud based software.

Cloud based software will receive regular updates and patches for the period of your contract. These updates will be set out by the vendor before hand, and may consist of major releases or minor updates. This is a big positive of cloud-based software as it ensures that organisations always have the latest version of software, meaning that they can keep up with competitors and maintain an advantage.

However, this could also been seen as a negative. Major releases may mean that the packaging team needs to repackage the software on a regular basis, which may result in downtime or workload issues. Furthermore major releases may mean that there are compatibility issues with in-house software, something that needs to be assessed and discussed before moving towards a new release.

There are a number of pros and cons to moving to the cloud, but if you want the latest shiny new software releases then you will not have a choice. Device based perpetual licensing is starting to be a thing of the past. Either way, cloud migration takes a lot of planning, preparation and research before an organisation can make the plunge. Having a SAM or ITAM tool that can manage cloud based licenses and users is crucial as is having updated processes and polices to ensure users use the new software in the correct way.

Is this the future of software licensing? 

With regards to software licensing it is looking as though more vendors will take up cloud based subscription licenses. As we have mentioned in our recent ‘Top 10 Licensing Types’ article, and our ‘Pros and Cons of subscription licensing’ that cloud based subscription licenses are the primary and preferred method of software licensing for most vendors now. Our research shows that 90% of Tier 1 vendors offer subscription licensing as their main method for licensing their trademark applications.

Vendors are continuing to move towards cloud based licensing, as they primarily want to focus on increasing revenue streams and also highlight their importances to the organisation. The subscription model works great for personal and home use. An end user can purchase a really expensive bit of software for just a month or so at a fraction of the cost it would have cost them previously to buy a perpetual license.

For business use however it’s a bit more complicated. A number of processes need to incorporate the new management method required for subscription licenses, with account creations, different deployment and update options (especially for those cloud-based services). The subscription and cloud-based models are certainly providing a big push towards SaaS (Software as a Service) rather than the on-premise perpetual software we are used to. However, if it helps organisation with software compliancy then it makes sense to move towards a subscription model. The only issue we have with it is that you will never own the asset; it is merely a rental service type asset.

It could get risky!

There are a number of security and software licensing risks within the cloud environment. It is important that an organisation knows where their data is stored, and who can access it. Sure, it’s in the ‘cloud’ but where exactly is that storage? How can the host ensure the organisation that there will be no security breaches, or any issues with unauthorized people accessing the data? It is also important that the cloud provider shares any disaster recovery policies they have in case their services ever go offline, or they lose organisations data.

The main license metric for the cloud is ‘user’ or ‘account’ based licensing. This means that a single user can install the software on as many machines as set out by the software license agreement. In most cases, this is five devices and includes mobile phones and tablets. These installs and accounts need to be managed through ITAM and ITAM technologies, otherwise organisations could end up paying for a user to use the software from home, or a user to continue to use a company owned license even if they have left the organisation. This is obviously not in the interests of an organisation. They need to recoup the license and recycle it to a new user.


The cloud is now a fully integrated part of ITAM, whether people agree with its principles or not. If you want the latest version of Tier 1 vendor’s software then you will need to move towards the cloud. As we’ve explained, the cloud has a slightly different meaning for ITAM as the applications are not really in the cloud, but updates and patches as pushed through cloud services. You still need to install a local installer like you would with perpetual licenses, and you still need to address deployment issues and general install issues.

The cloud also requires AD integration, as the licensing metric is user based. This means that for a number of cloud applications various AD groups need to be created and users dropped into those groups to set various permissions for accessing the software. This adds to the role of the ITAM team and just continues to show that the cloud is not the death of ITAM.

Finally, cloud based licenses are different to perpetual licenses. As it is more of a ‘Software As A Service’ (SaaS) the licenses are subscription and user based, rather than perpetual and device based. This means that to manage cloud based licenses organisations need a SAM tool that can differentiate between license types and assist the ITAM team manage compliancy and usage for cloud based licenses.

What do you think about cloud-based licenses? Are you a fan of the cloud, or would you rather it just blew away? Let us know and get in contact!


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About David Foxen

David Foxen is a Software Asset Management expert and enthusiast. He had a vast experience of successfully implementing SAM, SAM tools and also made huge cost savings. A member of the ISO Standards WG21, David is a massive ITAM geek, so uses any opportunity to talk about the subject to who-ever will listen. He believes that the industry needs to share its knowledge and success stories to help the SAM industry mature and become more effective. Always willing to help, his primary goal is to make a difference to organisations and the SAM industry so everyone will know how epic SAM is!

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