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Quick guide to Network Licensing and Software Defined Networking

Network Licensing

Network Licensing – “IT organizations should assess the extent to which ITAM/SAM skills, best practices and tools from the business applications organization can be extended into the network, telecom and security services areas”

Networking has seen a dramatic shift from hardware to software defined networking. I asked Tom Nallen, President of Network Licensing Strategies, to give us the low down on network licensing, software defined networking and the opportunities for Software Asset Managers.

Q. For the complete beginner – What is network licensing? Who are the key providers readers are likely to have heard of?

Simply put, network licensing provides right to use entitlements for software used to enable data networking, telecommunications – including IP telephony and online collaboration applications – and all of the expanding forms of network security. These entitlements have traditionally been fulfilled as perpetual licenses delivered with a network, telephony, or security device prior to it being installed at a customer site – much like pre-installed software licenses on a new personal computer you may have purchased. License keys must be activated through a registration process prior to making the device operational in the customer network. Flexera, Gimalto and Nalperion are a few well-known vendors performing licensing and entitlement management services within the networking industry.

Q. What is your background in this area and how did you become a specialist in this area?

It seems I’ve been working with software forever. In graduate school, I sold small business accounting software for a computer time-sharing start up. A bit later, I launched Verizon’s first online shopping directory around the time that large print telephone directories began to fade. A few years after that I helped launch the first Cisco Integrated Services Router (ISR) where advanced security and IP telephony services were delivered in software embedded within a small branch router. The ISR “full service branch” solution was a decade ago and laid the services-in-software foundation for today’s software-defined Wide Area Network (WAN) solutions.

For the last 4 years of my 17 year networking career, I’ve led the Cisco software transformation initiative focused on ELA and new software buying programs. In this role, I built systems and processes that addressed some of the long-standing pain points around software licensing for networks. In doing so I learned first-hand how network licensing works, where it’s going and the potential opportunities and pitfalls for those who work with it. Helping companies navigate this transition is the main mission of our new company, Network Licensing Strategies.

Q. What does Networking software actually do and how is it evolving?

Networking is about moving information between connected devices – say a server and a laptop computer, for example. Information is transmitted in formatted units of data we call packets. Routers, a fundamental networking device, use elements referred to as the control plane and forwarding or data plane to process packets and deliver the information from the server to the laptop. Control plane elements typically run in firmware or software, while forwarding plane elements utilize the underlying hardware capability in the router to provide per packet processing and handling as directed by the control plane.

These key control and forwarding plane elements have traditionally been delivered within the router as a single stand-alone device. Network architects and technologists have recently found new efficiencies can be realized by separating the control plane software from the network device hardware and running that control software in the cloud. This enables more generic, potentially lower cost hardware in the physical network and easier, more cost-effective policy management from a centralized console in the cloud.

This decoupling of control plane software from forwarding plane hardware is a central concept in Software-defined networking (SDN)

Q. The value of networking infrastructure is said to be moving from hardware to software – can you explain this transition and what it means for licensing and cost optimisation?

Well, it’s pretty clear in the example we just walked through. By decoupling the brains (software) from the brawn (hardware) in the network, one should be able to save hardware capital expense and achieve network administration efficiencies. Another benefit is that network feature-functionality – often enabled in software – is no longer tied directly to the hardware refresh cycle. Of course, it’s never this simple in practice because there are things called ASICS (Application Specific Integrated Circuits) that provide increasing feature functionality embedded within networking devices. Customers also have production networks where previously installed gear must work with newly purchased solutions.

Licensing becomes more important as soon as network software is monetized separately from the hardware – and especially when it’s no longer a perpetual entitlement. Network vendors are already moving to monetize their software separately from hardware – even in cases where the control plane, or embedded software services have not yet been decoupled from the hardware it runs on. Every day it seems we are seeing new software subscription and ELA-like offers from networking vendors and this trend will only accelerate. So, while customers have the potential to save on capital expense with reduced hardware costs, they must watch the recurring software expense line items.

In a subscription or any capped consumption, term-based licensing model such as ELA, entitlement management is critical to enabling the desired business outcome at the planned for expenditure level.

Q. Acronym Buster time! What does SDN and NFV mean and why are they important? How does software licensing change with these models?

Earlier in this conversation we touched on SDN, or software-defined networking and some of the potential benefits that decoupling control plane software from the forwarding plane in network hardware can yield. IT resource virtualization is a separate technology solution and trend apart from SDN. Most of us are aware of how server virtualization with blade servers, hypervisors and virtual instances improved capacity utilization and the data center cost structure. NFV, or network functions virtualization generally applies this same resource virtualization approach to the network. With NFV, instead of virtual machines, we have virtualized network services such as firewall, switching, server load balancing, application acceleration, etc. all running within a virtual cloud instance or container. The idea is that these virtual cloud instances, which may include access to business applications, can be flexibly provisioned to scalably meet user demand. NFV and SDN can be complementary in that NFV scalably provisions network services on demand, while SDN provides the cloud-based policy decisions to drive cost effective access to and data transport for those services. The virtual network services that are scalably provisioned with NFV and SDN are often delivered in software and thus must be licensed. Efficient and rapid licensing is critical to simplify end-customer activation. Legacy licensing models designed for on-premise, node-locked entitlements are challenged by the need for rapid license deployment, metering, and the ability to redeploy licenses from one virtual instance to another. Emerging network technologies like NFV and SDN will drive the transition from on-premise, node-locked entitlements, to pooled entitlements in the Cloud.

Network Licensing

Tom Nallen, Network Licensing Strategies

Q. How are new technologies and approaches changing the license models of for networking software?

The next generation network will utilize software in the cloud to control and manage access to business applications both within the private network and the public cloud to securely deliver business outcomes at reduced cost compared with traditional on-premise networks. A need for speed and intelligence will spur new cloud-based licensing technologies and processes as well as new network software buying models. Network vendors will share in customer success with new trust-based, pay as-you-grow licensing models that are less tied to a hardware device purchase transaction.

Q. How does networking software compare to other traditional software licensing models?

Most of the major business application software vendors like Microsoft, Adobe, Autodesk, and others have already started or made the transition from perpetual to subscription software licensing models. They and their customers are wrestling with the intricacies of managing entitlements for cloud-based applications and software services fulfilled as a subscription. Networking vendors like Cisco, HP and Juniper have only just begun this transition. But it is a transition they must make and make quickly because technologies like SDN are changing the value dynamics in the traditional network. It is clear that the way companies and organizations buy network services will change and they need to be prepared for that change.

Q. Where is the low hanging fruit for optimisation and cost saving with networking software? Where would you recommend that readers start in exploring this area?

Two things come right to mind:

  • First, IT organizations should assess the extent to which ITAM/SAM skills, best practices and tools from the business applications organization can be extended into the network, telecom and security services areas. The networking team is busy keeping the network up and meeting business outcomes and may not be focused on developing the expertise, organization and processes to manage network software entitlements in a rapidly changing environment. It may be ideal to work toward a common software entitlement management infrastructure across IT regardless of application or network software assets.
  • Secondly, one of the mantras of software licensing is ”understand what entitlements you own and what you’re using”. This certainly applies to networking software – and I would add “where you want to go”- especially if your business is growing, you’re considering expanding your network, or deploying new services or applications. It’s very important to understand the baseline as you consider new license consumption models and move from a perpetual, on-premise model to a subscription and cloud environment.

Tom Nallen is President of Network Licensing Strategies.

About Tom: 

For the last 4 years of his 17 year networking career, Tom led the software transformation initiative at a leading network vendor focused on ELA and new software buying programs. In this role, Tom built systems and processes that addressed some of the long-standing pain points around software licensing for networks. His team delivered 10X faster licensing cycle times, enabling an 11X customer base growth and Tom learned first-hand how network licensing works, where it’s going and the potential opportunities and pitfalls for those who work with it. Helping companies and organizations navigate the transition to the nextgen cloud and software-defined network with an emphasis on licensing and entitlement management is the main mission of our his new company, Network Licensing Strategies.

About Martin Thompson

Martin is owner and founder of The ITAM Review, an online resource for worldwide ITAM professionals. The ITAM Review is best known for its weekly newsletter of all the latest industry updates, LISA training platform, Excellence Awards and conferences in UK, USA and Australia.

Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.

He is also the author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management. In addition, Martin developed the PITAM training course and certification.

Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).

When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.

Connect with Martin on LinkedIn.

One Comment

  1. For more on this subject check out Tom’s recent whitepaper: “SAM Opportunities in the Software-defined Network”

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