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What is sub-capacity licensing?

Whiteboard Wednesday Episode 17: What is sub-capacity licensing

Whiteboard Wednesday is me, a whiteboard and learning about all things IT Asset Management (ITAM), every Wednesday!

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What is sub-capacity licensing?

Sub-capacity licensing is where you’re licensing a subsection of a piece of hardware. Let me explain by using an example, say that you had a large piece of hardware. This is a big server and you wanted to virtualize that as we’ve described in previous videos. So, let’s say that you had a payroll application running on here, you had an accounts application. And let’s say that you had an ecommerce application.  

Now, some publishers charge for their software, not based on the fact that that software is installed or the number of users that are connected to that software, but the power of the machine that that software is being run on. This is because that’s going to give you in theory more advantage. The more power in that device has, the more value you can get from the application. 

Let’s take that ecommerce application. As an example, let’s say that that was priced based on the power of the device that it was set on. You wouldn’t want to price it based on the power of the device it was set on because it’s in a virtual environment and the power is enormous on this hardware. What the publisher will allow you to do is say, we will allow you to license it based on the sub-capacity of that device. What they tend to do is they want some proof or some evidence to support that, because they don’t want to price it based on that subsection of the hardware. Then when they walk out the door, you go, woohoo, let’s crank it up to here. They want to be able to audit the fact that you’ve kept it at that level and you’ve not abused their licensing.  


So, this is sub-capacity licensing, they might want to track an audit trail of the fact that that’s been allocated as it has. There are also techniques called hard partitioning. This is the way that the hub of the virtual hardware is divided; these lines here are called partitions. And you can have a soft partition which moves, and you can have a hard partition, which is allocated to a specific part of the device.  

These are all technical terms, but they used in licensing, and they drastically affect the price we pay for these virtual environments. 

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.

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