2012: the year of convergence? CIO’s to face critical licence challenges of a user-centric model

Dec. 15, 2011 - PRLog -- 2012: the year of convergence? CIO’s to face critical licence challenges of a user-centric model

By Steve Schmidt, Head of Product Management, Flexera Software

As we surf the wave of IT consumerisation, the explosion of virtualisation and the exponential growth of cloud computing - CIO’s are faced with the consequential licencing challenges these disruptive technologies have created. Without working through these licensing issues, the larger strategic objectives enterprises are pursuing by adopting new technologies - such as the continuing need to save costs, remain competitive, and above all work nimbly – will be illusory.

My top predictions for 2012:

1. Virtualisation booms and walks up the stack
Enterprises will continue to adopt virtualisation technologies as a way to more flexibly address the computing requirements of the business, to reduce operational costs and to increase disaster recovery capabilities. The use of virtualisation will continue to be applied to higher layers in the operating environment.  While there are other types of virtualisation (e.g., storage, networking, etc.), these three layers will be very challenging from an application and license management perspective:

•   Machine virtualisation – operating at the OS layer, this technology will expand in its use not only for server computing needs, but also for desktop environments.
•   Application virtualisation – operating at the application layer, this will help more organizations to isolate applications from one another, and to offer streamlined delivery options.
•   User profile virtualisation – operating at the user setting and data level, this newer entrant will enable users to login from any device and get access to the same environment that they previously used.

Enterprises will mix and match these technologies to create a highly flexible and efficient work environment.  Tracking usage of applications delivered with these technologies will become more challenging, though, and new solutions will be needed to gather that application usage data and compare it to entitlement data.


2. The Cloud takes shape, with a focus on private and hybrid
Cloud computing is built on virtualisation technology (see point 1), and turns those technologies into alternate business models for delivery of services.  Many enterprises will continue to focus on building out private clouds that they have running on premises. They will be able to move most applications to this type of infrastructure, but probably not all.  As they get more comfortable with that approach, they will evolve to using resources from cloud service providers to extend or optimise (or both) what they have already established, creating a hybrid environment. Depending on the types of applications, security measures put in place, and risk profile of the companies, the use of public clouds will also begin.

This evolution will put pressure on the need for license management solutions to work effectively in cloud environments.  For example, licence servers will need to be updated so that they cannot be replicated numerous times in violation of licence agreements.  Licence consumption will start to be tracked and synchronised across both local and remote clouds.      


3. Usage-based models gain traction
Subscription services are becoming more popular for software, especially for new SaaS applications.  They often start out using a user-based licensing model, but as they mature, they will become more complex, and evolve from user-based to usage-based. The type of metrics implemented include time, feature set, location, device type, and others. They vary widely and can be combined as needed.

Usage-based models will also be applied to traditional packaged applications, complementing the traditional perpetual license models in use.  This will help ISVs (Independent Software Vendors) reach new markets, upsell users to additional licenses on a temporary basis, and introduce add-on services.

Software publishers who have historically included no licensing or simple home-grown mechanism will seek more complete solutions.  Enterprise consumers will begin to ask for usage reports, and some will sync them with their chargeback/showback systems.


4. Enterprise users will increasingly want to act on their own behalf, including  BYOD (Bring Your Own Device) and self-service to applications
The enterprise adoption rate for mobile devices like Apple iPads, iPhones and Android based tablets will continue to climb, and with it the conundrum of how best to manage them.  As the BYOD trend surges into 2012, businesses will need to start thinking about how to inventory them, making decisions about whether personal devices will be allowed to join the network or not.  Enterprises will need additional management capabilities to bring these devices, and the applications running on them, into compliance with internal policies through configuration and restrictions.  

Employees will also expect self-service capabilities - they will want to be able to select an application from a list, like they do on iTunes or other marketplaces today, and have it delivered to them.  There may be a full blown approval process behind the scenes, but they won’t necessarily need to be part of that. Mechanisms to track use of corporate application assets, even when on a personal device, and to automate the lookup of requested applications against an entitlement pool will emerge.


5. IT Spend Management
Still in the grasp of a downturn, 2012 will be the year of “IT spend management”. There will never be more pressure for enterprises to remain licence compliant not only from a governance standpoint, but in terms of financial savings.  CIOs will continue to need to be creative about finding hidden pools of waste to trim their budgets and at the same time fund strategic projects. With most of the obvious sources of waste long since scoured, the murky, complex and seemingly indecipherable world of software licenses will provide a new opportunity for cost cutting and project funding – managing these software costs will enable businesses to channel those new-found savings into projects that matter.

Expect ISVs, who are continuing to struggle to monitise and grow their business, to use opportunities like enterprise acquisitions and divestitures to perform audits - as it will continue to be a means for them to raise more revenue.



6. Licence optimisation comes of age
Software assets have always been notoriously difficult to manage and optimise, and it’s been costing businesses millions.  However, in 2012 we’ll begin to see more enterprises move beyond traditional software asset management techniques, and towards total optimisiation of licence usage. Moving beyond standard inventory, licence optimisation gives a means of analysing software purchased against usage patterns, minimising licence consumption and ensuring the most efficient allocation of software across the organisation.  It takes into account specific product use rights, such as how the software can be used and whether the software can be freely upgraded or downgraded between versions.  

We’ll also continue to see interest from outside the IT department, especially from the finance and procurement departments. Collectively, they will have the ammunition to track license spend, budget effectively for future purchases, negotiate harder on contracts with facts based evidence and ultimately optimise these key organisational assets.


Editors Note: if you would like a fuller article that looks into these topics in more detail, including issues surrounding ‘the internet of things’, Windows  7/8 migration etc., then please get in touch.



For further information please contact:

Nicola Males/Vidushi Patel
Vanilla PR
+44 7976 652491
Nicola@vanillapr.co.uk/vidushi@vanillapr.co.uk