Software License Optimization

Seeing the Bigger Picture of SAP Licensing

Flexera Software — Tue, 18 Jun 2013 09:13:27 -0500

By Chris Hughes

SAP license optimization typically involves three main techniques:

Retire SAP user accounts that are not actively being used
Identify duplicate users not found by License Administration Workbench (LAW)
Allocate the optimal named user license type to SAP user accounts based on analysis of real usage data

While substantial cost savings can be realized using only these techniques, there are a number of other licensing issues which should be considered for an organization to achieve a complete and accurate picture of their SAP license compliance position. Ensure there are no costly surprises in a true-up or SAP software audit scenario by taking these into account:

Contract clauses – purchased counts and license ratios:
SAP contracts may contain a number of clauses which influence how named user license allocations should be made. Most SAP license management solutions do not consider these clauses when calculating their optimal named user license allocations, meaning that the resultant license position is either sub-optimal or in breach of the organization’s contract.

The optimal license position should not exceed the purchased count for any named user license type if that is avoidable. For example, if an organization has a surplus of Professional User licenses but their Limited Professional User licenses are being over-consumed, the surplus Professional User licenses should be used in place of some Limited Professional User licenses such that the resultant license position avoids over-consumption of any named user license type.

Some SAP contracts stipulate a minimum ratio of Professional User to Limited Professional User licenses. The optimal license position should avoid allocating more Limited Professional User licenses than the ratio allows, even if this means allocating a more expensive license type to ensure compliance with the contract. For a better understanding of potential cost savings relating to license ratios, I recommend this blog.

SAP Package licenses:
Package licenses represent a significant amount of SAP licensing spend for most organizations. Package measurements are run during a system measurement (transaction USMM), but it is very difficult to make use of this information. Some packages do not support this reporting mechanism and others return many values, which makes it difficult to determine a single license consumption figure.

Your SAP license management tool should be able to run package measurements independently of performing a system measurement, and be able to calculate a single license consumption value for each package. SAP license managers should have visibility into package license consumption at all times, to avoid costly surprises at true-up.

SAP Indirect access:
SAP LAW consolidates system measurements from multiple SAP systems into a single LAW report. The resultant report does not include information about users accessing SAP through a non-SAP interface, even though these users require an SAP named user license. This is what SAP refers to as ‘indirect access.’

SAP license managers should have the ability to import user and activity information from non-SAP systems, and incorporate this information when calculating their SAP named user license position. Advanced SAP license optimization tools should provide this capability.

These considerations provide visibility into aspects of SAP licensing that may otherwise be neglected. Can you risk not looking at the bigger picture?

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To learn more, please view our on-demand webinar: Lifting the Lid on SAP Licensing.

The Future of Mobile Devices in Engineering

Flexera Software — Fri, 14 Jun 2013 07:40:17 -0500

By Pete Johnson

Numerous articles, including this one at TechCrunch, point to the rapid proliferation of mobile devices, including smartphones and tablets. Various sources discuss that the average consumer now has 1.5 such devices, and by 2040 we could average 5! These devices have vastly increased processing power compared to ones we had just a few years ago, and that trend is sure to continue. To what use will we put all this number-crunching capability we carry around?

Microsoft has an idea. According to their webpage detailing System Center 2012 Configuration Manager (SCCM), they believe that companies will start leveraging the processing power that their employees bring to work every day. Since these devices are constantly connected to the Internet and have easy-to-use interfaces, companies will start allowing these devices to join their IT infrastructure. With virtual desktops and cloud-based computing being rapidly adopted, it’s not hard to see a future where employees access critical work applications around the clock from their mobile devices.

In fact, as I was having dinner this past weekend with a good friend of mine, who is an engineer at a company that designs and manufactures networking equipment, he was constantly checking his laptop. I asked him what he was doing, and he said “checking on some simulations that I am running at work”. While he was using a Windows laptop, the technology exists today to do the same thing from a smartphone or tablet.

And this is just a first step. Eventually, these devices could be running the actual engineering application, allowing the company to leverage far more computing resources than they own. Solutions to security issues related to cloud computing could easily be applied to these mobile devices as well.
When will your smartphone or tablet be running the engineering application that you use at work? It might be sooner than you think!

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To learn about managing concurrent licenses used for many technical and engineering applications, please view our on-demand webinar: Creating a Mature SAM Process for Concurrent License Management.

To learn more about managing licenses in virtual desktop environments, please read our whitepaper: Meet the BYOD, 'Computing Anywhere' Challenge—License Management for Desktop Virtualization.

Content Is King—In this Case, its Software Licensing Knowledge that Matters Most

Flexera Software — Fri, 07 Jun 2013 14:43:52 -0500

By Chris Hughes

Once upon a time, there was a license manager named Sally who needed to determine her organization’s software license compliance position. She opened up her enterprise Software License Optimization solution.

First, Sally set up her solution to automatically import inventory data from her configuration management system on a periodic basis. A normalized list of installed applications and their install counts was automatically generated by processing the data with an extensive Application Recognition Library.

Second, Sally’s Software License Optimization solution imported purchase orders from her purchasing system. A list of software licenses and their entitlement counts was automatically generated by utilizing a comprehensive Stock Keeping Unit (SKU) Library to understand exactly what was purchased and automatically match licenses to installations.

Third, Sally’s Software License Optimization solution applied vendor specific license entitlements—known as Product Use Rights, using the built-in Product Use Rights Library and the detailed use rights for each license and application were automatically populated in the asset management repository.

Finally, Sally pressed a button and the license consumption for every software license was calculated, generating her organization’s optimized license position. The reduction in license consumption saved her company millions of dollars in software true-up and contract renewal costs.

Does this sound like a fairy tale? It doesn’t have to.

Library content that captures software asset details (e.g. inventory “fingerprints” and software product part numbers) and licensing knowledge (license models and product use rights) is one of the foundations of Software License Optimization. It is the difference between overwhelmingly manual and highly automated processes, and can dramatically shorten the time to value of a Software Asset Management (SAM) and License Optimization project.

At Flexera Software, our attitude is that (Library) Content is King. We’ve invested over 60 person-years of effort into researching and building the most comprehensive content libraries in the world so that you don’t have to. Our libraries provide application recognition for over 120,000 applications, software product details for nearly 600,000 software SKUs, and detailed Product Use Rights for a range of major software vendors (Microsoft, IBM, Adobe, Symantec, etc.)

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Learn more by reading our white paper: Moving up the Software License Optimization Maturity Curve to Drive Business Value.

Enterprise Software Asset Management Survey Now Open

Flexera Software — Wed, 05 Jun 2013 16:21:35 -0500

By John Lipsey

Enterprise software represents a major portion of most organizations’ IT spend. We know much of that software budget spend – as much as 25-30% -- could be saved through better Software Asset Management and Software License Optimization practices.

Flexera Software is conducting an anonymized survey to understand organizations’ Software Asset Management practices, so we can help benchmark where opportunities for greater savings and efficiencies can be found. The results, which will be published in an industry report later this year, will help organizations answer many questions such as:

What percentage of IT spend is being wasted on unused software – “shelfware”?
Which software vendors are auditing their customers’ software use and extracting the greatest penalties (“true-ups”)?
What challenges do organizations face migrating their applications to Windows 7, virtualized, cloud and mobile environments?

We would appreciate five minutes of your time, and ask that you complete our brief survey, which can be found here. All survey results will be consolidated and reported on anonymously. We will not release any identifying information about survey participants.

If you participate in the survey, we will furnish you with a copy of the survey results in our industry report, free of charge. We will also enter you into a drawing to win one of five iPad Minis.

I hope we can count on you to participate in this important industry study.

Take the survey now!

Different License Models Require Different Optimization Strategies

Flexera Software — Mon, 03 Jun 2013 08:34:40 -0500

By Chris Hughes

From a Software License Optimization perspective, the way in which software is licensed has an impact on how its license consumption is optimized. The primary SAP license models, for example, are User based and Package (aka Engine) licensing. Other common business applications from vendors such as Microsoft and Adobe frequently use a device or installation based license model. Although, Microsoft has a user based model too—its Microsoft Developer Network (MSDN) licenses. (We’ve discussed ways to better manage MSDN licenses in previous blogs). An understanding of software license models and related license entitlements is required to optimize licensing and control costs.

While the metrics are different, there are still similarities between these different license models. Let’s look at some examples:

SAP Named User Licensing	Device or Install-based Licensing
SAP users with active SAP user accounts consume a license regardless of whether their accounts are being used	Installations consume a license regardless of whether they are being used. (That's why its important to know about computers in storage that have installed software)
Each user consumes one license regardless of how many SAP user accounts they have	When granted, right of multiple use enables each license to cover multiple installations on a single computer
Each user consumes one license regardless of how many SAP systems they are using	When granted, right of second use enables each license to cover installations on both a user’s desktop and laptop computers
Optimization Strategies: Analysis of real SAP usage data can determine the most cost effective license type for each user based on the role they are performing and how they use the system Eliminate duplicate and idle users	Optimization Strategies: Analysis of real usage data can determine the whether the license can be reharvested and reallocated to another user, or maintenance costs can be reduced Leveraging product use rights, such as those mentioned above, can reduce license consumption and software costs

Regardless of whether a license model is user-based or device-based (or one of the many other metrics-- processor/core, PVU, Server + CAL, etc.), organizations should strive to pay only for software that is actively being used and fully leverage their license entitlements (e.g. Product Use Rights). For SAP Named User licensing, this requires the measurement of real usage patterns to select the optimal license type for each user (e.g. Professional, Limited Professional, Employee, etc.) For other vendors, such as Microsoft and Adobe, optimization must take into account Product Use Rights.

An enterprise Software License Optimization solution must also incorporate other capabilities such as discovery and inventory of non-SAP business systems (which, even in the SAP case, is important for SAP indirect access license management), contract management, business intelligence (for trend analysis, etc.), and advanced reporting.

FlexNet Manager for SAP Applications, part of the FlexNet Manager Suite for Enterprises, is an excellent example of this approach. In addition to providing the most comprehensive SAP license optimization solution on the market, its tight integration with FlexNet Manager Platform provides a broad range of additional capabilities mostly lacking in niche solutions.

Every major software vendor has nuances in their license models, volume purchase agreements, etc. that make them unique. Thankfully, there is a license management solution that provides broad vendor and application support while also offering the detailed vendor specific licensing knowledge required to achieve true Software License Optimization.

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Learn more about optimizing SAP licenses by viewing our on-demand webinar: Lifting the Lid on SAP Licensing.

How to Determine the List of Strategic Software Vendors

Flexera Software — Wed, 22 May 2013 14:43:47 -0500

By Natalie Overstreet Lias

In a workshop recently, I was asked a question I’d never considered in detail before. We were discussing a phased approach to Software License Optimization based on the software asset management (SAM) Maturity Model and “crawl, walk, run” to achieve success over the term of a SAM project. With that in mind, I’d suggested a focus on the organization’s top ten vendors. The question was, “what do you mean by top ten?”

It seems simple. Certainly, any software asset manager can typically identify, without any doubt, the four or five software publishers most critical to the organization. These publishers typically have some common characteristics: they are strategic to the enterprise and are widely deployed. They are present on most desktops or servers and underlie critical business functions. IT spending on these publishers represents over 50% of the total, and is often more like 70 or 80%. They are usually some of the biggest software vendors— for example: Microsoft, Oracle, IBM, and SAP. If an organization has a large commitment to Adobe or Symantec, these vendors may also be considered strategic by IT.

The identity of the “top ten” publishers beyond the most strategic ones may not be so obvious. IT spend on these is not a certain guide. If your organization has its top vendors under control, the metric used to identify additional vendors may not be current spend, but rather risk – this could be software audit risk or mission criticality risk. By the latter we mean that you may have some software that is mission critical for business reasons, for example engineering applications that are critical to meeting time-to-market goals. Here are a few things to consider when assessing areas of software risk:

It’s been said that relationships govern business, and the contract is what governs it if the relationship fails. If your organization’s relationship with a publisher is not great, especially if it has recently worsened for some reason, you should consider how you would respond to an audit from that publisher.
Some publishers consider audits a primary method of enhancing revenue. If you purchase software from one of these, even if the quantity is not large, the publisher will be aware the software is present in your environment. If the software is not well protected by individual license keys or other enforced license compliance, and especially if your environment does not have controls on who may install software, the software can proliferate. An audit in these circumstances can lead to disaster.
Don’t neglect non-IT purchases of software. Product design, engineering, and manufacturing environments can be significant software cost drivers. I have seen organizations where the annual R&D software spend was ten times the amount spent on all Microsoft software. But even if the spend is not high relative to the overall software budget, be sure to consider all of the mission critical applications, such as engineering design tools, as discussed above.

Remember – when thinking about your next Software License Optimization target, think in terms of managing your SAM program to deliver strategic value by not only reducing ongoing software costs, but also by minimizing risk.

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Learn more by viewing our on-demand webinar:
Top Tips for Surviving a Software Audit

Read previous blogs on audit trends and how to respond:
New Gartner Report Shows Software Audits Up Again in 2011
More from Gartner on Software Vendor Audit Trends and How to Respond
Notes from SAM Summit 2012—Software Audit Readiness

M&A is a Major Source of Software Compliance Problems

Flexera Software — Fri, 17 May 2013 09:33:00 -0500

By Randy Littleson

There's a great article on the FinancialDirector site entitled "Don't let software licensing fall between the M&A cracks" that clearly illustrates how M&A is a major source of software compliance problems.

As we talk to companies, a huge part of the problem is that they don't have a sufficient software asset management program in place to begin with. So, when you add an acquisition to the mix, things get really bad. The article rightly points out that understanding software licenses needs to be a part of the due diligence process. But doing so without a software asset management program already in place that is delivering continuous software compliance and optimizing your software spend for your entire software estate will still leave you with major problems.

A good place to start is by viewing our webinar series on Software License Optimization, starting with "How to get started with a software asset management program."

Garnering CxO Support for Software Asset Management Investments

Flexera Software — Tue, 14 May 2013 15:08:32 -0500

By Lisa Erickson-Harris

Software expenditures for most large corporations are sizable, if not dominant, expenses in the IT budget. New models for software licensing are evolving and arriving on the scene with cloud computing, software-as-a-service (SaaS) and other utility-based computing models offering lower points of entry and more flexibility for software acquisition. Yet, the total amount being spent on software is not expected to decline; in fact software spend is growing at about a 7% compound annual growth rate according to industry analysts. Software will remain a costly expense.

When it comes time to ask for budget dollars for a product that enables IT to manage its software assets, a strong case is needed, none the less. Corporate executives may be reticent to spend money on software whose main purpose is to manage license compliance for its applications and tighten control of these expenses. Yet, perhaps these two points are exactly the justification that will sell executives on the investment in software asset management (SAM) and license optimization.

Technologies such as network management, performance management and DevOps can be viewed as esoteric to those without direct need, making it difficult to build the case for products that are strictly behind the scenes. SAM, on the other hand, has the ability to show direct return on investment. Cost savings are easily achieved through the implementation of an effective software asset management and license optimization program supported by software and analytics. CxOs will always be open to improving financial results through reduced expense. The skeptical nature of corporate leaders will demand evidence.

Dollars and cents are at the heart of any strategy to secure budget for SAM and license optimization. Within the scope of that objective, a number of steps can be taken to establish credibility and gain executive support.

Establish credibility-Gather and provide data points even prior to purchasing and implementing a SAM and license optimization solution. In some cases, this will mean manually taking an inventory and comparing results to purchase orders and contracts. Convincing the management team that IT understands the volume of software licenses and the mechanics behind managing them will help to build the case that IT will also be able to take advantage of a tool that provides automation and analytics.
Educate executives about market norms and trends– Locate and share typical statistics on software investments such as how much overspending is typically done to avoid license compliance issues, which software suppliers typically pursue compliance audits (see this blog post), return on investment (ROI) for successful Software License Optimization programs (see this blog post on Building the Business Case for Software License Optimization), etc. This information can be mapped to your own software investments to show the risk and return in relationship to your organization.
Provide case studies to demonstrate potential savings-Ask solution providers for case studies, published or not, and then talk to users to gain additional insight into which products and priorities delivered the quickest results. Use this information in pitching your request for budget dollars. In some cases, you will need only charts and/or spreadsheets that show savings achieved in similar vertical markets.
Show examples of analytics-This information can be provided by your short-list of SAM and Software License Optimization vendors in support of your business case. Detailed examples provided by these vendors can show how analytical information will fuel contract negotiations and also reduce expenses for some specific categories of software applications used by your organization. Advanced license optimization tools have built-in Business Intelligence (BI) engines, such as Cognos, to deliver complex analysis and reporting capabilities that can now be applied to software asset management. Another category of “advanced analytics” is What If analysis that is used to see the impact of hardware and software changes on your license position, before the changes are actually made.

Software License Optimization plays directly into the requirement for IT Financial Management (ITFM) by adding business discipline to the function of technology management. Through license compliance measures that ensure contract requirements are being met and which mitigate unbudgeted audit true-up expenses, IT leaders are demonstrating a perspective that moves beyond technology for the sake of itself. Similarly, cost savings and due diligence are shown when IT professionals scrutinize software investments with the aid of sophisticated tools. The business case for purchase of Software License Optimization tools will become self-evident as IT Directors and CIOs communicate the business value.

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Learn more by reading our white paper: Moving Up the Software License Optimization Maturity Curve to Drive Business Value.

App Store Essentials: Using Your App Store to Aid the Software License Optimization Process

Flexera Software — Mon, 13 May 2013 09:57:46 -0500

By Laura Noonan

In many companies, more than one third of total IT spend goes toward software licenses. Software is a huge investment, so it’s no wonder that IT executives are looking for effective ways to optimize software license usage and minimize software spend. Consequently, an important goal within IT is to establish a comprehensive Software License Optimization process that aggregates, normalizes and reconciles software inventory, purchase order, usage data, license entitlement, product use rights and other information from enterprise business systems and determines an accurate license position. This enables the staff to maintain continuous license compliance and a state of software audit readiness in addition to reducing ongoing costs for software.

Your enterprise app store can be an integral part of your overall Software License Optimization program by helping you eliminate the waste that occurs when software that is installed on user machines sits idle. The software may be unused because the user has changed jobs. Or, it may be that the user needed the application for a particular project and, once the project was done, never used it again.

The good news is that an enterprise app store with the right feature set can help you track down unused software and then reclaim the associated licenses. The benefit: you spend less on software because you don’t buy additional licenses unless all the software you own is actually being used. Two features in particular are instrumental in helping you do this: License reharvesting and software leasing.

Let’s start with license reharvesting. Here’s how this feature helps you achieve substantial savings with respect to licensing costs:

License reharvesting leverages installation and usage data to automatically identify software that is deployed but unused. Usually the organization will specify a period of time, such as 90 days, whereby, if the software is unused during that period, it is a candidate for reharvesting.
You want to ensure your app store includes the ability to conduct automated email campaigns, so you can engage users in the reclamation process by sending them an email message that offers the option of keeping an application or surrendering it.
If the users opt to surrender the application, the app store then triggers a de-install of the application through your software deployment tool. The software license management tool will detect the removal of the software at the next inventory collection and should be able to automatically add the license back to the available pool.
Effective license reharvesting campaigns track user responses for you and provide full visibility into results, including how many users did and did not respond, the percentage of users who opted to keep or surrender the software and the users' justification for keeping software.

Now let’s look at software leasing. Leasing is particularly useful in project-based environments where application needs change as employees move from one project to another as well as in environments in which contractors are brought in to perform specific functions for a period of time. Here are some of the ways leasing helps you keep license costs in check:

Leasing gives users access to an app for a limited period of time, after which the license is reclaimed automatically unless the user extends the lease.
An effective leasing capability gives you the flexibility to set a maximum lease time and a default lease time based on the needs of your business.
When a lease is about to expire, it’s important to have an automatic notification capability so users aren’t caught off guard and they can extend the lease if necessary.

As you can see, license reharvesting and software leasing options give you a real edge in optimizing usage and spend by reclaiming unused licenses so you can assign them to users who need them. Some companies report that they were able to recoup the acquisition cost of their app store solution within six months simply by using the license reclamation capability.

Read the next blog in the App Store Essentials series, “Connecting Your App Store to IT Service Management Systems,” to find out how integrating your app store with IT service management systems such as BMC Remedy, ServiceNow and Microsoft Service Manager brings the app store into your service management processes to ensure that software delivery complies with corporate policies and external regulations.

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To learn more about software license optimization, please view our on-demand webinar: Go Beyond
Traditional Software Asset Management with Software License Optimization

Managing Software Assets as Enterprise Software Evolves

Flexera Software — Thu, 09 May 2013 08:18:51 -0500

By Randy Littleson

An interesting article over at ZDNet entitled “The Evolution of Enterprise Software: An Overview” provides some interesting insights on how enterprise software has been evolving and some of the challenges it introduces to the typical company. The one section that particularly caught my eye was the author’s comments on software licensing. He stated:

The licensing terms for enterprise software can be convoluted, particularly where large vendors have incorporated multiple acquisitions, each with their own licensing schemes, into their suites. This can lead to significant non-compliance charges for clients with less-than-perfect software asset management tools.

The reality is that most large vendors have grown through acquisition and even when they don’t, they have multiple products with varying licensing models and even multiple models per product in an attempt to cover all the use cases as demanded by their customers.

Managing this manually is close to impossible. Being able to proactively manage your software estate to ensure continuous compliance with software license agreements and optimizing your software spend requires a program that:

Combines clear organizational ownership with
Best practice software asset management (SAM) processes
Supported by the right technology

The software asset management and Software License Optimization technology can be a huge benefit by incorporating high value libraries that contain software product-specific and vendor-specific licensing "knowledge". The tools can do this in a way that “productizes” essential information that would be virtually impossible to manage and leverage manually. The software license management (license reconciliation) process entails collecting, normalizing and then comparing both inventory data and license entitlement data (purchase orders and contracts) to understand your license postion. The value to an enterprise comes in the form of software licensing analysis and insights drawn from the automated application of the built-in knowledge in the libraries during the license reconciliation process.

Software license management across a typical software estate is becoming more complex due the use of new technologies, such as virtualization, that create highly dynamic IT environments, constantly changing license rules and the growing complexity of software license models and agreements as vendors seek to address all possible scenarios. The key to coping with this from an enterprise perspective is to have a global software asset management program that incorporates best practice processes, appropriate oversight and ownership by people in the organization, and automated by underlying Software License Optimization technologies that bring together the required information to facilitate decision making.

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To learn more, please read our white paper: Moving Up the Software License Optimization Maturity Curve to Drive Business Value.