Office applications Toolkit

Software licensing is a serious business

Bert Young and Tom Davis for ZDNet.com ZDNet US

Published: 12 Jun 2003 14:58 BST

Jim Doe could very easily be you.

He is a systems administrator at a large sales and service company with 5,000 employees, more than 100 software applications and dozens of branch offices. Business is down, the pressure up. Managing his systems and networks for LAN workers and road warriors is no small task. And now his CFO and CIO have mandated cost-cutting measures while crowing about maximising existing IT resources. He has a sinking suspicion that the company has hundreds of unused copies of Microsoft Project, which means wasted money and upset bosses. What to do?

Companies are increasingly being asked to control costs and prove they are getting the most value from their hardware and software purchases. Tens of thousands of pounds can be realised by tracking the true software usage against current licence levels, ensuring that annual licence costs are in step with the actual usage of the application. By monitoring not only which applications are installed on each machine, but which ones are actually being used, IT administrators can report on which licences need to be renewed each year or shifted to other departments.

Software licensing management also helps prevent illegal software, a growing problem that hurts not just software providers but ultimately the customers. Illegal software use is not a trivial matter. For businesses, illegal software use poses dangerous vulnerabilities. Even if a company is unaware that they are violating a licence agreement, they are at risk for expensive audits, litigation, and penalties. Many companies purchase and install more software than they realise or need. One reason for this variance is comes from unauthorised installation of software by employees. With the widespread adoption of the Internet, the downloading of unauthorised software has dramatically increased.

The risks of software noncompliance are serious. Both the SPA Anti-Piracy (a division of the Software & Information Industry Association) and the BSA (Business Software Alliance) are stepping up activities to combat software piracy. If a business is audited by one of these bodies, it not only faces possible penalties, but also must face the disruption and costs of achieving compliance.

The four fundamentals
Software licence management represents a shift in software management practices. Previously, companies would monitor the "concurrent usage" of an application and implement a restrictive tool to prevent unauthorised use. Now the preferred model is a shift to "installation" based licensing or a passive model.

Software licence management benefits companies and IT organisations in several ways: 1) Ensures the organisation is legally compliant with its software licensing and eliminate the financial (and other) risks of noncompliance; 2) Saves money on software purchases and planning; 3) Boosts productivity and reduce costs by eliminating overbuying and deployment costs.

There are four fundamentals to ensure that your software licence management helps achieve your goals.

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