In my first post in the calculating product audit risk (PAR) series, I discussed how organizations should have two different strategies for managing their overall software estate. For the set of products where the value to the business or the risk of non-compliance is high, we suggest a “manage the product” approach. For the rest of the software portfolio, we suggest a “manage the risk” approach. To help differentiate between these two segments of the overall estate, we introduced the PAR value.
As a reminder, here is the PAR formula:
In general, the PAR value is meant to quantify the relative financial risk a product represents within the overall software portfolio. But before you can complete the math, you need to know where to find the factors that go into the equation. Here’s how: Continue Reading…
When it comes to compliance risk, we suggest that organizations craft two very different strategies for their overall software estate. Depending on the software, companies should either manage the product or manage the risk.
Manage the product
For high-risk, high-value software products such as Microsoft SQL Server, IBM Websphere, and Oracle databases, companies should pay careful attention to what licenses are bought and allocated and how they are being used. Because these products represent a relatively large portion of software spend and compliance risk, the products should be watched and managed individually and reviewed continually to ensure license utilization is high and compliance risk is low.
Manage the risk
Lower cost or lesser risk software products generally don’t need the same level of attention. Because costs or compliance risks are relatively lower, these products represent a much smaller financial risk to your organization. Managing this group (which could include thousands of software titles) in the same way as high-value products is difficult and unnecessarily expensive. A more efficient approach is to set reasonable, firm policies to guide proper usage and compliance and then conduct occasional spot-checks to find and rectify situations in which those policies were skirted. Since this approach carries a bit more compliance risk, consider setting aside a small opportunity fund to deal with over-deploys or an adverse audit finding. Continue Reading…
Effective IT asset management hinges on flexibility and accuracy. Organizations that can quickly transfer software or hardware between users can keep up with changes in projects, responsibilities, and personnel. The introduction of Adobe Creative Cloud with subscription-based licensing simplified software deployment and the delivery of updates, but also left organizations confused regarding transfer rights.
I recently spoke with clients struggling to transfer or reassign Adobe Creative Cloud subscriptions from one user to another via Adobe.com. After investigating, I discovered that in each instance the software subscription was licensed for an individual instead of a team.
While Creative Cloud for individuals is perfect for small shops or freelancers, Creative Cloud team licenses are the optimal choice for creative groups within larger organizations. Team licenses give management full access to an administrator console that allows them to add, transfer, or revoke licenses as needed.
Team licenses are available under the Adobe Value Incentive Plan (VIP) program, an evergreen program that doesn’t require a minimum purchase. Customers receive one agreement number upon purchasing, and anything acquired throughout the year is co-termed with a single anniversary date. This allows for greater budget predictability, ensures compliance, and fosters collaboration among workgroups without sacrificing immediate access to the latest and greatest Adobe technology updates. Continue Reading…
Managing all the hardware and software assets for an enterprise workforce is no easy feat. A large organization must manage thousands or tens of thousands of employee devices, all of which are loaded with myriad software subject to various maintenance dates, combinations of licensing agreements, and therefore a multitude of licensing rules.
With so much technology under one roof, it’s easy for a licensing event to slip through the cracks and harm an organization in the long run. For example, the use of unlicensed software could expose organizations to hefty fines and leave companies scrambling to purchase new licenses to bring them into compliance. Not only do missed events hurt an organization’s bottom line, they also damage corporate reputations and can increase scrutiny from other manufacturers and vendors.
To help customers avoid the risks of non-compliance and give them a better understanding of their software entitlements, SHI offers several tools that provide complete visibility into the software and quantities an organization is licensed to use. Here are two of the best: Continue Reading…
If your organization always wants the latest and greatest products and most up-to-date support, chances are you buy your software and hardware maintenance from various manufacturers. The question is: How do you manage all of your purchases while ensuring you’re not overspending?
Renewal management can be complicated, involving a kaleidoscope of factors that can turn a simple process into a field full of potential land mines, including overspending and non-compliance. Here are some of the challenges IT organizations face while managing renewals and how to solve them.
1. Myriad buying programs. Every business unit has its own unique mix of hardware and software needs. When it comes to licensing Microsoft products, for example, some organizations excel with an Enterprise Agreement (EA) to license a particular number of seats at any time for any product. Other organizations utilize a Select Agreement to buy what they need when they need it. With other publishers, some parts of your organization might still rely on perpetual licenses while others need options like the subscription-based Adobe Creative Cloud. The range of potential ongoing agreements in any company is vast, and renewal dates are unlikely to align, creating the potential for under-licensing or budgetary “gotchas” if the various renewal dates aren’t closely tracked.
2. Multiple employees managing buying programs. Larger organizations have licenses with more manufacturers and for more products than any one person can manage alone. Of course splitting the workload, whether by division or manufacturer, reduces visibility into organization-wide renewal dates. Having employees manage licensing in a silo also limits potential cost-savings and cost-avoidance advantages for future licensing, as employees might not be aware that their combined purchases qualify them for the next level (price break) of cost-savings. Continue Reading…
Remember the good old days when you likely had a simple choice between two volume licensing programs to license your Microsoft software: Select Agreement or Enterprise Agreement? Over the past three years, Microsoft has introduced new volume licensing program options that have provided organizations with more flexibility, but have also added another layer of complexity to the decision-making process. Most recently, Microsoft announced a new program called Server and Cloud Enrollment (SCE) slated for availability in the fourth quarter 2013, adding even more choices to its volume licensing pool.
SCE is designed to simplify the program terms, pricing, requirements, and decision points for organizations interested in committing to the products and technologies offered under this enrollment. As with any significant change, it is important to understand how organizations currently procure their licenses and how that process will change in the future.
Today, Microsoft offers organizations the ability to procure licenses under single or multiple enrollments depending on various factors, including:
- License, License and Software Assurance, Subscription
- Commitment terms (e.g., enterprise wide vs. buy as you go)
- Price discounts
- Bundled vs. single SKUs (e.g., Core Infrastructure Suite vs. Windows Server)
- Program benefits (e.g., Software Assurance benefits)
- True-up terms (e.g., one year vs. three years)
When you factor in the various volume licensing vehicles that Microsoft offers, IT and procurement managers must weigh a complex set of options during their decision-making process. Today, organizations with more than 250 desktops have the following enrollment types available to them to procure their Microsoft licenses and services: Continue Reading…
If your company has uncovered issues in underlicensing or overspending on software licenses — or even if you just want to be more proactive about IT needs – it’s time to rein in renewal management. Renewals can hit your company throughout the year from various vendors for everything from software maintenance to hardware leases. Even original equipment manufacturer (OEM) warranties eventually expire and create a need for a new warranty or new equipment.
The problem is that many companies fail to track these renewal or expiration dates. When the invoice for a renewal arrives without advance notice, they simply pay it based on their past agreements without stopping to think strategically about current and future needs. The issue is only exacerbated by the adoption of the cloud as perpetual licenses, which have no expiration date, get replaced by subscription and term licenses, which do expire.
By tracking expiration and renewal dates, as well as key dates internal to your company — such as when budgets are set — you can replace the reactive response to renewals with a more proactive stance that will not only potentially save your company money, but equip employees with the tools they need to do their jobs.
With advance warning of impending renewals, IT and procurement can take time to analyze and discuss any renewals, negotiate new agreements, or vet alternative vendors or solutions that better suit the state of your business. For example, your company might need to right size the number of commitments it has, reducing software maintenance to 800 desktops from 1,000.
Here are four points you should consider before renewing: Continue Reading…
You might have a million dollars just sitting on a shelf in your IT department. That’s the savings realized by one company that dug into its software licenses, found that it had more licenses than it was using, and pushed forward an active redeployment program to get the idle software back into circulation. And while this was obviously a larger organization, many companies can realize a 2-5 percent savings by reclaiming and redeploying their unused licenses.
Unfortunately, many companies unwittingly throw away that savings by purchasing new licenses rather than reusing their dormant ones. The problem is that the process for software procurement is typically isolated from the process for redeployment of unused licenses. When new employees join the team, they often bypass IT, where the extra licenses live, and go straight to procurement, which spends money that might otherwise be saved through redeployment or an upgrade of an existing license.
While there are several options for overlicensed companies, redeploying unused licenses not only saves money, but can also optimize your procurement of other IT assets – realizing further savings by procuring hardware compatible with existing and unused licenses. Here’s how to jumpstart a redeployment program at your organization. Continue Reading…
We recently calculated the costs and compliance risks of under-licensing software. But using more licenses than you’re paying for shouldn’t be your organization’s only concern. Almost every customer we come across is also over-licensing products in some situations. That is, they have purchased more licenses than they actually need.
How does this happen? Let’s say one of your employees retires or moves to a different company. She returns her computer (and the software licensed to it) to her IT department, which shelves the assets for future use. The next week, your company hires someone to fill the role. But, when that person is ready to set up her work station, she doesn’t go to the IT department. She goes to the procurement department, which purchases new licenses for her to use. Or, in another common scenario, the organization downsizes and the software gets “lost” in the confusion of the moment. The result is unnecessary outflow of cash and an unused stock-pile of licenses.
While this might not seem like a big deal at first glance, the costs of licensing over-compliance can negatively impact budgets, projects, reputations, and careers. Over-licensing software doesn’t have the same immediate, negative impact of under-licensing or an audit, but it can slowly drain resources from more productive uses. And the problem tends to self-perpetuate: Buying too many licenses in the first place very often results in buying too much maintenance year after year.
When idle licenses are uncovered, certain questions invariably arise: How much did the unused licenses cost, and what other projects were cut or had their budgets slashed in order to cover the expense? Who sanctioned this purchase? Why don’t we have better records on what we own and what we are using? And lastly, now that we have identified all these unused licenses, what do we do with them?
Organizations that have a surplus of unused software licenses have four options: Continue Reading…
When it comes to software licensing compliance, manufacturers are stepping up their game. All the major software vendors are ramping up their audit frequency. Gartner and other industry pundits have noted this acceleration for the last few years, and there doesn’t appear to be any slackening of the pace. Just as notable, software vendors are also increasing the intensity of their audits, digging deeper and harder into some of the areas in which they’ve traditionally given customers some leeway.
Most of the penalties a customer can suffer from a manufacturer audit are not immediately apparent or quantifiable. Nonetheless, there are very real costs for poor software license governance and manufacturer audits. They include: Continue Reading…