In this digital era, the software runs the world. For every day to day activity a corporation gets involved in, there’s some software aspect at the core of it. There is a software program running to ensure it goes successfully from something as familiar as database management to the most complex operations like Artificial Intelligence.
Now, not every company can develop their software. It takes many resources, starting with the expert knowledge of a developer to the infrastructure used in developing and testing out the software before it can be put to work and many other things. Plus, with different operations needing different software, it wouldn’t be feasible for a company to design a program for every one of its functions (in the region of hundreds).
This is why most companies would instead buy already developed software from specialized developers. We have Microsoft, Apple, Oracle, SAP, and Adobe distributing their software to thousands of corporations, both big and small, too different corners of the globe from Asia to Africa, Australia to Europe, and even the Americas. These corporations would much rather pay to use the software as it is less costly and they are guaranteed quality than try and use their resources to create a unique program.
- 1 Software Licensing
- 1.1 Software License Management
- 1.2 Foundation of Software License Management
- 1.3 Need for Software License Management
- 1.4 Best Practices in Software License Management
As earlier mentioned, all these companies that develop the software have to charge a fee for anyone that intends to use it. Otherwise, how else would they generate the revenue they need to continue improving on their product? Some of them offer their effect on a one-time purchase where you buy once and can use it for as long as you like. Others offer theirs on a subscription basis whereby you pay a prescribed fee weekly, monthly, annually, etc., while others issue licenses for the use of their program, and corporations have to purchase and renew their licenses regularly.
To some, software licensing is the most complex one because there are a lot of technicalities involved. Different companies have different terms and conditions for the usage of their licenses, and it’s not the case of one size fits all. Depending on the licensing agreement, some corporations have the rights to reproduce and issue licenses, while others can be sued for the same act. These differences tend to bring about plenty of licensing issue. We read on the papers that a particular software developer is issuing one of their clients on matters concerning their software’s illegal use every now on then.
The root of these disputes tends to boil down to a company intentionally or unintentionally breaching the software user agreement with their provider. In other words, a lack of compliance. Some software companies, a good example being Oracle, tend to conduct regular audits on their client to determine if their software usage is up to standards. When they find a problem somewhere, for example, unauthorized distribution, they have grounds to bring in legal action.
Software License Management
To avoid such consequences, most corporations bring in software license management. These are the tools and processes used to document and manage software licenses to ensure compliance with the developer’s software license. It gives companies transparency into their software assets, usage, grants, and contracts so that the managers can understand what software is being used, how much, where and by whom.
Foundation of Software License Management
Software license management is driven by three major factors; compliance, optimization, and savings.
● Compliance: This includes the usage of software programs following the terms of agreement with the provider. The central part of it involves controlling risks, costs, and complexity through transparency.
● Optimization: Companies should aim to get the most of their software licenses by knowing the provisions included in terms of the agreement.
● Savings: This majorly focuses on using insights to save on licensing costs where they are spending needlessly.
Need for Software License Management
Software License Management is a business strategy that reclaims budget and maximizes savings by actively controlling and automating procurement, usage, and software licenses deployment. Companies with a software license management strategy in place are empowered to make better software licensing decisions that lower costs and protect their investment.
Best Practices in Software License Management
Knowing the fundamentals of software license management and why it is essential for companies, it is time to determine how companies should go about software license management. What are some of the things they should always have in mind, and what are the best practices to ensure that they can reach the goals set out to achieve? Here are some of the things you ought to do to get the most out of your software license management.
● Perform A Compliance Audit
Instead of waiting for your software provider to do an audit and potentially find you for lack of compliance, why don’t you do an internal one? This will show you all the different programs you have installed and in use, as well as the allotted entitlements. With that information, you can establish an Effective License Position (ELP), which is the first step to software license management.
● Organize Your License Inventory
Create a central license inventory (if you don’t already have one) and transfer all the existing licensing agreements and software maintenance contracts to the list. From then on, establish a system (one that you and other people who have access to the inventory will understand) that will allow you to locate any license related information and documents quickly. Find out what your license metrics are to know the type of license you need, and then get a professional to maintain the inventory if you can’t do it by yourself.
● Determine Software Usage
A common occurrence is that most companies pay for a lot more than they use. In other bizarre scenarios, companies pay for software they don’t use but then use the software they haven’t paid for. Avoid this. All you have to do is catalogue your software under different titles and match a software license. After that, try and find out when a software title is being used and how it’s installed, configured, and accessed. You might be surprised to find out how little the software you own is being utilized.
● Measure How Many Licenses You Need Per Software
After creating inventories, cataloguing your software and their licenses, and determining the software usage, it is time to use all that to find out what you need and what you don’t. Using the metrics stipulated by your license provider, measure how many licenses you need per, depending on the software usage. Make sure to apply product use rights to get the full value of your licenses and save costs. Here you can then cut down on unnecessary costs.
● Keep Updating Your Inventories
Now that everything is done, it is essential to ensure your inventories and data is updated. If you acquire another company or merge with another corporation, an entire review will be needed to ensure that you comply to avoid licensing issues.
Software licensing can be rigorous, and lack of compliance could cause significant damage to your bottom line. Always make sure that you comply with the licensing agreements and, if possible, hire experts to take care of that side of operations. With that, you will be protecting your company from any suits or financial penalties.