Software License Optimization

Software Asset Management Best Practices—Policy, Process and Hardware Asset Management

By Jill Powell

Software asset management (SAM) best practice principles that companies should adopt include:

• Manage hardware assets effectively throughout the full asset life-cycle
• Define software application requirements (i.e. which applications, versions and editions should be purchased)
• Centralize purchasing and maintain a central license repository
• Collect hardware and software inventory (including physical and virtual machines)
• Reconcile installations against purchased licenses
• Manage software maintenance
• Apply license entitlements to minimize license consumption

These are all necessary and important steps to adopting best practice-based software asset management. Let’s look at the first step.

Manage the hardware asset life-cycle

An important starting point when adopting a software asset management best practice strategy is to establish control of hardware assets throughout their life-cycle. Understanding what hardware is deployed is essential to understanding what software is installed and is critical for optimized license management. However, managing the hardware asset life-cycle can be highly challenging. Large organizations don’t always have visibility of the hardware deployed and so making use of an inventory tool can be an eye opener in terms of discovering previously unknown devices. However, many inventory tools don’t manage virtual machines or non-Windows machines very effectively, and may not fully support complex license metrics. Only a next generation software asset management tool can truly provide a complete view of the hardware and software estate.

Such a tool requires integration between the hardware and software asset management functions. In addition, these software asset management and license optimization tools must integrate with other IT systems such as procurement, Enterprise Resource Planning and Human Resources. In fact, IT Infrastructure Library (ITIL), a standard that outlines how IT infrastructure should be managed effectively, lists integration with other IT systems and processes as being key to the success of any software asset management program.

Understanding hardware inventory is a useful indication of where a ‘software liability’ may exist. But aligning this against purchase quantity is not by any means a one-to-one relationship for a number of reasons—such as different license metrics and software product use rights, for example. Nonetheless, having an accurate grasp on hardware assets is crucial. This includes assets that are yet to be installed along with those that are no longer active on the estate. Some common gaps in managing the hardware asset lifecycle that pose some level of risk to an organization include:

Purchased hardware not yet active on a network

Hardware that has been purchased, but not yet used can represent a significant, but largely under-managed capital value.

Hardware currently in storage

Hardware assets in storage with software installed still represent a legal license liability. This means that the software on an unused hardware device must be counted as part of any software vendor audit even though the device itself is not active. Software must be wiped as the hardware asset goes into storage in order to reduce software license compliance risk and enable the companies to re-harvest the licenses for use elsewhere.

Hardware that has been retired

Many companies are not vigilant about tracking retired or disposed hardware assets. Although the computer is no longer active, its status is frequently not updated. Worse still, installed software on retired computers is often not tracked or re-harvested. This represents a potential cost risk to the organization as new licenses for the same software may be purchased unnecessarily. Original Equipment Manufacturer (OEM) software, which comes pre-installed on new machines, is typically not eligible for re-harvesting, but many other applications are candidates, and leveraging the ability to re-harvest facilitates significant cost savings.

Best practice requires that organizations accurately account for hardware assets at the end of their life-cycle. Organizations in European Union countries should consider the Waste Electrical and Electronic Equipment Directive (WEEE) for disposal processes.

 [This is an excerpt from my recently published National Computing Center (NCC) Guideline for IT Management: Software Asset and License Management Best Practice. You can find the full document here. Stay tuned for more excerpts and related commentary in this blog.]

Software Asset Management Best Practices—Measuring Maturity

By Jill Powell

To implement an optimized software asset management program, it is necessary to understand the maturity and effectiveness of your existing asset management processes. By reviewing the policies and processes already in place, an organization will be able to identify areas for improvement and/or resource gaps. This in turn will facilitate corrective action to reduce the costs and risks associated with the management of IT assets and promote adoption of methodologies for improvement.

Here is a 4 step process for software asset management assessment and improvement:

• Identify where strengths and weaknesses exist within current processes
• Perform a ‘gap analysis’ between current processes and best practice
• Decide a strategy for improvement that will offer the best possible ROI
• Continue to make regular assessments and analyses of processes

Identifying where strengths and weaknesses lie within the organization requires maturity assessment modeling. An organization should devise a set of key questions around various aspects of its IT processes and best practices to measure their maturity. Key stakeholders should then be asked to answer these questions independently of each other.

Typical questions include:

• Is there a written software asset management policy?
• Do we have a senior executive sponsor within the organization?
• Is there a policy for authorized software?
• Is there a central license repository?
• Are unused licenses re-harvested?
• Are staff members able to install their own software onto PCs?
• Do we have a tool for managing and optimizing software licenses?
• Do we understand and apply license entitlements?
• Do we have an authorized vendor/supplier list?
• Do we purchase software centrally?
• When a computer is retired, are the associated licenses recycled?

The collated results can then provide an overall perspective of where areas of weakness or risk may lie within the organization.

Once the key areas of weakness have been identified, a gap analysis methodology should be adopted. A gap analysis will highlight where the organization is and where it needs to be. The ISO 19770-1 standard offers an approach to measuring such process gaps.

Background on ISO 197700-1

ISO 19770-1 provides companies with a measurement to establish performance against an agreed standard of corporate governance, lifecycle management and effective IT service delivery. [Note: ISO 19770-1 is currently undergoing a major revision— see Tiered SAM Processes.]

The ISO standard defines software asset management as:

“Processes and resources to help firms oversee and control their various assets and inventory throughout their life cycle.”

The ISO 19770-1 standard incorporates 27 key components of software asset management that define processes and data technologies that are key to an organization’s software asset management program.

These components are grouped into three key areas:

1. Organizational Management Processes for Software Asset Management

This encompasses broad management processes such as defining policies and procedures or defining a corporate governance initiative and the software asset management project lifecycle.

2. Core Software Asset Management Processes

These are key processes for software asset management such as software asset inventory and identification or interfaces to other systems like financial systems for key data needed to assess software entitlements and compliance

3. Primary Process Interfaces for Software Asset Management

This defines key interfaces to other systems that are not as critical to key software asset management. Using the ISO standard to measure against process gaps offers a framework for an organization to easily identify where they are and where they need to be. It also helps to identify the challenges faced when adopting a best practice approach.

 [This is an excerpt from my recently published National Computing Center (NCC) Guideline for IT Management: Software Asset and License Management Best Practice. You can find the full document here. Stay tuned for more excerpts and related commentary in this blog.]

Software Asset Management Best Practices—Getting Started

By Jill Powell

Software Asset Management is generally understood as the process of maintaining software license compliance and avoiding over spend on software licenses. However, software asset management includes much more. It is a set of best practice processes that touch a great number of functions within an organization. Software asset management processes integrate optimized license management with existing IT systems such as Configuration Management/Inventory tools, Enterprise Resource Planning (ERP), Procurement, Human Resource and Service Catalogue/Helpdesk to allow the collection of the vast amount of data needed to effectively manage a software estate.

Software asset management requires a combination of people, processes and technology to gain optimum efficiency – from both a risk mitigation and cost management perspective. Key to a successful software asset management strategy is having the right people and resources in place to ensure that assets are managed and roles and responsibilities are clearly defined so that daily tasks are performed seamlessly. Also critical is having the technology in place to manage the IT estate effectively – both to discover what hardware and software is installed and to have the ability to fully optimize the IT estate. Good processes are then essential to bring people and technology together to form a best practice based implementation.

Getting started on a best practice-based approach to software asset management

Taking a best practice approach, first and foremost, requires an understanding of the extent of the challenge. Common questions may be:

• Do we really know how many PCs and servers we have and where they are located?
• Do we know what software is deployed?
• Are we counting our entire virtual or thin client infrastructure?
• Do we understand what we are purchasing? Do we have adequate records of what we are purchasing?
• Do we know what we are ‘allowed’ to use? That is, do we understand our license entitlements?

Adopting some practical methods for addressing and improving asset control is required, yet companies often mistakenly try to tackle all aspects at once. An organization should assess their key areas of risk. This could be based around specific software vendors with whom the expenditure is high or there is a strong likelihood of a software audit. Alternatively, the decision could be based around certain contract renewals. Any of these areas are a good place to start. Reducing the problem to manageable chunks offers a much greater chance of success.

Taking on a best practice methodology at the right level in the organization is also a key factor. If there is no adequate executive level backing, then adopting software asset management can become a largely ineffective project. Because software asset management is a matrix of processes, taking a holistic look at all key business areas and identifying practical ways to adopt change can only be successful if those responsible for identifying gaps are given the support and backing at a senior level. Ultimately, software asset management requires change to be facilitated across a broad set of business functions within the organization.

[This is an excerpt from my recently published National Computing Center (NCC) Guideline for IT Management: Software Asset and License Management Best Practice. You can find the full document here (there is a small fee for non-members). Stay tuned for more excerpts and related commentary in this blog.]

WEBINAR: Pure Gold—Leveraging Software Usage Data to Reduce License Costs and Risk

By: John Emmitt

Join us for an IAITAM sponsored webinar on March 31, 2011 Space is limited. Reserve your Webinar Seat Now at: https://www2.gotomeeting.com/register/399469858

Many organizations either have a concurrent license management solution or could benefit from one. These tools track application usage and ease license server administration.  This software usage data is “Pure Gold”. In this webinar, learn how to leverage this data to: -   Determine Software Mix Requirements -   Lower Costs with Effective Peak Analysis -   Avoid and Survive Software Audits (yes, there can be compliance issues with concurrent licenses) -   Support Mergers, Acquisitions, and Divestitures Our guest speaker is Dan Griffith, former head of the Comprehensive Software Asset Management Team (CSAM) at Motorola/Freescale, where he managed software licenses from 52 vendors and supported more than 5000 users in 12 countries. Please join IAITAM, Flexera Software and Mr. Griffith for this educational web event!   Title:   Pure Gold—Leveraging Software Usage Data to Reduce License Costs and Risk       Date:   Thursday, March 31, 2011       Time:   11:00 AM - 12:00 PM EDT       Register Now: https://www2.gotomeeting.com/register/399469858

Software licensing agreements—the modern day Gordian knot

By: Vincent Brasseur

Being able to clearly understand the entitlements attached to every software title has generally been a domain reserved for licensing experts able to decrypt legal terms and conditions and tie them to technical details of the application. These, in turn, are tied to the complexity of the Information Technology environment. All these difficulties may be aggravated by the lack of a single document providing all the information needed to comprehend a software license agreement. Most vendors use a combination of written documents, click through agreements (I truly believe no one has ever read one from start to end) and online pages (usually hard to find unless you are extremely lucky) to describe terms and conditions and the rights of use of a software license. There are many reasons to justify the existence of these multiple documents:

• The software license is usually purchased as part of a volume agreement or purchasing program. These programs have specific rules as written in the contract documents. For instance, a license purchased under an Adobe CLP agreement will provide the right to use the software on Windows or MAC operating systems. A Microsoft Select Agreement will provide second use rights for most desktop products—allowing the installation and use of the software on a second machine (e.g. a laptop computer) under a single license.
• The maintenance agreement will also alter the right of use as it generally includes access to patches, fixes and service packs as well as upgrade rights to the latest releases.
• The support policies may be described in a specific document.
• Legacy licenses have their own set of documents and may or may not be impacted by the latest maintenance or licensing agreements.
• Rapid changes in technology and delivery models such as virtualization, cloud computing, processor performance and server architecture require publishers to adjust their policies on a regular basis. Examples are numerous: Microsoft publishes a Product Use Rights document on a quarterly basis, IBM stores its Processor Value Unit (PVU) table online, Symantec has a spreadsheet for tiered licenses tracking the value for each computer model.

Your organization can negotiate with each vendor and make sure all terms and conditions are included in the license agreement. Vendors will usually push back on this, but most will, at some point during the negotiation, agree to a single document.  However, such a requirement is time and resource consuming for the company. In many cases, the written software licensing agreement is not the only document that counts. It may or may not refer to additional documents, some of them made available on line by software publishers and updated on a regular basis, as noted above. Not only is a detailed analysis of all documents required to fully understand an entitlement, but your organization may need to re-evaluate on a regular basis to apply changes made by publishers.

Your software asset management system should be able to periodically and automatically adjust to changes made by publishers in order to provide the most accurate software license position for the enterprise. It must also include support for legacy terms, conditions and license metrics, as they may still be in use. Furthermore, it needs to be flexible enough to accommodate specific terms and conditions negotiated with vendors in customized agreements. Thus, an automated license management solution is the sword needed to cut today’s Gordian knot—the complex license agreement!