This post begins a new blog series covering the changing world of Software License Management (SLM) in the Telecommunications and Networking space. A lot of content surrounding SLM exists, but the vast majority is from the software vendor’s point of view. Why should they license their software? What are the best practices for implementing it? How do you keep your own customers from stealing from you?
This series will look at the evolution of SLM from a different perspective. What does it mean for you the customer? Why are vendors migrating to software licensing? And most importantly, how do you, the customer, shift the increased use of Software Licensing to your advantage?
What you don’t know CAN hurt you
The fact of the matter is change is coming, and the market demands it. New requirements in purchasing the correct licenses, deploying the correct licenses, and keeping track of your license usage will be imposed upon you. Without an effective Software License Management program it is easy to expose yourself to an audit, through either over or under purchase of licenses.
The History of SLM
Not long ago you had very little software licensing to deal with on hardware-based telecommunications products. At the time, only 5-10% of the cost of an average telecommunications device was attributed to software. With the advent of SDN (Software Defined Networking) and VNFs (Virtual Network Functions), revenue from software licensed components grew to 40-50% of product cost, if not 100% in some instances. This was further increased by the vendor trend of selling hardware below cost with locked features. What was previously unimportant suddenly became the main revenue driver.
As a result, vendors began locking down their software licenses. Initially this was done with hard lock & key enforcement, but the operational costs imposed on the customer were immense and push back was immediate. Many vendors attempted to go the opposite direction and returned to paper licenses with no enforcement at all. This removed the operational expense, but now imposed the complete burden of tracking license usage on the customer. Compliance is generally ensured through the End User License Agreement by threatening contractually allowed audits. This worked for a while, but as license models increased in complexity (ELA/EAs, Post paid models, try and buy, etc) developers transitioned to the current trend of a report-in or call-home strategy for on-premise products (example: Smart Accounts and Smart Licensing from Cisco, Titan from Versa, etc) and a direct license model for most SaaS products.
A confusing ecosystem of products from various vendors has been created, each with their own mode of software licensing. It can be a challenge to even get the very simple answers you need to run your business. What did I buy? What am I using? This is the role of Software License Management (SLM): deriving order from the chaos.
As this series continues, we will explore deeper topics.
- Defining a taxonomy around Software Licensing
- Discussing how to efficiently make Software purchases, ensuring you buy what you need, but staying out of the audit crosshairs
- Introduce you to emerging industry standards attempting to bring order
I hope to see you there.
RAY ALLEN found a basic niche in asset lifecycle management but has had the opportunity to grow with the industry, now offering an innovative variety of management services. Learn more here.