Software Licensing Featured Articles

Are Software Licensing Concerns Standing in the Way of Consolidations?

By Carrie Schmelkin, Director of Content Marketing, Content Boost

As AMD (News - Alert) starts to seriously think about whether it can consolidate its six data centers around the world, one important question still remains: what will the software licensing costs and taxes be if this plan goes through?

For AMD, there are huge benefits to consolidating its data centers, namely being able to maximize resources such as CPUs and server space and enjoy reduced date center power consumption. Moreover, the company will reap CAPEX and OPEX (News - Alert) advantages.

However, the company is still teetering on the fence about whether to go through with the plans because of the software licensing fees and associated taxes. According to a recent blog post, the company’s 3,000 engineers use electronic design automation (EDA) software tools whose licensing fees are expensive, and apparently those costs vary depending on geographic location.

Moreover, AMD’s Corporate Vice President for global infrastructure services Tom Painter, said that, "A lot of governments are looking at ways to exercise their taxing authorities” by collecting taxes on those licenses.

With the market rapidly evolving, software licensing has become increasingly complex. While software vendors work to remain competitive and be leading innovators, they often grapple with how to make sure they are fairly compensated and that they retain all of their customers. According to Business Software Alliance and IDC (News - Alert) research conducted in 2009, 41 percent of software installed is illegal, costing software producers nearly $54 billion annually in lost revenue.

Software licensing is critical for application producers for a number of reasons: it helps their customers to stay in compliance; it provides flexibility in monetizing products based on configurations; it enables new licensing models such as Software as a Service (SaaS (News - Alert)); and it improves revenue recognition.

In other industry news, registration is currently underway for Flexera Software’s SoftSummit 2011, the only software licensing and entitlement management event that has been designed exclusively for software vendors and intelligent device manufacturers. The event is set to take place at the San Jose Marriott, October 24-26.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.