Software Licensing Featured Articles

Software Licensing Tensions Mount Between Developers and the Enterprise

By Susan J. Campbell, TMCnet Contributing Editor

Virtualization holds a variety of promises for organizations—promises so strong that management put a strategy in place to shift the entire approach to information management. In the process, the plan is to copy machines and duplicate systems on virtual platforms. The enterprise will have everything it needs to run the business and enjoy the virtual benefits – everything except the right software licensing.

A common problem within the enterprise is that too many strategies include making copies of applications within standard systems for use on virtual platforms. In essence, these copies are not in compliance with software licensing agreements, but the enterprise doesn’t always see the conflict. If they paid for access to the application, they should be able to do with it what they want, right?

In traditional software usage, it was clear that a user shouldn’t purchase software, put it on his machine and then give it to a friend to do the same. This was a clear violation of software licensing rules. But virtualization has introduced a new dimension to the game and early licensing didn’t define the guidelines for copying machines within the same environment. Now that software and application developers want to profit from virtualization, tensions are rising between them and enterprises.

A recent Flexera blog highlighted its 2013-14 Key Trends in Software Pricing & Licensing Report, produced in partnership with IDC (News - Alert). Key findings suggest that tensions are set to mount as 42 percent of application producers have plans to change their software licensing rules to account for virtualization. The analysis also found that 39 percent of enterprises fail to manage their software licenses in virtual environments or are doing so through manual processes.

Tensions are bound to arise not just because the enterprise isn’t following the rules, but also due to the higher costs emerging from licensing changes in the virtualized environment. Amy Konary, research vice president for software licensing and provisioning at IDC, notes, “We've seen instances in which the savings that organizations anticipate through virtualization disappear, and costs actually increase due to higher licensing fees,” placing more importance on making informed decisions.

At the same time, application producers are largely unaware of the challenges the enterprise faces when trying to manage software licensing. While 59 percent claim it is not difficult for the enterprise to determine what products they are entitled to use, 85 percent of organizations were found to be out of compliance in the previous year’s report. As the struggle continues, software vendor audits are likely to increase, adding fuel to already heated relationships. In the end, it will be tough to determine the winners in this battle.