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Software Licensing Optimization Gains Market Wings

By Tara Seals, TMCnet Contributor

As businesses rely more and more on cloud-based services that are geographically murky in terms of where users are located, as well as layers of virtualized infrastructure and a proliferation of devices and endpoints, maintaining proper software licensing compliance has become an internecine, complex headache for IT departments. As such, the fledgling group of tools known as software licensing optimization, or SLO, has started to take flight.

Research firm Gartner (News - Alert) Inc. said that the area is nascent, and is thus categorized as being in the early-adopter “Advantage” stage – the earliest stage in the market where the technology is procured for what it delivers. But this year for the first time, SLO has been added to a Gartner Market Clock, indicating the growing relevance of the area.

Gartner’s recent report, IT Market Clock for ITSM 2.0, describes SLO solutions as an “asset class” underneath IT service management in general (ITSM); that is, tools that support maturing ITSM implementations for organizations transitioning from a reactive to proactive service orientation. ISTM is now one of the three categories into which the firm has divided the whole of IT operations management.

The Gartner report notes that SLO tools help organizations respond more quickly to software license audits and reduce the risk of unplanned audit true-up expenses. And, license optimization capabilities provide enhanced visibility into an ideal license deployment, reducing operational costs.

Gartner further recommended action regarding SLO within 12 months, reflecting the highest level of urgency. The firm said that for businesses to achieve the fastest ROI and gain visibility into software license position, companies should ensure that discovered inventory data is accurate and sources reliable. Keeping good records of purchase orders and contracts for software is important too, and ideally, businesses should have a central asset management database (AMDB) where it can keep track of everything.

According to Flexera Software’s John Lipsey, SLO’s inclusion in the Gartner analysis should telegraph opportunity to both market players and end users.

“[SLO products] are highly differentiated, innovative and command higher prices,” he said in a blog. “There is also higher risk in this stage because higher skill levels are needed to exploit the solution and full benefits may not be realized. Strategic advantage is derived through choice of supplier and/or delivery model”—which means opportunities for the right vendor.

For instance, Gartner recommends selecting an SLO vendor based on its ability to support licensing models across the entire software portfolio. Also, that vendor should maintain up-to-date content libraries, given that vendor software SKU and product identification libraries will also require constant updating as software publishers are acquired or vendors have new releases.

“[SLO] is an asset class that is not yet commoditized…and is in fact tied for the lowest level of commoditization, along with unified endpoint management,” added Lipsey.