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Why Cisco Software Licensing Must Change with the Market

By Susan J. Campbell, TMCnet Contributing Editor

In a world of cloud solutions, hosted options and professionals working from anywhere they can find a hotspot, how do you balance software licensing with constantly changing needs? Do the rules change just because technology has changed, or do you still have to respect the intellectual property of the companies with which you do business?

For those companies that develop the technologies we have come to rely on in our own businesses, there are certain things that must be protected, including their ability to make money on their developments. For companies like Cisco (News - Alert), this is imperative to ongoing success and sustainability. Regardless of what you think of big business, the reality is the company has a lot invested in their assets and intellectual property and that should be protected.

At the same time, big companies shouldn’t ignore the trends that are impacting the way companies do business. The cloud and hosted solutions have definitely changed a lot of activities over time, forcing a new approach to network infrastructure, security, software licensing and so much more. To keep pace with market demands, client expectations and their corporate strategy, Cisco released a new pricing model.

In the past, according to a post in Network World (News - Alert), Cisco customers bought network infrastructure by purchasing a device and paying for bundled hardware and software. That meant in the first year, they were paying a significant sum for products and used those products for several years to recoup their investment. While many were accustomed to this model, it also meant that software licensing was a challenge simply because of the complexity of managing and ordering licenses, especially when companies are managing hundreds or thousands of licenses.

To tackle this and other challenges, Cisco implemented the Cisco ONE Software, which decouples the acquisition of software from the underlying hardware platform. This allows for better pricing, enables licensing portability and provides access to ongoing innovation. As technology evolves at a faster pace than ever before, companies are looking to leaders like Cisco to ensure access to the latest and greatest as it becomes available.

If companies have to wait five to seven years before making needed updates to their network infrastructure, they could quickly lose ground to the competition and Cisco risks losing relevance in a market heavy with cloud leadership. Even with the brand power Cisco possesses, software licensing still has to be able to meet the demands of today’s users. With this new focus, the technology giant is one step closer.