Three Software Virtualization Licensing Pitfalls – And How To Avoid Them

Spend Matters welcomes another guest post from Mark Bartrick of Forrester.

There are many benefits associated with software virtualization. In fact, the global virtual desktop market is projected to reach 49 million units by the end of 2013, up from around 500,000 units in 2009. Revenue is also expected to skyrocket, representing more than 40 percent of the professional PC market. By virtualizing software, organizations can run multiple operating systems and applications on one physical machine and across multiple processors or cores. This allows employees to do more work on fewer machines as well as reduce IT costs and time associated with managing infrastructure.

However, like with any licensing metric, the devil is in the details. In new research, my colleagues and I maintain that IT decision-makers must understand the nuances of virtualization, as well as the different licensing rules applied by different vendors in order to stay compliant and avoid costly embarrassment at audit time.

There are three challenges to keep in mind:

Software vendors license virtualization in different ways. Unfortunately, there is no industry standard for applying metrics to virtual scenarios. Some software companies try to ignore the issue and remain in the physical realm, while others create conversion models based on peak resource use or running instances. For example, one organization was running seven virtual instances on a server with four physical cores. Depending on which software they were using, they required seven licenses from one vendor - but only four from another.

IT focuses on performance, not licensing rules. At the point of buying, most IT professionals licensing knowledge is aligned and vendor-specific nuances are understood. But as time goes by, this common understanding and knowledge can fall by the wayside. In fact, one Forrester client hadn’t been correlating the physical hosts and virtual machines to accurately determine their license position. After investigation, it turned out that their license usage was almost double their entitlement. This resulted in an unbudgeted - and unplanned - license purchase to reach compliance.

Keeping up-to-date with licensing rules is a full-time job. It’s important to remember that most sourcing professionals are busy with the demands of the business. As a result, it's easy for firms to find themselves suddenly out of compliance.

It’s tough even for even a hawk-eyed sourcing and asset management professional to keep on top of license compliance in a virtualized world. In order to get on top of this challenge, firms should adopt the following best practices:

Understand each vendor's virtualization rules. If organizations are virtualizing software, we recommend assigning a sourcing or asset management professional with the responsibility to understand and keep up-to-date with licensing rules relevant to each software product.

Communicate licensing rules clearly and regularly. As time goes on, people's priorities change, employees move on to other jobs, and new people arrive. It's vital that the IT professionals who are responsible for installing and moving software are regularly updated with the various vendors' virtualization rules. This will stop inadvertent installations that breach the rules.

Use SLO tools. A new generation of software asset management tools has been developed that automate and alleviate many of the challenges of staying compliant in a virtualized world. Authored by the likes of 1E, Aspera, Eracent, and Flexera Software, these products understand - and keep up-to-date with - each vendor's latest licensing and virtual use rights.

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