Why Counting Software Installations is a Waste of Time

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1 Why Counting Software Installations is a Waste of Time A SCALABLE SOFTWARE WHITEPAPER Executive Summary Not another white paper on Software Asset Management? Well, yes! But this one may actually help. If your software asset management ( SAM ) practice remains focused on counting the number of installations of various software products, as a primary method for determining whether you are under or over licensed, then read on, as you are probably wasting your time. Not another white paper on Software Asset Management? Well, yes! But this one may actually help. Since the advent of virtualization, Software as a Service (SaaS) and capacity oriented licensing metrics, simply counting installations works as a software asset management strategy for a small fraction of an organization s annual software expenditure. However, counting installations remains the default strategy for many companies faced with software audits. The old school focus of inventory tools, and desktop (end point) oriented SAM has resulted in many IT departments having invested in software inventory tools with a one-dimensional approach to calculating license consumption. This whitepaper explores the fundamental shortcomings of this first-generation model. It focuses on the benefits of pursing license allocation as the only viable method of defending against a software audit, while maximizing the investment in software

2 Why Is This Important? These days, the main point of SAM is being able to survive a software audit, with the collateral benefit of optimizing software expenditure. Many surveys, put the chances of having some form of software audit within the next 12 months at greater than 50% for organizations with some form of volume license agreement with a major publisher. Indeed Gartner 1, in a recent survey, determined that software audits among organizations of 1000 employees and above had risen from 35% in 2007 to 63% in If you have a volume license agreement with one of the major publishers, you cannot afford to ignore this paper. Why Counting Software Installations is Inadequate Many surveys, put the chances of having some form of software audit within the next 12 months at greater than 50% for organizations with some form of volume license agreement with a major publisher. In the era prior to massive proliferation of server and desktop virtualization, use of a software license was inextricably linked to the physical computer upon which the software was installed. Software was purchased in units that were measured in workstations or seats or servers, indicating that a certain number of these devices could have copies of the software installed. End User License Agreements (EULA) legally defined the parameters under which the software could be deployed, and it was rarely more complicated than defining the number of copies of the software that could be installed on the physical machines. Even with this relatively simple model for software licensing, progressive organizations still felt compelled to manage their license position and first-generation software inventory tools emerged to count installations of software. Indeed, some of these tools were quite sophisticated insofar as they could recognize and normalize software names, and compare these counts of installations with licenses purchased. Today, these models fail at the first real-world engagement. Consider the case of Microsoft s popular SQL Server Database Management System. A fairly common scenario would have various editions of SQL Server running on virtual machines. In turn, these virtual machines run on physical machines, which may be clustered together. The clustering of these physical machines may support some form of workload balancing where virtual machines move around the cluster. Counting the installations of SQL Server, i.e. the number of installed packages, tells us precisely ZERO about how many licenses have been consumed. 1 Survey Analysis: Software Audits Are on the Rise and Your Enterprise Might be Next. 30th April Gartner Document G

3 The following is a snippet from a publically available Microsoft Volume Licensing Guide entitled Licensing Microsoft Server Products in Virtual Environments : Use terms for each software license specify the number of instances of software that you may run on a particular server at a time, rather than the number of copies of the software that you may install and use on your server. Each software license allows you to create and store any number of instances of the software on any of your servers or storage media to make it easier for you to run those instances on any of your licensed servers. Before you use the software under a license for a server product, you must assign that license to a server. Each hardware partition or blade is a separate physical hardware system, and, therefore, a separate server. In general, you may reassign software licenses for server products, but not on a short-term basis (i.e., not within 90 days of the last assignment). However, they may be reassigned sooner if you retire the licensed server due to permanent hardware failure. In addition, for certain server software licenses, under certain conditions, there is a new rule for license mobility within a server farm. For the server farm definition and more information about the server software license mobility rule, including the list of eligible server and EC licenses, please read the Application Server License Mobility Volume Licensing brief. You may not separate software to run it in more than one OSE under a single license, unless expressly permitted even if the OSEs are on the same server The first thing you may notice is that Microsoft doesn t care about the number of copies you have installed. This is spelled out clearly in the first paragraph. Counting installations is irrelevant. So, what about counting running instances? Well this is slightly more relevant, however paragraph 3, is where the elephant in this particular room lives; it states Before you use the software under a license for a server product you must assign that license to a server. This means that you are not licensed to use the software until you have assigned a license to the server upon which the software is running. Now some might argue this is just administrative nonsense, and counting the number of running copies and comparing them to the license count will suffice. This is a critical misjudgment and the final paragraph confirms it: You may not separate software to run on more than one OSE (Operating System Environment) under a single license, unless expressly permitted. Even if the OSEs are on the same server. Stated differently, unless the license allows it, you cannot count a physical machine for licensing purposes if it is running virtual machines with instances of the software. Needless to say it is even more complicated than that. As machines have grown in power, in order to not to lose revenue based on simple server based licensing, Microsoft has implemented a license model that counts the number of cores on the server for certain product editions. Oracle and IBM have also implemented slight variations of this model. Consequently, counting a running instance of the software only gives half the story UNLESS you have a license that doesn t care about the number of cores.and there you have it

4 Allocating licenses especially with automation - can rapidly identify ways to reduce ongoing software expenses by ensuring the allocation is optimized. Re-iterating the above slightly differently, in order for the full impact to be clear; the way you count the number of licenses you need depends on the licenses you have. If you have server licenses you need to count the number of servers, if you have core licenses then count cores. If you have both types of license for the same product you need to decide which license will be applied to which computer. Stated clearly, until you allocate a particular license to a machine, You Do Not Know What To Count. In fact the rationale for allocating licenses goes even further. Nowadays licenses come with explicit restrictions such as Oracle forbidding a license to be allocated to a virtual machine unless the physical machine is running one of Oracle s hypervisorsors, a specified hard partitioning technology; or IBM only enabling the allocation of a license to a partition if that license was purchased within an agreement that commits the customer to using IBM s License Measurement Tool (ILMT). This list goes on. And it doesn t only impact servers. If you are licensed for Office 365 you need to count users of the software, and where any of the associated components (such as copies of Office Professional) are used from. If you are using virtual desktops, then the endpoints accessing the virtual desktops (which may be diskless thin-clients) must be licensed even if no software is installed. It should now be clear that simply searching for installed copies of software to prepare for a software audit or optimize a license portfolio is a waste of time. So, What s The Alternative? The only viable alternative is to allocate the licenses owned - according to the rules of those licenses - to the devices or users that require them. When your license counts are exhausted you need to buy more. If you have some left over, you have optimization options. Allocating licenses especially with automation - can rapidly identify ways to reduce ongoing software expenses by ensuring the allocation is optimized. The following sections explore in more detail what it means to allocate licenses. What is License Allocation? Simply stated, License Allocation is the process by which a license for software product or service is allocated to a device or user. Outline of License Allocation Obviously this not a question of keeping a license paper trail. In practice, it is a structured electronic map of which licenses are allocated to which devices or users, with the map pointing to some defensible proof of entitlement. Common examples of proofs of entitlement are vendor purchase history, publisher licensing statements and internal invoice records. The diagram to the left illustrates the principle at a highlevel. The physical realm is mapped, using

5 an automated discovery process, to an electronic register of devices and users. Similarly, proofs of entitlements are consolidated into a license position. These licenses are then allocated to the devices and users according to the rules of the licenses themselves. Isn t License Allocation a Lot of Work? License allocation doesn t have to be a lot of work if done correctly. And, it is certainly a lot less work than having to deal with a software audit if all you have are license and software installation counts. The traditional view of license allocation is based on a spreadsheet model where individual users and machines are manually assigned licenses. Obviously such a mechanism is totally impractical above a certain organizational size threshold. Automation of license allocation is emerging as a profoundly valuable solution to the challenges of software asset management. How Can Automation Make it Easier If licenses can be allocated easily, and automated solutions are emerging designed to support exactly that, a powerful software asset management platform is guaranteed. The main role of automation in license allocation is determining whether the license rules allow for a license to be allocated. Here are some examples of how automation can help understand license allocation rules: If the license is a user-oriented license, it cannot be allocated to a device. If the license is for Oracle s database, and it is being allocated to a virtual machine running on Intel, the hypervisor must be Oracle VM in order to exploit hard-partitioning. If the workstation is a virtual machine, the windows license must be allocated to the primary access device. If the license is for SQL Server Enterprise, with a Server/CAL metric, the maximum virtual machines covered cannot exceed 4 and the maximum number of cores covered is 20. Automation can also help by streamlining the allocation process. Rather than dealing with individual devices and users in a spreadsheet, quality automation enables filtering by characteristics and the automated selection of only those devices or machines that have liability for a particular software product or service. Finally, certain licenses can only be re-allocated under certain circumstances; for example if an employee leaves, or after 90 days since the prior allocation. Without a record of allocation, it is impossible to implement this tracking. Automation enables both the tracking and implementation of rules around the re-allocation of licenses. What is the Outcome? Going back to where we started, this whole discipline is designed to defend against a software audit and optimize an organizations software licenses. Therefore the outcome must be expressed in those terms. If licenses can be allocated easily, and automated solutions are emerging designed to support exactly that, a powerful software asset management platform is guaranteed. Organizations that implement license allocation can easily: Identify exactly which users or devices are not licensed Enable auditors to quickly track a specific installation or use of a software product or service

6 back to the proof of entitlement Defend against the more complex rules that audit processes gravitate toward to maximize the revenue result of the audit Ensure that new BYOD licensing options are correctly exploited Ensure that licenses are allocated as efficiently as possible where virtualization and clustering present licensing options Prevent the misallocation of licenses that unnecessarily reduce an organizations overall entitlement More accurately allocate licensing expenditure back to the users or departments enjoying the greatest benefits As we have seen, traditional methods that concern themselves with what you own vs. counting what you have installed simply cannot deal with today s licensing reality. Overall the result of implementing solid license allocation will be to reduce the cost of software licensing, and improve the management of the software licensing process. And, importantly, eliminate the time wasted trying to produce an effective compliance position using outdated methodologies Summary Virtualization, mobility, cloud deployment, and core/processor licensing have conspired to ensure that, without an understanding of the rules around license allocation, it is impossible to get a full picture of your license position. As we have seen, traditional methods that concern themselves with what you own vs. counting what you have installed simply cannot deal with today s licensing reality. License allocation takes into consideration the various use rights, virtualization and server capacity idiosyncrasies that all software publishers seem to have introduced in the last few years. Without systematic license allocation, you are at high risk in the event of a software audit, and have virtually no chance of being able to correctly assess and optimize your license position and software expenditure Scalable Software, Inc. All rights reserved. Scalable, the Scalable logo, Asset Vision, WinINSTALL, and Scalable LIVE! are registered trademarks of Scalable Software, Inc. All other marks are the property of their respective owners. 2014WP

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