Can Cloud Clear Software Licensing Complexity?
February 18, 2016
It’s time to stop making transactional decisions around technology and start having more strategic conversations that include your cloud solution architects and enterprise technology strategists. There is a balance to strike between on-premises and cloud/SaaS models, as part of a strategic conversation around the complexity in product offerings, licensing and consumption models, and the business value that each brings. It’s really about looking at all the angles and having an open mind to new ways of doing things.
Cloud challenges the norm.
The transformation to cloud can be a challenge because it’s new, not everyone is aware of the options, and it’s a totally different way to consume. With more technology providers providing cloud and on-premises options for products, more due diligence is required to understand the differences in the models and the implications to the business around cost, agility, and flexibility to name just a few. Making decisions around cloud requires understanding the business requirements and mapping those to the available solutions.
Can cloud reduce complex licensing headaches?
Vendors have come to realize that complex licensing schemes do not retain customers. More and more customers are looking for technology combined with ease of use, and if not provided, they are quick to look at alternatives with less onerous investments. That is why we are seeing competitive innovation in the industry to drive to services oriented products that solve business problems and overcome challenges. Manufacturers are aware and hence you see the trend of license simplification.
I recommend customers look at innovation and consider cloud options strategically, especially as vendors invest in cloud and create programs to incent customers to migrate to the cloud.
- Take Oracle as an example. Oracle’s on-premises licensing model is complicated if you don’t use their hardware or hypervisor. On the other hand, Oracle licensing in the cloud, whether on AWS or Azure, is based per VM with the freedom of hypervisor and a reduction in complexity. Oracle’s savvy licensing team has morphed to allow customers to license in an easier way in the cloud, while at the same time paying only for what is consumed, which is great for your failover and disaster recovery instances.
- Or Windows. Who would have thought that Microsoft’s Windows operating system would move to a user model with no more software assurance rules like MDOP, VDA, per device? Microsoft has innovated to stay competitive in the market, while also simplifying licensing as much as possible. We also see this with traditional Office device licenses moving to Office 365 user based subscriptions as an option.
- Who started the trend? Adobe moved first to a subscription only offering, while Microsoft, Oracle and others still provide perpetual and subscription offerings, allowing for a slower transition. Moving to a subscription model doesn’t just help customers; it also helps manufacturers by reducing the need for compliance audits that can sometimes hurt customer relations.
So what can cloud offer?
- Know what you pay for: in a cloud model, you know exactly what you are using and what you are paying for, so it’s easier to be compliant with vendor licensing agreements. This keeps audits at bay, and let’s your compliance managers sleep well at night. Ask IT operations managing the on-premises datacenter how painful it is to manage the different licensing schemes and maintain licensing compliancy and server sprawl.
- Reduce shadow IT: taking charge of cloud purchases can also reduce employees’ personal use of credit cards, if cloud subscriptions are owned within the organization, reducing shadow IT. If not, it’s too easy with Azure and AWS for individuals to go around IT, if cloud can answer their needs quickly and simply.
- Clearer measurement: with cloud purchases centralized, IT is also in a better posture to measure the environment and what’s happening in which department versus today’s sometimes “cloudy” IT sprawl. Show me a CFO who wouldn’t love to see a pay-per-use model where there is no wastage on unused subscriptions/capacity.
- Innovation and support: by thinking big picture, you can focus on transforming internal customers smoothly to cloud when it is the right model, and provide the necessary architecture and managed services to support them, either internally or with a partner that provides managed support.
How to manage the speed of innovation?
Cloud does simplify some traditional IT problems but it also adds a new set of challenges. Changing traditional mindsets and adopting new approaches is just the start. As cloud helps your technology keep pace with the speed of innovation in today’s market, how will you handle the operational changes it drives? How will you support your end users with constant updates and upgrades, instead of a more traditional long term roll out process? Because the vendors are innovating more and more quickly, you need to be ready to support your users, applications and infrastructure, whether you do it yourself or ensure your partner is capable of supporting the speed of change across all three.
In the future not too far away…
I think in the future we will go to manufacturers and choose a rate card and plan similar to buying a wireless plan from a mobile provider now, based on the services we need and not just on product licensing schemes.
Technology vendors know they can no longer stay with traditional product and licensing approaches, using audits and complex licensing schemes. We are already at the point where the focus has shifted to product capabilities, efficiency and simplification so that IT can help drive business innovation. Today’s cloud marketplace accelerates innovation even faster, with integrated 3rd party offerings built on Azure and AWS, expanding the list of possibilities for customers.
Make sure you’re taking advantage of the speed of innovation to reduce complexity while enabling business value!