Software audits have long been a sore spot for IT managers — and the pain just keeps getting worse. Citing statistics from Gartner, InfoWorld reports that 68 percent of enterprises receive at least one audit request each year. This can mean “true-up” costs ranging from $100,000 to more than $1 million, depending on the audit results. Unfortunately, audit risks aren’t likely to diminish anytime soon. IT trends such as virtualization, bring-your-own-device programs and cloud services add new complexities to software asset management (SAM) strategies.
“The mantra among auditors is, ‘Where there’s mystery, there’s margin,’” says Marlon Oliver, a vice president and partner at Snow Software, a SAM solutions vendor. “With today’s mix of virtual and physical environments and the shift to the cloud, there’s a lot of mystery.”
But IT managers are getting new tools to help them avoid and respond to audits, and at the same time optimize their software spending to avoid overbuying licenses.
Cloud Complexities
The cloud represents a double-edged sword for software managers. On one hand, it can reduce licensing burdens because organizations contract for on-demand services rather than buying application seats. But the cloud model still requires close oversight of spending. “Companies must track the consumption patterns of all their services, or they risk cloud sprawl from redundant or unused resources,” says Patricia Adams, asset management evangelist at Ivanti, a company that sells asset management solutions.
In addition, administrators must be wary of software vendors that use audits of on-premises applications to drive growth in their cloud businesses. “If an audit results in a customer owing a fine, some vendors are saying ‘Here’s the amount that you owe us, but if you move to our cloud platform, we’ll discount it,’” Adams says. “When I look at the quarterly reports of enterprise software vendors, I see significant growth in cloud. Part of that reflects their aggressive auditing practices.”
Discounts may be an incentive for moving to the cloud, but experts say they shouldn’t be the only consideration. IT decision-makers should study the pros and cons of clouds using a detailed total cost analysis for each application. The cost of tools to monitor cloud assets should be included in this analysis.
30%
The potential savings on software spending that an organization could see after implementing software asset management tools, combined with application configuration optimization and software license recycling
Source: Gartner, “Gartner Says Organizations Can Cut Software Costs by 30 Percent Using Three Best Practices,” July 2016
New Help for IT Managers
Many organizations also struggle with the software management complexities brought on by virtualization. IT leaders must understand the limitations of discovery tools, which may not provide a complete view of resources within a virtualized technology stack. This can hide licensing problems created by multiplexing and other techniques within virtualization. “Virtualization platforms come with their own management consoles, but they don’t typically associate between the virtual asset and the physical machine, usage patterns and entitlement,” Oliver says. “To accurately assess their compliance risk — and identify opportunities for optimization — organizations need to see all data about their assets within a single platform.”
Developers are refining their SAM products to better address virtualization, cloud computing and other digital trends. For example, Hewlett Packard Enterprise plans to release sophisticated analytics tools in 2017, including machine learning capabilities, with its Universal Discovery asset management platform. “The tool will be intelligent enough to make decisions around software licensing and offer recommendations to the IT department,” says Nick Rendall, HPE’s product marketing manager for IT service management.
The tool can make proactive recommendations that reduce the need to have an IT professional manually sift through data to find licensing gaps. It also can predict where problems may arise in the future, he says.
“By applying analytics and machine learning, enterprises can reduce audit risks and optimize their use of software assets,” adds Dave Langlais, HPE’s senior marketing director for IT operations management. “This can potentially lead to cost reductions.”
Other vendors are following suit with expanded product lines. Ivanti recently acquired Concord Solutions, a company that specializes in tools for managing licenses of complex data center applications. The acquisition brings modeling capabilities to Ivanti’s portfolio to help IT managers run what-if scenarios to optimize IT spending and licensing, and determine how best to time upgrades. “The technology addresses all the major products we see being audited in the data centers,” Adams says. “It’s also useful for managing applications running on client devices.”
The modeling capabilities enable managers to reclaim software licenses, so they can shift seats underused in one department to a business unit that needs the resources. This avoids unnecessary spending for additional seats. The program also helps organizations balance license investments as users come and go. “Having clear visibility into IT environments shows enterprises how their software is deployed, which helps them avoid overspending to prevent an audit,” Adams says. “Instead, they are able to buy only what they need.”
Snow Software’s License Manager portfolio is being enhanced with new capabilities to help IT managers better understand their cloud spending. “Our goal is to help organizations better manage costs,” Oliver says. “We’ll give CIOs and CFOs additional insights so they can react more quickly if they see unnecessary spending.”
The platform does this with a discovery tool that first performs a baseline audit of all licenses within an environment, with a list of applications and an analysis of where money is being spent. Managers can then set license and spending thresholds, which the platform will use to trigger alerts when the organization starts to bump up against these metrics.
Software audits will remain a reality for IT managers, but with new, more sophisticated tools becoming available, SAM doesn’t have to be just a hedge against fines. It can also be a resource for optimizing spending.
New Licensing Options in the Cloud
The cloud presents enterprises with additional licensing considerations beyond traditional choices such as site licenses, perpetual licenses and volume agreements.
Bring your own license: Enterprises that have negotiated deep discounts for site licenses may have the option to run the software on virtual machines in the cloud. “Many vendors now consider these licenses to be interchangeable between data centers and public clouds,” says Anil Desai, an independent IT consultant.
Replicated servers: Licensing may be affected by several considerations, such as whether a server is running in standby mode or if it is read-only. For each scenario, IT staff should determine whether two licenses are needed if one of the servers remains idle until an emergency. “The general trend in the industry is that enterprises can use a single license if users are not connecting to the backup server during normal operations,” Desai says.
Another option is to look for license agreements that include backup servers as a standard part of the contract, he adds.
CDW’s solutions and services can help you better manage your software environment to optimize spending.
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