2014-software licensing takes centre stage.

Author:Schmidt, Steve

The software industry is undergoing levels of change not seen in decades. New technologies such as virtual ization and the Cloud are reshaping the very definition of what software is. A growing complexity of environments, from on-premises to mobile, and a growing mosaic of devices on which it will run--desktop, tablets, mobile devices--are reshaping software demand. And new preferences for subscription and usage-based software models, are transforming older notions of how software is consumed. With that as a backdrop, 2014 promises to be the year of the software license. Some predictions include:

More Subscription-based Software, but license compliance issues set to stay

Many incorrectly believe that issues of shelfware (buying too much software) and non-compliant software use (and the resulting software audit penalties) disappear by moving to a subscription model.

As an alternative to the traditional, perpetual software license, a subscription-based software license constitutes a payment plan for access to the software. Whether or not a license is subscription-based should not be confused with the delivery model for the software--for instance SaaS versus on-premises. If the software is licensed under a subscription model, organizations must still understand and keep track of the license metric, to understand whether they are out of compliance or have shelfware.

Moreover, most organizations will not move exclusively to subscription based software--but they will continue to have a mix of subscription and perpetual licenses, depending on what makes sense for the organization. Accordingly, organizations will need systems and technology in place to manage and optimize the use of this increasingly complicated software mix to ensure they continue to buy (or rent) only what they need, and use what they have. By the same token, Software License Optimization tools needs to evolve to accommodate the new usage-based license metrics that may be contained in subscription licensing agreements. This involves new licensing model variants linked to metrics beyond just number and time--such as how the software is being used. This requires new definitions of entitlements and usage. The Software License Optimization solution will also need to understand patterns of usage on an ongoing basis--and not just a snapshot in time.

Ultimately, both application producers and enterprises benefit from more sophisticated Software License Optimization solutions that...

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