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Who's counting your licenses?

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IT managers software licenses

By Kathleen Lau | Mar 20, 2009

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Daniel Reio remembers the days of the software retail box when buying software meant it came on a CD with a paper manual packaged in a box.

"The way that some customers used to track their software licence rights is, they would walk into the server room and count the number of boxes on the shelf," said the senior marketing manager with Etobicoke, Ont.-based technology provider CDW Canada Inc. "But now everything is licence-based. It's all virtual," said Reio.. "

CDs and manuals have been replaced by licence keys and electronic files, making it difficult to track software licences in an organization. The tendency, too, said Reio, is for organizations to focus entirely on their core business, often leaving licence tracking to fall to the wayside. "But there's a point in time where something happens where they realize that they probably should be tracking the number of licences and ensure they are compliant," said Reio.

That reminder could come in a variety of forms. It could be the software vendor itself who suspects the customer is not being compliant. Or, perhaps the company has downsized and must re-align its licences with the reduced headcount. Maybe the company has suddenly grown and can't be sure it actually has the necessary number of licences for the new users.

"The reality," said Reio, "is that today tracking is much tougher because you don't have a physical piece anymore."

Non-compliance has its price

PCs now must be individually scrutinized for applications that reside on them, a task that can be a "highly complicated, very detail-oriented, labour-intensive type of activity," said Edwin Jansen, manager of IT asset management service with Toronto-based IT products and services vendor Softchoice Corp.

Jansen recalls a customer's plan to categorize the jungle of commercial and non-commercial software across its 50,000 PCs. There were probably no fewer than 20,000 unique software titles to deal with, estimated Jansen. "How do you figure out which ones are commercial (and which ones are) non-commercial?" The company, a North American financial institution, decided to create a small team of employees who would painstakingly search, using Google, what each application did and what licence was required, said Jansen.

"Organizations often feel they've got to go it alone and do it themselves," said Jansen.

There are products and services available to help with software licence management, but "there is no silver bullet," noted Jansen.

To start, organizations should realize the benefits of a licence management strategy, like cost-avoidance. Businesses will have planned budgets and expenditures, "and by then getting tapped on the shoulder by a vendor can mean you now have got to buy licences at list price that you had not planned on," said Jansen.

Risk reduction and good vendor relations is a benefit, too, because a licensing agreement, essentially a legal relationship with responsibilities that must be adhered to, can render penalties for non-compliance, said Paul Asseff, director of software marketing at Softchoice. The actions taken by software publishers vary, like losing a corporate rate or having to pay a fine, said Asseff, but in most cases vendors are willing to arrive at an amicable solution if the customer shows an eagerness to get compliant.

Dealing with non-compliance can take precious time away from core responsibilities, said Jansen, especially when the chief financial officer and legal department are preoccupied with "looking through the licensing situation in panic mode."

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