Savings from virtualisation are lost in a sea of licensing complexity

Martin Prendergast, CEO of Concorde Solutions, and Chairman of the Cloud Industry Forum's Software Value Management special interest group explained: "Many companies have found that there is a lot of value in moving their IT infrastructures to a virtualised environment, since it can offer security, reliability, and most importantly for some companies; cost savings from the reduction of capital expenditure. However, when companies innovate, and develop new systems and processes within their organisations, factors like the licensing of underlying software products are often overlooked, especially in a virtualised environment where it is notoriously more difficult to keep track of estates. This is where governance issues have the potential to eat away at any initial cost savings made."

All major software vendors have established and systematic licensing and business practices that are embedded throughout the sales cycle, designed to maximise revenues. Virtualisation and cloud computing has made managing and having visibility of an end user’s software estate more complex, and so vendors are ensuring that regular customer auditing is taking place.

Prendergast said: “It isn’t unheard of for vendors to charge for technical support for any number of specified years prior to the audit, if they have found a customer had been under-licensed. At the same time, we've spoken to some end users who have held 'all-you-can-eat'-style contracts, who could actually be saving money by avoiding that type of licensing structure.

"Vendors are essentially profiting from the lack of attention given to software estates by the end users, and so end users can mitigate any surprise costs by acting now,” he added.

Prendergast offers his top tips for businesses in order to avoid the risk of losing the benefits of cloud computing and virtualisation:
· - Undertake regular (at least annual) internal software compliance audits across the entire environment
· - Always perform an impact assessment of any change in configuration or additions to the network
· - Engage fully with server and application administrators to identify application deployment requirements
· - Create a detailed analysis of requirements and dependencies for each application
· - Assess the best license model and support option for the estate for now and the future

Prendergast concluded: “Navigating thought an ocean of technical requirements – let alone license and contract and documentation – when you virtualize part or all of your business is an art-form in itself. If you can establish control of this from the beginning, you'll be in a better position to gain from the many benefits that virtualisation has to offer.”