Coming to Terms over Software Licensing

Michael Vizard

In the wake of the recent economic downturn, tensions between vendors and customers over software licensing run high.

In the absence of real sales growth, vendors have launched software licensing audits to generate additional revenue. As the onus of proving compliance with the licensing terms falls on the customer, these audits create a lot of IT management headaches.

The challenge facing customers and vendors alike is to automate the process of tracking software licenses and use. Flexera Software,, a provider of software licensing tools, is taking a big step in the direction with the acquisition of ManageSoft.

Flexera got its start by selling license-tracking software to vendors. But with several acquisitions in recent years, Flexera has added tools that allow IT organizations to track their software consumption. According to Flexera CEO Mark Bishof, the addition of ManageSoft will augment the Flexera lineup by adding tools to track software use on the desktop.

According to Bishof, Flexera wants to be the trusted third party that both vendor and customer can use to resolve disputes. The long-term goal is to provide customers with automated tools that alert them immediately when they are out of compliance with licensing terms, rather than waiting to discover that after a contentious audit process.

Software licensing will get more complex in the age of virtualization and as IT organizations wrestle with deploying applications in the cloud. That calls for a new approach that ascribes value of software to actual use, rather than the class of processors on which the software runs. While the industry is moving in that direction, some vendors are dragging their heels over concerns about what a usage model for licensing would do to their revenue streams. Nevertheless, virtualization and cloud computing are making these changes inevitable.

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Jul 8, 2010 10:23 AM Dominic Haigh Dominic Haigh  says:

Auditing your customer is not the type of confrontational relationship you want to be having. As you note, a license manager will ensure your license terms are not exceeded, removing the need for auditing.Furthermore, as a supplier of license management systems we are seeing more vendors adopt usage-based licensing models, where both vendor and user can track their usage and costs, and even manage usage by department or project for internal cost-allocation purposes. We recently published a case study on just such an implementation.


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