IT Manager's Handbook: Getting Your New Job Done (36 page)

Software Licensing

There are two general types of software licenses: free and for-profit. Initial portions of examples of both types, the GNU and Microsoft licenses, are shown in the boxes.

How GNU Defines Free Software

“Free software” is a matter of liberty, not price. To understand the concept, you should think of free as in free speech, not as in free beer.

Free software is a matter of the users' freedom to run, copy, distribute, study, change, and improve the software. More precisely, it refers to four kinds of freedom for the users of the software:

• The freedom to run the program, for any purpose (freedom 0).

• The freedom to study how the program works and adapt it to your needs (freedom 1). Access to the source code is a precondition for this.

• The freedom to redistribute copies so that you can help your neighbor (freedom 2).

• The freedom to improve the program and release your improvements (and modified versions in general) to the public so that the whole community benefits (freedom 3). Access to the source code is a precondition for this.

A program is free software if users have all of these freedoms. Thus, you should be free to redistribute copies, either with or without modifications, either gratis or charging a fee for distribution, to anyone anywhere. Being free to do these things means (among other things) that you do not have to ask or pay for permission.

Source:
www.gnu.org/philosophy/free-sw.html

Scope of License Section from a Microsoft End User License Agreement (EULA)

“The software is licensed, not sold. This agreement only gives you some rights to use the features included in the software edition you licensed. Microsoft reserves all other rights. Unless applicable law gives you more rights despite this limitation, you may use the software only as expressly permitted in this agreement. In doing so, you must comply with any technical limitations in the software that only allow you to use it in certain ways. You may not

• work around any technical limitations in the software;

• reverse engineer, decompile or disassemble the software, except and only to the extent that applicable law expressly permits, despite this limitation;

• use components of the software to run applications not running on the software;

• make more copies of the software than specified in this agreement or allowed by applicable law, despite this limitation;

• publish the software for others to copy;

• rent, lease or lend the software; or

• use the software for commercial software hosting services.”

Source:
Microsoft Windows 7 Home Premium EULA

As you can see, even from these small portions of these agreements, some software licensing terms can be rather complex and also quite lengthy.

Licensing Issues

In general, corporations seldom consciously engage in illegal activities. They also generally respect intellectual property copyright laws. However, due to complexities of licensing agreements and the volume of purchase activity, it can be difficult for an IT Manager to fully know if his company is licensed properly for all its software.

There are numerous cases of small companies being subjected to a software audit based on a call from a single disgruntled employee to one of the software industry trade groups (e.g., Business Software Alliance or the Software and Information Industry Association).

Countless hours and resources have been expended by companies to deliver the documentation and proof of appropriate licenses requested. Companies consider themselves fortunate if it's determined that the illegal licensing discovered was unintentional and that the company had been making a good faith effort to be legal. In cases like this, there may be no fines or punitive damages. However, the company will have to pay the license fees for all the unlicensed software that was discovered or agree to delete all the unlicensed software.

In fact, it isn't unusual for a company to find out that it's over-licensed on some products and under-licensed on others. Under-licensing usually occurs with software that isn't “standard” on every PC. For non-standard software, it's very easy for the purchase of the license to be overlooked and forgotten by the administrative staff. In such a case, the technical staff may seek to satisfy a user's request and install an unlicensed software copy and neglect to inform the administrative staff to purchase the license.

The process of keeping track of software licenses is often referred to as “software metering.” There are some general guidelines that you as an IT Manager should be aware of to avoid putting your company at risk for copyright infringement.

•
Understand that when you buy a software license, what you're usually buying is the right to use a copy of the software; the vendor usually remains the actual owner of the software.

•
Read and understand the licenses that come with your software. Because license terms can change, review them periodically. If they're complex (and most of them today are very complex), pass them along to the Legal department for review. Your vendor and software reseller can also help explain the terms.

•
Don't expect to be able to negotiate a change with your software's vendor (although larger organizations may have some success here). If the software you're buying isn't an off-the-shelf or shrink-wrapped package, you'll have better chances. See the section
“Negotiating Licenses”
on
page 147
.

Licensing Models and Types

To complicate matters further, there are several different licensing models and types of licenses that a vendor may offer. Vendors may define these differently from one another, and may not offer all types. The most common are discussed here:

•
Concurrent user licensing.
With this type of licensing, you only have to buy enough licenses to match the number of users who will be logged into the application at the same time. If you have 100 users that use the warehouse inventory application, but only 20 are using it at any one time, you'd only have to buy 20 licenses.

•
Per seat licensing.
With per seat licensing, you have to purchase a license for each user who has access to the application. In the warehouse inventory example just given, you'd have to buy 100 licenses.

•
Per server licensing.
With per server licensing, you license the server software, not the users. There may also be tiers of server licensing; for example, some sever products are licensed based on the number of processors installed on the server or on the number of users who will access it.

•
Multiple tier licensing.
In some cases, you may need to buy licenses for both the server and the user(s). For example, with Microsoft's SQL licensing with per server licensing, you license the server software as well as the users. But a different offering for SQL requires only the server to be licensed. With Microsoft's Exchange, you have to buy an Exchange license for the server, Outlook licenses for the desktop client, and an Exchange CAL (client access license).

•
Multiple use or home use licenses.
Some licenses allow a single license of the software to be used on each user workstation (e.g., the one in the office, the one at home, and the one on her laptop in her briefcase), as long as these copies aren't used by others, or concurrently.

•
Internal or external uses.
Depending on your planned use for the software, there may be different types of licenses. For example, if you're buying software to host your company's intranet, that may be one type of license. However, if you're hosting data for others to access, it may be a different license.

•
Virtual machines.
When using software in a virtual environment, be sure that your software is licensed properly for each virtual machine. This is a relatively new area for software licensing, and many vendors are still clarifying their licensing requirements here.

•
Non-perpetual licensing.
Most software licenses are perpetual, which means you pay for it once and then you own it. With non-perpetual (sometimes known as subscription, annual, or renewable) licenses, you pay a fee each year to use it for the next 12 months. Once you stop paying, you have to stop using the software. With these licenses you are essentially renting the software, as opposed to owning it. When computing in the cloud (see the section
“Cloud Computing”
on
page 148
of this chapter) you are usually renting the software.

The issues around licensing are growing very complex as vendors simultaneously tighten the terms and conditions and offer different options and alternatives. When trying to determine the different types of licenses you have to buy, be sure to ask lots of questions and ask the vendor to show you where their verbal answers are documented in their licensing agreement(s).

Maintenance and Support Plans

In addition to buying a license, vendors also sell upgrade or maintenance plans that entitle you to upgrade (at little or a reduced cost) to newer versions of the software as they come out. The value of these plans depends on how often the vendor expects to provide new versions and how often you expect to be interested in these newer versions. Keep in mind that a vendor may also offer a support program, which entitles you to technical support on a product but doesn't include providing you with upgrades. Alternatively, buying into a plan for upgrades may not include support. Check with your vendor and make sure you understand what you're buying before you buy it.

Negotiating Licenses

While you probably won't be able to negotiate the specific terms of the license, it's entirely likely you can negotiate a volume discount based on the license quantities you intend to buy. Use your network of contacts to find out what other organizations are paying. The larger your purchase, the more room you have to negotiate on price. You may also have success negotiating additional licensing rights (such as home use) with your purchase. You may also be able to negotiate some free training from the vendor in order to seal the deal. Remember to look at the total purchase of licenses, support maintenance, training, and any professional services and negotiate. You may be able to upgrade or extend your support from the vendor (e.g., from “bronze” to “silver”) at no cost.

Be wary of agreements that automatically renew support and/or maintenance services unless you notify the vendor in writing. You can usually ask to have this provision removed. If the vendor refuses, you can get around the issue by handing him a written notice that you don't intend to renew at the same time you give him the original order.

Let your company's legal resources review the terms of any software license you buy. In all likelihood, your company's lawyer will say that the license has numerous unfavorable terms and that he recommends against entering into such an agreement. However, he is also likely to add that he recognizes that there is no real alternative. Negotiating with vendors is also discussed in the section
“Reviewing Contracts with Vendors”
on
page 175
in
Chapter 6, Managing the Money
.

Get Organized

Whenever possible, consolidate all your software purchases. Many large software retailers have systems in place designed to help companies keep track of their license purchases, their obligations, expirations, and so on. In a crisis or emergency situation, you may feel that the only solution is to install a copy of a software package that hasn't been paid for. If you choose to go this route, you should ensure that a proper license is ordered and purchased at the same time.

With all the licensing options and permutations available, it can be an administrative chore to track the licenses you have and to make sure that when you're buying additional licenses, upgrades, or software and maintenance plans that you're doing it for the licenses you actually own.

Keep records of your license purchases: quantities, dates, vendors, and so on. For licenses that need to be renewed periodically, keep track of the start and end dates, and the same for support and upgrade plans. It is not unusual for organizations to get letters and inquiries from their software vendors' compliance department, or from a software vendor association, about the legitimacy of the licenses in use. Having good documentation readily available can go a long way to help ensure a simple inquiry doesn't turn into an audit or legal matter. Make sure that everyone in IT is fully aware that it's against the law and company policy to pirate software. Advise users that it's against company policy to bootleg software, and any unauthorized software will be immediately deleted when found.

5.5 Cloud Computing

“Cloud computing” or “computing in the cloud” refers to making use of resources on the Internet (i.e., the “cloud”). These resources can include servers, data centers, storage, and applications. Also, these resources can generally be accessed only using a web browser. The advantages of cloud computing is that it dramatically reduces, sometimes even eliminates, associated infrastructure costs. While cloud computing is often quickly adopted by small start-ups that don't have the capital to invest in IT resources, it has made significant inroads into established organizations as well. Cloud computing is also seen as a solution that will help control internal IT staffing levels, although 49 percent of IT leaders in a 2011
CIO Magazine
survey said that cloud deployments wouldn't affect IT headcount.