Changing world of software licensing and the Cloud requires a new order for CIOs

31 Oct, 2012

CIF in support of its launch of a Special Interest Group focused upon Licensing & Value Management for the Cloud has published an introductory white paper entitled ‘Software Value Management and the Cloud’.  Written in partnership with new CIF member, Concorde Software, the paper looks at the benefits and learning that can be applied to Cloud adoption by exploring the evolution of software compliance, the introduction of Software Asset Management and its development into Software Value Management for the Cloud.


Software Value Management (SVM) is probably best defined as the practice of informed active governance over access, utilisation, licensing, and cost efficiency of software throughout its useful life within an enterprise regardless of the IT deployment models used or methods of access. It comprises a range of processes or modules that together enable effective governance of the software estate.


Based on the practical research around Cloud adoption in the UK, it is evident that most organisations, based on the different application areas and operational needs are likely, over time, to have a combination of on-premise, hosted, SaaS and private/hybrid Cloud solutions. In fact, this is likely to become the norm and therefore a key issue in future IT strategy has got to be in demonstrating good governance of IT across a broad distributed network and variety of managed and unmanaged deployment options.


Whilst Software Asset Management (SAM) continues to play a key role in ensuring compliance and best practice for traditional licensing requirements, the changing world of licensing brought about by multiple deployment models requires a new order to manage it. Enter ‘SVM’ which now offers organisations the ability to identify, model and manage the impact of this new order on their business, fundamentally providing a governance framework from which cost and efficiency benefits can be driven.


Furthermore it puts the CIO/CTO in the driving seat when it comes to negotiating licensing and maintenance activity by enabling rational and informed decisions to proactively manage licenses, contracts and relationship across the software delivery platforms and delivering true value back to the business.


Martin Prendergast, Chairman of the new CIF Special Interest Group on Licensing and Value Management, and CEO of Concorde Solutions stated: “What we refer to as Software Value Management is high on the agenda of the cost-conscious CIO. Many organisations are poorly equipped to deal with the challenges of software licensing in simple environments, let alone with complex virtualised or Cloud models.  This makes the challenge of unlocking the vast opportunity it represents a daunting task. Confusing market messages also leads to the fear of deploying the wrong solution.


“One of the biggest challenges faced by enterprise companies today is the management of their software license estate not just to ensure against non-compliance, but to proactively drive best value in procurement and reuse. By necessity, companies endeavour to demonstrate ethical and efficient working practices but increasingly pressure from the biggest and most strategically important software vendors, who want to be correctly paid, is causing software compliancy to become a critical business issue.” Prendergast added.


The paper refers to the need for both end users and software vendors to embrace the opportunity for change as the Cloud becomes a more critical element of IT strategy. The subscription nature of contracts means that customers will be looking to see continual value from a vendor over a number of years and as such is redefining the business case and justification of software investments.


Andy Burton (pictured), Chair of the Cloud Industry Forum and Chief Executive of Fasthosts, adds:


“The relevance of the hybrid IT environment, combining on-premise IT with hosted or Cloud services, is one that sits well for most organisations in principle. Further, the number of Cloud service providers is expanding rapidly, and major ISVs are creating new licensing models or even adjusting existing ones to provide additional licensing flexibility. Given these progressive developments, end users are looking to the industry to assist and educate them when it comes to managing software assets across their full lifecycle, regardless of the distributed environment.


“There is no doubt that with the advent of the Cloud many organisations may be thinking the complexities of software licensing are over and value can be more easily measured. Far from it: license challenges still exist and the difficulty for many compliance officers and IT or procurement departments remains how to manage the full estate of software assets and how best to access new technology to drive best value,” he concludes.


For further information on white paper 9 Software Value Management and the Cloud people can go to the website

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