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Licensing Cloud Resources and Services

Greg Schulz

Licensing and fees apply to physical, virtual, and cloud resources and related services. How products and services are licensed varies, from capacity or performance to per- seat, -device, or -user, along with enterprise and site options. Software or tools may be licensed on a one-time, perpetual basis or on a time-duration basis. Perpetual-use licenses may be for a specific server or workstation or for a given number included in the fee, with updates or support also included for some amount of time.

Software and tools can be licensed by:

  • Flat fee per single or multiple copies, with or without support
  • Perpetual (no time limit) until you buy a new version
  • Limited time during which to use the software, get updates, and receive support
  • Commercial, education, government, or personal use
  • Enterprise or organization-wide and site-based
  • Individual applications, systems, servers, or workstations
  • Physical server or workstation instance
  • Per CPU (single, multicore, or socket-based), physical or virtual
  • Unlimited or on an hourly rate basis
  • Per user, seat, or workstation (total or concurrent in use)
  • Volume purchasing programs and tiered pricing

In addition to licensing fees, other fees cover maintenance and support. Consider tools with associated licensing and ongoing maintenance costs from a return-onimprovement basis. That is, does a tool help improve your environment [including supporting growth demands, maintaining or enhancing quality of service (QoS) and service-level objectives (SLOs)] while reducing per-unit costs? This requires insight and metrics to know how your environment is currently running and to determine the impact of a contemplated change. In addition to licensing application software, associated tools, and operating systems, virtualization adds another component or layer to be included. Depending on the hypervisor and tools being used, additional licensing fees and maintenance costs will probably apply. When using a cloud service for virtual machines or applications, licensing fees may be included as part of the package or subscription, or you may have to bring your own licenses as part of your VM.

Some hypervisors are available for free or at a lower price if they are not included with other software such as Microsoft Hyper-V and Windows Server. Management tools and additional functionalities may be required to be licensed to use with lower- cost or free versions of hypervisors. Hypervisor vendors including Citrix, Microsoft, and VMware, and third parties, have license management tools. Software licensing should not impede the value of virtualization or clouds to enable mobility and agility. This means making sure that your licenses are not restricted to running on a specific machine or given location. Also look into whether your current operating system and application tools licenses can be transferred as is, or if they need to be converted for free or a fee to be used in a VM or VDI environment. Server consolidation reduces physical hardware costs, but it does not by itself reduce software licensing fees. Depending on how you consolidate the number of VMs on a PM, the number of licensed guest operating systems may increase with their applications and VM fees. Consequently, tracking software or other services fees and licenses is as important as tracking IT resources. This means having reporting and metrics to show what tools you have, what licenses are in use, what are available for use, and what additional licenses may be needed.

A different approach that most software tool or service providers have been hesitant to embrace is a fee based on the benefit you receive from using the tool. This is a more complex model without clear metrics, and this complexity, along with the subjectivity of the returned value, is often cited as the reason for using a more straightforward fee model. However, there are opportunities for hybrid fee systems that combine some baseline or legacy fee with a bonus for the vendor if its tool is more productive. For the customer the benefit is lower initial cost, while any premium paid to the vendor is made up for by savings realized. Instead of profit sharing, think of it as "productivity sharing," with a vendor, supplier, or service provider benefiting by partnering with a customer. When or if this will happen is anyone's guess. However, part of what drives innovation is looking at things differently, so perhaps we will see someone enabling customers to do more by truly partnering with them instead of just delivering sales and marketing lip service.

Software, tool, cloud, and virtualization licensing consolidation involves the following considerations:

  • Licensing for virtual environments should involve contracts and system administrators.
  • Software licenses should be included as part of an IT resource capacity plan forecast process.
  • When allocating VMs from templates, be sure there are provisional licenses available.
  • Know how and when VMs are counted; is it an annual spot check or an average?
  • Have a license review performed to ensure that you are getting the best ROI on those resources.
  • Leverage tiered hypervisors from different vendors aligned to various service needs.
  • Align the applicable tier of hypervisors and tools to the level of service needed.
  • Per-VM licensing can be good fit for systems that do not lend themselves to consolidation.
  • Per-physical-server licensing can be a good fit for applications that can be consolidated.
  • If your organizations is concerned about hardware costs, then also focus on software fees

Read more IT Performance Improvement

This article was excerpted from:

The amount of data being generated, processed, and stored has reached unprecedented levels. Even during the recent economic crisis, there has been no slow down or information recession. Instead, the need to process, move, and store data has only increased. Consequently, IT organizations are looking to do more with what they have while supporting growth along with new services without compromising on cost and service delivery.

Cloud and Virtual Data Storage Networking looks at converging IT resources and management technologies for facilitating efficient and effective delivery of information services, including enabling of Information Factories. Regardless of your experience level, Schulz guides you through the various technologies and techniques available for achieving efficient information services delivery.

About the Author

Greg Schulz is founder of the Server and StorageIO group (StorageIO), an independent IT industry advisory consultancy firm. He is also the author of the books The Green and Virtual Data Center and Resilient Storage Networks. He is a popular blogger and also a fixture on Twitter.