Licensing Cloud Resources and Services
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
- Licensing for virtual environments should involve contracts and system
- Software licenses should be included as part of an IT resource capacity plan forecast
- When allocating VMs from templates, be sure there are provisional licenses
- 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
- Leverage tiered hypervisors from different vendors aligned to various service
- 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
- Per-physical-server licensing can be a good fit for applications that can be
- If your organizations is concerned about hardware costs, then also focus on software
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