Why Identity-based Licensing Is Killing Off the Software Asset Management Industry

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Why Identity-based Licensing Is Killing Off the Software Asset Management Industry

killing software asset management

The pressure to ensure that employees are given the software tools they need can compel an organisation towards excessive or imprudent spending. Acquiring too many product licenses (over-licensing), wastes resources and according to Aberdeen Essentials organisations with more than 500 employees in the US and UK have collectively paid over $7 billion for software that isn’t being used. Being under-licensed, on the other hand, leaves organisations open to a potential lawsuit. The ideal situation is that everyone within an organisation has access to the software that they need in order to do their job, but without any nasty financial surprises due to license agreement violations. That’s where Software Asset Management tools can be useful for your customers.  

Software Asset Management (SAM) is a business practice that involves optimising the purchase and deployment of software applications within an organisation. Effective Software Asset Management ensures that software is legally available to users that have a legitimate need, while at the same time safeguarding against unnecessary spending. Gartner predicts that Software Asset Management  (as part of a software optimisation strategy) can help organisations save up to 30% on software costs and its therefore unsurprising that the Software Asset Management Market is forecast to reach $2.32 billion by 2022.

Traditionally, software licensing and Software Asset Management are independent business functions, with product licensing driven by a software vendor and Software Asset Management a necessary requirement for the licensee. However, the software licensing landscape is currently undergoing a dramatic transformation, one which may have the unintended consequence of killing off the Software Asset Management market.

The current trend in software licensing is shifting away from perpetual licensing and ISVs need to provide greater flexibility in terms of the licensing models that they offer their customers. Servicing these new requirements means having granular control over your products, something which traditional, license key solutions are simply not up to the task of providing. As a result, a new solution has emerged that efficiently meets these new market challenges. This new solution is identity-based licensing and the tight mapping between end-user and software product means that strict inventory control is already inherent in the software licensing solution. This opens up the possibility of helping your customers better manage their Software Asset in future, without the need for specific Software Asset Management tools.

The strategic goals of Software Asset Management  include the following:

  • Track software licenses and software deployment in order to remain compliant
  • Reduce software costs by eliminating or reallocating underutilized software licenses
  • Deploy the right kinds of technology more quickly and reliably,  therefore improving productivity
  • Streamline and/or automate IT processes (such as inventory tracking and software deployment) therefore minimising overheads
  • Establish ongoing policies and procedures surrounding the acquisition, deployment, usage and retirement of software in an effort to reduce costs

All of these strategic goals are met as standard with identity-based licensing. Licenses are assigned to individual users or groups of users via a simple web-based administration tool or triggered by an external system like a CRM application. This greatly reduces access friction, therefore, streamlining deployment, improving productivity and ultimately reducing costs. The lack of license keys to issue, track and manage also creates operational efficiency throughout the software life-cycle, removing the necessity to dedicate full-time employees to license reconciliation and internal license admin.

In production, the status of the licensing system in terms of who is accessing what and who has access to a valid license is also always available in real time and licenses can easily be re-harvested between users or retired at the click of a button. You, as an ISV, obtain granular control over the software licencing lifecycle plus the ability to easily track and monitor licence usage.

Your customers, on the other hand often cannot meet all of their tracking and reporting requirements with one Software Asset Management tool and therefore eye-watering complexity is introduced. In order to achieve effective Software Asset Management, customer organisations use a variety of tools, which together help them build a (blurry), picture of their software assets.

Typically the following Software Asset Management  tools will be used by your customers:

  • Software inventory tools – used to intelligently “discover” the software installed across a computer network.
  • License manager solutions – provide an intelligent repository for license entitlements, which when integrated with a software inventory tool, can provide a view of whether an organisation is under-licensed or over-licensed.
  • Software metering tools – monitor software usage across a network and can also provide real-time enforcement for usage-based licensing
  • Application control tools – restrict what and who can run a software application, often also covering security and other risks.
  • Software deployment tools  – automate and regulate the deployment of new software.
  • Product catalogues – capture top-level product-specific information such as name, edition, version and license agreement types. Product naming conventions enable mapping between the different tools used in composite Software Asset Management solution.
Using a combination of inadequate tools is a bit like using pliers, a spoon, and a knife to crack a Walnut. One tool does not meet all of the anticipated challenges, meaning that long-term the products offer limited value and costs grow in order to meet requirements. Unfortunately, this is a common scenario.

With an identity-based licensing solution, there is one layer. Users of a software product enhanced by an identity-based licensing solution have an individual user account, which they sign in to each time they want to access an application. This applies irrespective of whether they are using a desktop, web or mobile application. The client application will only grant access to the end-user if they have been both authenticated and authorised, allowing a very tight mapping between end-users and software products. Once an end-user has an active session, they are only able to access the products for which they have a valid license and previously grey areas of access and inventory are therefore removed.

Due to the tight control and information offered by Identity-based licensing, software inventory, license management, software metering and software deployment are all already part of the licensing solution.  Onboarding and deployment can be done online, either for individuals or for teams, and activation is automatic once a user downloads an application and logs into it. If users leave their company, their access to the software application can immediately be revoked on the backend. ISVs can also push new products to existing customers using the same admin system that manages their entitlements.

At a basic level, identity-based licensing enables a real-time view on licenses issued, consumption of licenses, licenses expiry and similar data. At a more advanced level, identity-based licensing can show usage data across a whole suite of products. This opens up future possibilities of being able to help your customers better manage their software assets – which they will love! With identity-based licensing everything is already very tightly controlled and usage is directly mapped to an authenticated user. The tool that issued the licence is the same tool that can track, monitor and manage active licenses.

For many organisations, the goal of implementing a Software Asset Management program is focused specifically on balancing the number of software licenses purchased with the number of actual licenses consumed or used. By using the 10Duke Entitlement service, a software publisher can offer its customers tightly controlled licensing and reporting data at the click of a button, removing their need to worry about SAM at all. Contact us to find out more.

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