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Dos and don'ts: How to save big bucks on software licenses

Businesses are losing a bundle on software licenses, according to licensing expert Laura Didio. In this story, Didio and several IT pros share their money-saving license management tips.

Businesses lose millions each year because they are too lazy to do a good job managing software licenses, according to licensing expert Laura DiDio.

IT managers may realize poor license management costs them money and increases the risk for penalties. Yet, they still procrastinate to create effective license management processes, said DiDio, principal of Information Technology Intelligence Corp (ITIC). They don't jump through hoops to take charge and figure it out either, said DiDio. "It's like, 'I know I should clean out the garage, but it's a sunny day today so why should I?'"

Several IT professionals attending last week's Windows Decisions conference in Chicago, Ill admitted they have weak license management practices, too. Yet, some have home grown management practices in place that could rival any software company. DiDio and the attendees shared what to do to keep software up-to-date, computers in compliance and save money by not spending too much on licenses.

Don't buy licenses you don't need, and don't overbuy licenses. Some organizations, for example, will buy a server license but not buy enough client access licenses (CALs). "They're out of compliance and in line for penalty," DiDio said.

Do invest in license management tools. Three weeks ago, Kevin Rost bought Track-it! Rost, manager of network technologies at Autostock International in Barnaby, British Columbia, took charge of his system. Track-it! is a Web-based PC management system from Tampa, Fl-based Blue Ocean Software. "We'll use it for licensing right through to hardware," he said.

Do have a method to know if you're paying too much for licenses. Even if it means you buy everything through a value added reseller (VAR). That's what Rost does. "Everything we get is with a license directly through Microsoft. So, it's really a registration process," he said. "We don't actually go out and buy a copy of a license. We get a piece of paper telling us we can install that software or application."

Do create an in-house auditing system and keep licenses updated manually like Rick Woffard, Information Systems Coordinator at Hydro-gear, in Sullivan, IL. "We ensure compliance through the in-house auditing," he said. Yet, "We probably don't know if we're paying too much for software," Woffard admitted with a laugh. No, he does not have a method to make sure his company gets a good deal.

Do figure out what's on your network for security's sake, said DiDio. "Different versions of software require different patches." If you know what's there, you'll have an easier time getting the right patches in place in a timely manner. Also, "if you're not getting a true account, you may be gypping yourself out of higher licensing discount levels."

Do use an Access database to maintain all licenses, according to Tim Fenner, a network and systems administrator at Sun Prairie, WI-based Independent Pharmacy Cooperative (IPC). Fenner's database shows where licenses are installed and what kind of system they're on. If there's ever a question, it saves the day, he said.

Do audit machines once a year or bi-annually, Fenner said. That way he makes sure everything is accurate. "Then I also run reports based off it."

If you have to, do walk around and kick somebody off their computer to see if it's updated. Fenner said he's tried using network analyzers that get information from PCs. They're not effective, however, "if some of those PCs are down or if the PC doesn't return the correct the results," he said. "It's too flaky to base my licensing on."

Do ensure compliance with that Access database, too. You need as many operating systems for how many PCs you have. "So that's how many licenses we buy," said Fenner.

"We don't aggressively go after Microsoft," Fenner said. His company relies on its software vendor to get the best possible prices. "There's no way for us to make sure we have the best price available," he admitted. Fenner just assumes he's getting it.

Do stick with the same vendor. "Our vendor knows licensing inside and out so it's a trust level," said Jason Wigel, a network and systems administrator at Columbus Community Hospital in Columbus, WI. "We've been with our vendor for two years now. Our sales representative hasn't changed. We have a very good relationship."

MS is now using the threat of the audit, DiDio concluded. So, don't slack. "The ignorance of the law or the terms and conditions of your licensing contract is not an excuse for good management."


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