Virtual software: Avoid confusion
Nothing has thrown software licensing for a loop more than the dramatic spike in desktop and server virtualization. A survey by IT solution provider F5 found that 90 percent of enterprises intended to deploy a virtualized environment in 2009.
"Understanding the licensing implications of running virtualized environment lags far behind actual implementation," laments Express Metrix's Barker. "IT often doesn't understand how virtualization impacts software licensing and vendor licensing language often doesn't explicitly address virtual environments."
If you run the same software within different OSes on your desktop, do you need multiple licenses? How about if you stream the apps from a server? The answer depends on a number of factors, including the virtualization technology you employ.
For example, if you're running an app inside multiple virtual environments on one physical machine, à la VMware or Microsoft's Hyper-V, you'll usually need a license for each instance of that app you've installed, just as if they were running on separate physical machines, says Barker.
If you're streaming that app from a server -- say, via Microsoft Application Virtualization -- the rules are slightly different. Though only a "stub" of the entire software package may be installed on a desktop, you'll still need an individual license for each machine on which that app is run.
In situations where the entire app runs on a server on behalf of multiple desktop clients -- say, a Citrix box serving up Microsoft Visio -- you'll still need a license for every end-user machine that runs it, says Barker. But here the usual rules for concurrent use don't apply. So if only 25 people can access the app at the same time, but 50 people in your organization use it at one time or another, you'll need 50 licenses.
Even then, there are always exceptions, he adds. For example, Windows Server 2003/2008 Datacenter allows for unlimited virtual machines running on the same physical server, as do some enterprise versions of SQL Server.
The best solution? Rather than installing your VM environment and hoping for the best, it makes sense to revisit your licenses and negotiate a new deal with your vendor.
"The most sophisticated licensors and licensees now include specific terms about whether and how a licensee can run the software in a virtual environment," says Greenberg Traurig's Meeker. "Those terms would include, for instance, whether the software can be accessed via virtualization, and whether outsourced employees can use it."
Payment: Define your terms
If you haven't figured out how you're really using the software and carefully defined the terms within your licensing agreements, you're probably either out of compliance or paying too much for what you've got.
The problem? There are almost as many ways to pay for software as there are apps. You can pay a set amount per seat, concurrent user, CPU cycle, logical partitions of a CPU, or some combination thereof. You can pay a single price upfront, spread your payments over time, or pay an annual subscription fee for the use of the apps.
Larger companies may offer multiple ways to pay, depending on the application. They might sell licenses on a per-machine basis for productivity tools while selling them per-device or per-user for server software. Open five instances of an Office app on a desktop and you're probably covered by a single user license. But if you're a CAD user, you may need a separate license for every copy of the software opened on your machine.
Even seemingly simple terms like "user" or "employee" can lead to misinterpretation and noncompliance. For example, most licenses do not include outside contractors or temps within their definitions of named or concurrent users, says Meeker.