Posted by: Randy Kerns
One of the most frequent questions that I get is how the licensing for a particular storage feature or software application is handled.
The variations from different vendors have left IT professionals wary of the complexities and costs. The wariness presents itself in different ways – pure distrust for certain vendors or frustration with having to plan for operational expenses not originally considered when estimating the acquisition price. There is often an interesting backstory around a previous issue with licensing.
Licensing is a way for vendors to get paid for their investment in developing a product or feature. The idea behind licensing with variable cost is to provide a graduated scale where the amount paid (the license cost) increases as value is gained. There may be inconsistencies in the applicability of the scale and — from a customer viewpoint — the value gained may not be the same for everyone.
The licensing terms can vary significantly, and the variance is one of the basic frustrations. Vendors may license storage hardware and software by capacity (raw capacity, usable capacity or actual space used), number of servers attached, initiators, network ports connected or processors, type of processors or the size of IT environments.
While a specific product may be clear on the licensing terms and the vendor can clearly explain the terms, IT is typically dealing with more products and more than one vendor. The inconsistency compounds the licensing frustration.
Administration of the licensing is also an aggravating area. There may be extra concerns when managing the licensing. How is the reporting done? Is there value for IT to move data, change configurations, or discontinue systems early to save on licensing fees? Managing to the details of licensing or even having to think about it can be aggravating.
For some storage systems where add-on, high-value features result in extra charges, vendors have established new practices for competitive purposes. Some have an “all-in” philosophy where there is no extra licensing charge for features. This hits at the high profit area for other vendors, which is why their competitors go to all-in licensing.
Another competitive area is where basic system capabilities or features have a charge (think of it as a one-time license) that the customer pays at the time of purchase of the hardware but it is tied to a specific serial number system. When new hardware is purchased, the software must be licensed again for the new platform. As a competitive area, some vendors allow the license to be transferred to new hardware.
Some of the angles that vendors use may give them opportunity to maximize their revenue or are really fair in receiving profit from their investment. The problem is the confusion and inconsistency when multiple vendors (and even multiple products from the same vendor) are considered.
(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).