In the 1996 movie, “Jerry Maguire,” character Rod Tidwell chanted the somewhat famous line “Show me the money!” He was attempting to goad Jerry Maguire into getting him a larger contract and to believe in himself. Fast forward 15 years and Software Asset Managers are screaming a similar chant, “Show me the data!” The chant is different, but for similar reasons: to goad System Administrators into providing the necessary data for Software Asset Management (SAM) teams to do a better job of understanding license metrics, managing deployments and entitlements and benchmarking software costs. The data for these three activities is different yet is derived in similar ways. “Show me the data” must be on everyone’s lips as teams work together to lower software costs.
Some background is in order before the reader becomes hopelessly lost and instead thinks too much about infamous sports movies. SAM managers need an understanding of software information to do their job. This information is in the form of several data feeds that relate directly and indirectly to software. Data can be generally categorized into four areas: software entitlement data; software deployment data; hardware data; and software licensing and cost data.
Software entitlement data: Includes software version, product counts and metrics as well as contract terms. This is normally considered the “proof of purchase.”
Software deployment data: Usually comes from an automated discovery tool. In addition to actual installation information, product version, user counts and usage metrics are often captured as required by software contracts.
Hardware data: Provides evidence of server size, location and operating system type. Increasingly, software is licensed by hardware related metrics such as cores, sockets, CPUs or clock speed. Having hardware data on hand will allow the SAM manager to ensure that she has the right metrics in the contract.
Software licensing and cost data: Benchmarking software costs is helpful for the final task. How much are other companies paying for software? What are my licensing options? What is the lowest cost option?
Applying the Data
All software requires a license. That may be a very remedial statement. Whether it is free-ware or expensive-ware, software is licensed. Licenses have requirements called metrics and those metrics create exposures. Exposures can increase software costs through self-audits, vendor imposed audits or regular contract true-ups. One of the most important jobs of a SAM manager is to limit exposure. Limiting exposure will lower software costs. Understanding license metrics coupled with hardware data and entitlement information will help limit licensing exposure.
The first step to understanding license metrics is with the contract itself. To name a few, software can be licensed by; user (number or type), by server metrics (CPUs or memory), by business metrics (budget size or number of employees) or by location. The contract will define the metric in terms of meaning to the software in question. For instance, Enterprise Resource Planning (ERP) systems can be licensed by orders processed or employees. Do consultants count? That level of detail is a requirement to limiting exposure. Once the metrics are defined and understood, they need to be applied to the manager’s situation. This is where hardware data will come in handy. Knowing the number of cores or the clock speed of your specific server will allow you to match contracted or entitled metrics with deployed servers. Ideally, this information will be captured automatically and stored in an electronic repository, normally referred to as a Configuration Management Database (CMDB).
The next step in lowering software costs is to manage the entitlement and deployment equation. Proper planning is reflected in equilibrium of entitlements and deployments. Data plays a huge role in solving this equation. Software entitlement data provides the proof that a license was purchased or otherwise acquired. Normally, this is in the form of a contract or invoice. Forward-thinking SAM managers will house this data electronically in the CMDB so that matching can be done automatically on an exception or event basis. Further benefits of the CMDB method include an “audit proof” environment and easier planning for growth. Software deployment data is an indication of a product or license that is installed on a physical or virtual server. Deployment data must be captured automatically and stored in a CMDB. If not, it is nearly impossible to track software installations and ad hoc changes to the licensing environment. Ad hoc changes are usually unplanned and introduce potential exposures if entitlements are not available. Once both types of data are available, automatic matching and reporting can occur. This reporting should occur regularly and can be easily checked to ensure that an organization is audit-ready.
Finally, benchmarking software costs is the task of comparing your costs with other known price points. Cost information may represent the most difficult of the four types of data to acquire. However, with some creativity, a simple benchmark can be created. Cost data is available both internally and externally.
Internally, look for other contracts from the same vendor that may include a license for the same product. For example, an Oracle license purchased this year should be close to the cost of a license purchased last year. Alternatively, competing products can be used to set the value of a specific product. For example, although Oracle and SQL Server are not the same database, the function is similar and therefore the cost should also be similar.
Externally, look for published vendor’s price lists. Although they are generally a “list” price, assumed discounts can be extrapolated and used for benchmarking purposes. Some SAM consultants have tracked this information for the express purpose of benchmarking client costs. Reasonable efforts should be made to improve an organizations software costs.
“Show me the data” is a phrase that can be uttered by SAM managers in an effort to ensure their organization is both audit ready and paying the lowest cost for software. The steps along the path to lower software costs are easily understood when a foundation of data is built. Once hardware data, entitlement and deployment data and licensing and cost data are available and organized, the job of the SAM manager is to use the data. Understanding license metrics, matching entitlement and deployment and benchmarking costs will lead the organization to be audit ready and to lower software costs. Taken together, this is the Holy Grail of Software Asset Management. Show me the data!