I’ve talked to several companies over the past few weeks who believe that their software license management problems will disappear with the move to Cloud and SaaS delivery models. Unfortunately, your licensing challenges are not going away, however you will be dealing with a totally new set of problems:

* Hosted vs. On Premises:  Certainly, one of the biggest advantages of moving to Cloud or SaaS based applications is reduced hardware infrastructure and personnel costs required to run business applications.  The software asset management (SAM) challenge this presents is that, even today, most companies have a hard time discovering all of the machines and applications running on their own networks.  Now, companies will need to get creative about inventorying hardware and applications that run in hybrid or public (Amazon, Rackspace, etc.) cloud environments.  While the Cloud brings more flexibility, it also limits your visibility. New Software License Optimization tools are required that allow organizations to accurately inventory virtualized cloud environments.

* Subscription vs. Perpetual:  With perpetual license models, companies typically true-up or renegotiate every three years.  Although painful without an automated software asset management solution, companies spend lots of time preparing for these events.  Since they only happen every three years, they seem somewhat manageable.  With Cloud and SaaS applications, companies will need to insure they are optimized EVERY MONTH! A major challenge with SaaS applications is making sure that you are not over-spending on licenses, either because some people are not actually using the application, or because you have purchased the “Cadillac” (or Bentley) subscription when the Chevy would meet users’ needs.

SOURCE: flexerasoftware.com