Software Licensing
By Russ Finney
May 19, 1997
Software licensing practices are slowly evolving into a new paradigm. With the advent of mass distribution of software electronically or via the internet, the old approach of purchasing a "package" from a vendor is becoming increasingly out of date.
This week's column will examine the approaches and issues associated with these new forms of software purchasing. Companies who are able to understand and utilize these agreements can realize substantial savings in software licensing fees. With the proper use of license tracking software , they can also reduce the administrative burden in keeping up with the software license inventory.
The Umbrella Approach
Two software situations are generally occurring within companies. Enterprise software packages are being purchased which reside on servers and mainframes. Productivity software is being purchased which is mass distributed to PCs. In both cases, a form of "umbrella" agreement can be negotiated which provides wide spanning license coverage.
A good first step is to read some of the current articles which are highlighting these issues and opportunities:
Little License Left for Software
This article by Alan S. Kay (CommunicationsWeek) tackles the licensing issues head on. It makes valuable suggestions for determining which license model may be optimal for your business.
Let the Buyer Beware
By John D. Ruley (Windows Magazine). NT once stood for New Technology, with version 4.0, it means New Tariffs. This article provides a good overview of the NT 4.0 licensing scheme.
Get Your House In Order
By Charles Waltner (CommunicationsWeek). New management tools are helping Fortune 1000 companies get their software houses in order - often delivering thousands of dollars in savings.
Software Licensing Problems
Mike Schelp of Ventana Consulting has written a paper which highlights software license opportunities and a short process for reaching these solutions.
Vendor Licensing Information
Understanding the software license alternatives offered by Microsoft are vital to every MIS group. Listed below are the important links for obtaining their current licensing information and options:
Microsoft Licensing & Software Management Guide
Microsoft's huge software licensing information site. This covers both concepts as well as the company's licensing agreement alternatives. Good tips for organizing your approach to license inventory management.
Microsoft Open License
Tiered pricing, based on initial order quantity. Order multiple licenses and receive a certificate with point credits toward specific Microsoft product categories. Good for small to medium sized companies.
Microsoft Select License
Price level is determined by a two-year forecast of license acquisitions by category. Microsoft sends one full set of CD-ROMs for each product pool. Good for large companies.
Some hardware vendors have also created good sites for obtaining licensing information:
digital Software Licensing InfoCenter
This licensing information site maintained by digital gives a brief overview of some of the options available for licensing server based software.
A Legal Checklist
When reviewing and negotiating your agreements, the following links may also be helpful:
Licensing Checklist
A compact reference tool from Orrick, Herrington & Sutcliffe LLP which covers the main clauses involved in drafting and negotiating software license agreements.
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Copyright © 1999, Russ Finney, All Rights Reserved. Originally written for The Mining Company.
