Microsoft’s budding new thought child is Power BI and although Microsoft is quick to sing its praises, what sort of tangible benefits does it hold for you and your company? There’s no point jumping on this Power BI band wagon if it doesn’t match your business goals and needs. At MetrixData360, we believe in educating our customers and making sure that they are only buying the software licenses that they need, and not what the sales rep says they want. So today, we’ll go over everything you need to know to make sure Power BI is the right investment for your company.
What is Power BI?
Officially released in 2015, Power BI is an umbrella term used to describe a number of data collection apps that is offered by Microsoft for the purpose of analyzing and visualizing raw data. Praised by Gartner for its exceptional analytics and business intelligent platforms, Power BI has come to be known as a business essential tool for customers of all sizes and every industry, from construction to finance to insurance. The apps that comprise the interwoven matrix of Power BI include:
Power Pivot: Allows you to import data from a variety of sources
Power Query: Allows you to transform data
Power View: Helps you to visualize the data that has been compiled
Power Map: A nice 3D feature that can create a better visualization of the data
Power Q&A: An engine for question/answer style interactions with your data
Together, with all these interweaving parts, Power BI customers can perform such demanding tasks like examining what-if scenarios, conveying business models in an easy to read format, and forecasting business requirements.
Pros of Power BI
Affordable
You don’t have to worry about breaking the bank when you sign up for Power BI, as Power BI even has free alternatives such as the Power BI Desktop which can be downloaded to create interactive reports. However, these free versions are quite simplistic and limited when compared to Power BI’s true processing potential, that performance capability is saved for the paid versions. Pricier models like Power BI Pro allow users to share data and dashboards and Power BI premium allows for much deeper and meaningful insights, as well as on-prem reporting. If you already have an Office 365 plan, you may have Power BI as an added feature at no additional cost. Want to know how Power BI relates to SQL Server Licensing? Check out our article: SQL Server Licensing Explained for more information.
Customizable
If you have a very specific look you’d like to achieve, then Power BI can make it happen, offering a variety of custom visualizations, available in the Microsoft marketplace in addition to general visualizations used for polishing up reports and dashboards.
Excel-User Friendly
You have the option of uploading and viewing your data in Excel if that’s your thing. Power BI is built using the same interface as Excel, so if you know your way around an Excel spreadsheet, then you’ll find using Power BI to be both easy and familiar. Even if you aren’t exactly an Excel wizard, Microsoft has a wide array of tutorials, blog posts, and other available learning resources to assist you up this learning curve. There’s also a budding community of Power BI experts you can turn to if you need an extra helping hand.
Cons of Power BI
Difficult to Use
Despite the wide array of resources available, Microsoft is known for its hyper complexity when it comes to their software and Power BI is no exception. Since Power BI is merely a collection of apps, that means to properly maintain Power BI and get it to create the reports your looking for, it will require learning what each item in Power BI’s ensemble does and how it relates to the rest of the structure. This also means if Power BI isn’t working, you’ll have to go through the task of figuring out which app is broken and why.
Not Very Versatile
The expression language that Power BI uses is DAX , which is not known for being the easiest language to work with or master, once again adding to the learning curve. When compared to its competitor Tableau, Power BI is often viewed by customers as less flexible due to the fact that at the end of the day it is designed mainly for visualization purposes. Customers need to be careful to account for unique fields that can create inaccurate graphics and tables.
Large Data Sets Cause Lags
There is a cap for the digestible material that Power BI can handle at any given time, especially if you only have the free version at your disposal. If your business is on the smaller side, this limited space may not be an issue, and even such problems may be counteracted with a few space saving techniques such as writing simpler queries or splitting the queries into several different components. If you want to expand your Power BI capacity, you’ll have to upgrade to a pricier model.
Conclusion
Power BI has become an excellent and essential tool for many companies but just because it is the popular option doesn’t mean its necessarily the option that will best suit your business needs. At MetrixData 360, we teach that you should buy based on the data, based on what you know you need and not on what you think you want. Which of course, is where software asset management comes in. SAM is an excellent way of gaining control over your delicate software infrastructure by knowing what you have, what you need to license, and whether you are using your software in accordance to the licenses that you have. If you’d like to know more about what SAM is and how it can save you money, you can check out our article: Software Asset Management: Its Importance, Purpose, and How it Saves Money.
Oracle’s ULA: Ready to Leave or Willing to Stay?
Consequences of Both
When your company is in an Oracle Unlimited License Agreement (ULA), the deal is that you hand over a single up-front payment and you get access to the licenses for a select set of Oracle products. With the volatile market, you may be asking if you should certify your ULA, and what it takes to complete an Oracle ULA Certification?
Of those select products, you can order an unlimited number of licenses for a set period of time, either three years or five years. The only costs in between renewals are the maintenance fees, which are 25% of the cost of the license. There are many reasons an organization would find this set up appealing:
It provides predictability in terms of costs, giving organizations the opportunity to plan for that expense.
It’s ideal for heavy users of Oracle products.
It puts a wide variety of products on a single payment, making the process of purchasing licenses that much easier.
The risks of having your ULA audited are minor.
It is sometimes purchased for the preparation of a large, long term project to accommodate potential growth.
Despite these advantages, the ULA can also be restrictive or even a trap for your company. Organizations might get into a ULA with the best intentions and end up staying in one simply because it’s easier to renew than to leave.
There may come a point where the maintenance fees no longer make the ULA a suitable option and you think about getting out of the agreement.
What does this shift look like?
At MetrixData 360, we have been working through tricky licensing agreements with Oracle for many years and we want you to know what you can expect and how you can prepare.
Why Certify Your ULA?
COVID
Signing up for a three-year business plan is a great strategy for times of stability and predictability. However, COVID-19 mixed with its following recession and the threat of a second or third wave means that flexibility and the ability to roll with the punches will be a critical element to future business plans. This is something that the rigid structure of the ULA doesn’t provide.
Freedom
Freedom: Flexibility has become essential as our world is rocked by constant uncertainty but also when it comes to the constant shift of technology. The ULA is rather rigid in the products you can pick from, and if new products are released that would fit your organization better, you wouldn’t be able to simply add it to your ULA. When you are in your ULA, you will also experience pressure from Oracle towards products that don’t fit your needs but suit their agenda. ULA customers often experience pressure to move to Oracle’s Cloud products, for instance. You will also find that trying to negotiate the price and products of your ULA is particularly difficult. Getting out of the ULA, even temporarily, will give you the freedom to explore your alternatives.
Cut Potential Costs
Few businesses have gotten out of the pandemic unscathed and many people’s top priority is to pinch pennies for short term cash flow and avoid costs wherever possible. Extending your ULA can often be more costly than simply certifying out, especially when you take into account the fact that support costs can add up over time. This rising expense comes with no added value, Oracle is simply increasing the prices on products you may not even be using because they know you are chained to your chair. If you certify out now, you can also simply sign up for another ULA later when things are more stable.
Oracle hasn’t been faring very well during 2020, as their Q4 report for 2020 has revealed with its release in mid-June. It doesn’t help that May, which was traditionally Oracle’s most lucrative month, was also the worst month of the pandemic.
Oracle is currently faced with record low numbers and many customers are worried this will result in more audits. It certainly won’t result in fewer audits.
While the products within your ULA might be safe, the products that are not a part of your ULA will be targeted. Since you have a ULA, members of your organization could have easily gotten mixed up about which products are covered under the ULA and which are not, meaning that you may be targeted for unlicensed products thinking that they were safe under the ULA.
Certifying Your ULA
When it comes to their ULA users, Oracle tends to be rather lenient and leaves you to your own devices (pun intended). You’re left in charge of keeping track of your own licenses and Oracle rarely bothers to check up on you.
Many organizations, as a result, tend to lose track of their deployments. Employees will install Oracle products after having been granted little or no authorization, resulting in sprawl and shadow IT.
As a result, when you are certifying out of your ULA and it comes time to declare how many licenses you have, Oracle will suspect that your declared number is little more than a guess. After losing the ensured revenue from your ULA, Oracle will happily make up for the losses by checking the state of your sprawl for potential compliance gaps.
At the end of the audit, they might even propose you renew your ULA instead of paying for the compliance gap they find. In other words, once you certify out of your ULA, it’s safe to assume an audit will be coming your way in 6 to 18 months.
What Do You Need To Do Before You Certify Your ULA?
Before you get excited and drop the news on Oracle that you’re letting them go, you’ll need to make sure you have everything ready for your departure.
1. Plan Your Exit
It’s best that you start preparing for your exit well ahead of time, at least 12 months before your ULA is up for renewal. There’s nothing in your contract that says you can’t hand in your certification for your ULA much sooner than the expiration date, and the last thing you want to do is run past the due date and be forced to renew.
2. Understand How You Certify Out
The certification process itself is quite simple. You merely need to write a letter signed by a C-level executive of your company, complete with the number of licenses you are certifying, and it needs to be submitted within 30 days of your ULA’s expiration. Finding those numbers, on the other hand, will be easier said than done.
3. Tell Your Team You Are Certifying Out
Communication between departments is not always top priority in large organizations. It’s important you convey that you are getting out of Oracle’s ULA to any employees who might install Oracle products with the same carefree attitude they expressed while the ULA was still in place.
4. Take Inventory and Perform a Self Audit
This will be the quickest way to decide whether certifying out is the best thing for your business right now. It will keep you from having to guess your usage and exactly how much you’ll save by leaving your ULA.
A self-audit will also ensure that you are compliant with any contracts you have with Oracle, and that the licenses you will be declaring are accurate. Now is the time to chase after any unknown information in regard to sprawl or shadow IT that may have cropped up under your ULA.
This is important to do before you certify out in order to maintain control over the certification process.
Oracle may want to take the lead by offering to certify you and it’s important you don’t let them. This will give them control over a process that they didn’t want to happen in the first place, and they will take as long as they wish.
Get Control Over Your Software Spend
There’s no need to keep a toxic relationship going if all your partner does is take and take, and it’s the same with your Oracle ULA.
Perhaps at one point it served your company well but if the agreement has grown old and stale in your mouth then you should have the freedom to leave and explore your options, lest you be stuck paying for a ULA that is simply a waste of money.
At MetrixData 360, we have your back throughout every step of this process. We can help you conduct a self-audit to create an accurate depiction of your deployment and usage, we know how to talk to Oracle so that you don’t feel pressured throughout these seemingly one-sided negotiations. We will teach you how to keep your head above water in the event of an Oracle audit.
If you would like more information on how MetrixData 360 can help you through an Oracle ULA Certification, you can visit our Audit Defense page.
If you have an Enterprise Agreement (EA) with Microsoft, then you are probably familiar with the EA’s annual True-Up. It’s a straightforward way of condensing a year’s worth of headaches and frustrations around purchasing software licenses into a short period of only 90 days (although hopefully, you’re preparing earlier than that!).
Since these true ups amount to such a large investment for enterprises, it is important that you remain in control of the situation and know what you can and can’t do. Often companies can feel trapped or chained to their chairs in these agreements but with MetrixData 360, we have helped many clients truly harness the potential of their EA. We’ve helped our enterprise clients cut down wastage in their EAs (sometimes hundreds of thousands of dollars have been removed from EA agreements), and we know how to dance this dance with Microsoft.
So in this blog post, we will share some tricks from our experts.
And don’t forget. At any point in reading this article, you would like some further explanation, check out our downloadable EA True Up Guide below:
Tricks for your Microsoft EA True Up
If you have an Enterprise Agreement (EA) with Microsoft, then you are probably familiar with the EA’s annual True-Up. It’s a straightforward way of condensing a year’s worth of headaches and frustrations around purchasing software licenses into a short period of only 90 days (although hopefully, you’re preparing earlier than that!).
Since these true ups amount to such a large investment for enterprises, it is important that you remain in control of the situation and know what you can and can’t do. Often companies can feel trapped or chained to their chairs in these agreements but with MetrixData 360, we have helped many clients truly harness the potential of their EA. We’ve helped our enterprise clients cut down wastage in their EAs (sometimes hundreds of thousands of dollars have been removed from EA agreements), and we know how to dance this dance with Microsoft.
So in this blog post, we will share some tricks from our experts.
And don’t forget. At any point in reading this article, you would like some further explanation, check out our downloadable EA True Up guide below:
You Don’t Need to Fill Out Every True-Up Form that Comes Your Way
If you have a reseller supporting you with your EA, then you may receive True-Up forms quite frequently — some of our clients report that they receive them on a monthly basis. You might feel compelled to fill each one of them out, either because your reseller encourages you to do so, and they know best, or because you’d rather not go up against Microsoft. However, unlike your annual True-Up, which will require a mandatory Update Statement (even if you haven’t added to your counts this year), these monthly True-Up forms are completely optional features that you don’t have to fill out.
You Can True-Down to your Original Count…Or Zero!
If this is not your first True-Up, you likely noticed that adding counts to your EA is easy – encouraged even – however, it can be very difficult to true-down or reduce your counts in any way. While it may be difficult, it is not impossible if you are following these steps:
Know Your Data
The first step of Truing-Down is to know what you are truing down to.
There are many ways to check your counts:
in your Active Directory;
in your SCCM or your SAM Tool (only useful if you’re trying to find your Qualified Device Count); or
in your HR Systems and Email Accounts (only useful for finding your Qualified User Counts).
You can also guess based on your number of employees, but while this is something most companies are forced to resort to, this is not something MetrixData 360 advises.
Create a Value Gap
Knowing your data will also allow you to create a Value Gap, and build your argument for truing down based upon cold, hard data. At MetrixData 360, we have built our tools for this task, which can significantly cut down your workload and your guessing.
Start Preparing for Your Microsoft EA True Up Early
You can True-Up pretty much up to the last second, but if you want to True Down, you will have to be prepared well ahead of time and adhere to the deadlines outlined in your agreement. Microsoft will only let you reduce your counts up until 30 days before your True-Up date, so you will have to be ready with your data and your arguments for Truing Down long before then.
Check Your Original Counts
When you are trying to reduce your counts in your EA, there are two things that really prove to be determining factors on how low you can go: if the product is an enterprise-wide purchase and if it is a subscription or a perpetual license.
If you have an enterprise-wide purchase, the only way Microsoft will allow you to reduce your counts is by scaling back online service subscriptions down to their original number that you started with. For example, if your original EA asked for 500 subscriptions and the following year you grew to 1,000, the lowest you can reduce your count to is 500. However, if your purchase is not enterprise-wide, it is possible to reduce the counts, so long as the minimum requirements are maintained.
Check Additional Products that are Available as Subscription Licenses
There are a few different products which are included in the EA, such as Enterprise Products, Enterprise Online Services, Additional Products, Additional Products Online Services. Additional Products that have subscriptions can be reduced to a count of zero! We’ve pulled such a move before at MetrixData 360, which resulted in our client saving $800,000!
Watch Out for Complicated Products
While Microsoft may have products that are easy to use, there are, of course, the challenging ones that are difficult to wrap your head around, let alone manage. Make sure to pay close attention to your deployment data around these products, ensuring that you have a strong understanding of your contract’s language and deployment data. Some of Microsoft’s more complicated products include:
At MetrixData 360, we put extensive effort into understanding both products and have a wide collection of material to read and tools to assist you in gaining a strong handle on these two products in your software environment.
Need Help Getting Ready for Your True-Up?
With your True-Up approaching, it’s important to have a few tricks up your sleeve. Closing such deals could mean the difference between optimizing your spending and spending copious amounts of money that you don’t need to.
The Microsoft reps may be nice, but there is only so much that they will be willing to help you save when their job is to make sure you do exactly the opposite. That is why you need someone who can support you and have your back during this engagement.
MetrixData 360 is here for you. We have many Fortune 500 customers who we have helped to minimize the impact of their EA on their software budget.
If you would like to learn more about getting ready for your Microsoft True-Up, you can download our free booklet, Preparing for a Microsoft True-Up.
Moving to Microsoft’s Azure can be an exciting experience, with so many services including File Storage and Machine Learning Analytics, SQL Databases, and Data Transfer, to name just a few. With so many infrastructure options in one place, moving to the cloud is becoming the obvious option for IT departments. Correctly sizing Azure is a vital first step to maintaining your IT budget. It’s like getting a new pair of shoes; you don’t want to waddle around in clown shoes, but you also will need something that doesn’t pinch your toes.
Unfortunately, Azure is a large and complex system, meaning correctly sizing for your organization’s needs is no simple task. At MetrixData 360, we have provided our expert advice to many companies hoping to gain insights into how best to size their Azure environment. As a result, we have helped them maximize value from their Azure purchase. In this article, we’ll go through everything you need to think about when purchasing the right Azure size for you.
Different Azure Sizes for Your Virtual Machines
Microsoft has 11 different Azure Series available, from the entry-level A-Series to the far more robust N-Series. Within each series, there are also multiple sizes of virtual machines (VMs) available, pushing the number of offered virtual machine options into the hundreds. Some of these options types include:
General purpose (ideal for testing and development)
Compute Optimized (great high CPU-to-memory ratio, only available in Fsv2)
Memory Optimized
Storage optimized (only available in Lsv2)
GPU (Graphics Processing Unit) Optimized
High Performance Compute
Each option comes with a variety of different sizes and different pricing metrics. In such a complex environment, how are you supposed to know how to properly size your organization’s needs when moving to Azure?
That is where we come into the picture. We understand the complex nature of Azure and their licensing structure. With our custom-built tool set, we can accurately determine your sizing and computing needs, ensuring your IT department avoids over-licensing fees, costly true-ups, or being under-equipped. By collecting the most accurate data we can from your environment, our specialists are able to make well informed decisions regarding your needs. Microsoft has provided a basic Azure Pricing calculator of their own, though it is a convoluted tool to use.
While finding the perfect Azure size is critical for your cost saving efforts, Microsoft’s unique way of calculating cost can make it difficult to size correctly, thanks to a little something Microsoft calls ‘provisioning’. Provisioning refers to a payment method where you pay based on a fixed capacity. This capacity could refer to memory capacity, bandwidth capacity or any other type of capacity. This capacity doesn’t reflect actual usage but instead is merely a fixed amount of space that you are paying for at any given moment, provisioning for less than you actually use could lead to your VMs struggling to cope with their tasks. This fixed capacity also doesn’t account for the changes in demand over a given year. However, it is more likely that you will pay for more than you use, which means you are wasting money on things you don’t use.
Strategic purchases of Microsoft’s Azure Reserved Instances (RI) can provide you with great discounts compared to the pay-as-you-go model – 36-47% cheaper for a one-year term; 60-72% cheaper if you sign up for a three year term; and potentially up to 80% cheaper if you combined it with the Hybrid Benefit. The fact that you can pay either a single upfront payment or monthly payments also offers a simpler solution when you are trying to budget your IT expenses. The process of purchasing your RI is as easy as selecting your Azure region, the virtual machine type, or how long you’d like your term to be (one year or three years) and you’re good to go. It is easy to exchange and cancel your reserved instances as you choose. However, it is important to note that a Reserved Instance is not an actual instance, it’s more like a coupon you can use when your instances are billed. Microsoft gets a guarantee in your business, and you get a discount. There are, however, still some drawbacks to purchasing reserved instances:
You’re locked in with the payment system once you’re signed up for it, and a lot of the costs, if not all of them, are upfront.
It’s not as easy to scale up or down compared to the Pay-as-You-Go system.
Thinking about your Move to Azure?
While significant changes to any department can cause a struggle, the same goes for the transition into Azure’s environment. Employees will have to be trained on managing the new platform and there needs to be management of both your on-prem and Azure assets. It may even be a smart idea to hire someone to look after your Azure platform.
At MetrixData 360, we provide our clients with the knowledge and the tools they need to manage their transition to the Azure’s platform successfully, which is why we have made a whole guidebook around the subject. If you would like to learn more about Azure, you can download our guide to Azure Licensing here.
How to Go Through Your Software Contracts Before a Negotiation
You’ve been handed a software contract in the wake of a negotiation with your software vendor, and it’s an inch thick with tiny font and a lot of words you’ll need a dictionary to look up. Now what? How can you tell if there are any saving opportunities that can be utilized in this agreement? Or (in the case of a software audit) how can you tell if you’re as far outside of compliance as the auditors say you are? The answer lies in understanding software contracts and how they function.
The preparation right before conducting software negotiations is a very important step that shouldn’t be taken lightly. Even if you have a strong relationship with your vendor, you need to ensure that you’re not placing the fate of your software environment into their hands. No matter how nice they are, their goal is to have you buy more licenses, regardless of what is best for you. Don’t rely on the software vendor to tell you what you need, only you can do that. So, how do you scan your contract to see if there is room for savings? To the untrained eye, it can seem like a daunting task consisting of hours on hours of mindlessly flipping through seemingly useless information. If you know what you are looking for and depending on how organized your software environment is, it may only take you an afternoon.
At MetrixData 360, we have ripped into contracts that we’ve never laid eyes on before and have been able to pull out hundreds of thousands of dollars in savings. So, in this blog post, we’ll show you some of our methods.
Details, Goals, and Additional Documents
When reviewing your contract, take the time to highlight any date or specific numbers (when does this contract begin? If you have a discount, how much is it for and how long will that discount last? etc.). Next, make sure that you have at least a basic understanding of what your contract is trying to accomplish. Is it a new count to your software environment? Are you trying to reduce the licenses? What will you have after the license is enacted as far as new software licenses? Are there any additional documents that you need to have with you to fully understand the document, such as a Product Use Terms document. Knowing what you’re looking at and the details surrounding it will be the foundation of your understanding.
Check Your Software Contract for Fees and Additional Expenses
Now that you have the basic outline of the contract, what it is trying to do, and what other documents you’ll need to consult to understand it, the next thing to do is find any mentions of fees, costs, or price increases over time. Find anything relating to the schedule of payment; is the contract asking for a lump-sum payment or installments? If so, what will your annual payments look like? Make sure you have a clear distinction between your purchase of the software and any payments needed to maintain the software. Make sure you consider all these additional costs to the software, as sometimes the software vendors can add on additional fees that make the overall product cost more than it’s worth.
However, it’s important to remember that your goal is to cut costs, not to shoot yourself in the foot and take away from value through undermining services. Maintenance is a good example of this, since most software companies charge 20% for maintenance which means over the course of five years, you can very easily end up paying for the software twice. Maintenance is the bread and butter for software companies, so they will be keen for you to simply passively renew your maintenance, but it is important you challenge this to weigh costs against benefits.
Look up the Definitions
Your goal is to reduce what you don’t need but before you can do that, you will need to examine the definitions of the contract since this entire process may involve a lot of slogging through the intricate and confusing language of the software contracts. Just remember though, you’re not looking at this from a legal perspective, so there are whole paragraphs in this contract that will be of little value to you. While it might be useful to know definitions like ‘Confidential Information’, and ‘Documentation’; and paragraphs like ‘Representatives/Services’, it doesn’t serve the purpose of this exercise, so it will just be extra homework for you. What you’re looking for is anything to do with:
How you count your licenses
How you pay
When you pay
What you pay
So, terms like ‘System’, ‘User,’ ‘Disaster Recovery,’ ‘Dev/test licensing,’ and ‘Invocation’; and paragraphs like ‘License Fee, Taxes and Expenses’, ‘Hardware’, ‘Master Software Support and Maintenance,’ and ‘Audit Rights/Compliance’ should be things that catch your eye. As you read, make note of any terms with similar definitions. For example, let’s say you notice ‘Web Users’ and ‘Occasional Users’ have strikingly similar definitions when it comes to the number of hours your users have to run the software and the privileges they need in order to qualify. If that is the case, investigate if it is cheaper to be considered a Web User or an Occasional User, and see if your company’s Users could be counted exclusively as the cheaper option.
The good news is that within the contract you will find whole pages filled with nothing but legal jargon that you can just briefly skim over to see if you can find any words like ‘license’, ‘user’, or ‘price’. While the document may be over 50 pages, skimming in this high manner should result in you spending maybe an hour reading.
Consider Next Steps
Alright, you’ve read through your contract and you’ve pulled out all the necessary information, so what do you do with it now? There are a few things that you can do with this data:
Compare Your Deployment Data:
Now that you have a clear understanding of what you have and what you’re signed up for, compare it with what you have in your software licensing environment. You may find usage that doesn’t match what you’ve paid for; it may be either too high or too low. You may also notice a consistent pattern in the usage, for example maybe there is a spike in usage for the last half of the year and so you have purchased licenses to account for that spike, but you are paying all year round. Data patterns like this would suggest that investigating a licensing type to accommodate for this fluctuating usage (for our example, a subscription license would be perfect) would be well worth the effort.
Check Your Ammendments:
Make sure you also consult any amendments your company has made to the contract in the relevant years. Just like with the definitions, you are looking for things revolving around payments and licenses, examples of relevant amendments would include increasing or decreasing licenses or maintenance. You will also want to look for any amendments that alter the definitions of the contract, especially if the definition is involved with users or licensing types.
Holes in Your Contracts:
With all this careful scrutinizing and confusing legal jargon, you may find that you have questions that your contract doesn‘t answer. Is there a term missing? Are there grey areas around what you can and can’t do with this license? Are there True-ups and have they been clearly defined? Seek clarification in any areas where the rules are not laid out clearly. If you are in the middle of a software audit, grey areas might prove useful to you. Depending on the exact wording of the section in question, you may be able to make the case for ‘it’s open to interpretation and this is how we have interpreted this’.
Start Prepping for Your Negotiation:
Now that your investigation has concluded, you can compile the information you need to conduct a successful contract negotiation. You understand your software contract, its amendments, its supporting documents, and you can point out any grey areas. You know what is deployed in your software licensing environment, you can see what you’re using and how it compares with what you’re paying for, which will allow you to spot cost-saving opportunities. Create a list of questions and talking points based on the facts. You can now focus your attention and budget on what you need instead of guiding yourself by guesswork and good intentions.
It’s not like these contracts are the stuff you curl up with on a rainy Sunday afternoon to read with a cup of tea, but if you want to cut costs in your software environment, if you want to be prepared for an audit or a software contract negotiation, you’ll need to understand what makes your software contracts tick. At MetrixData 360, we provide our clients with all the heavy lifting when it comes to understanding their software contracts, we usually act as our client’s secret weapon, telling you what you need to say to the software vendors and how you need to say it. If you’d like to learn more about how MetrixData 360 can help you get the best software contracts for your company, you can check out our Contract Negotiation Page.
SQL Servers are the most complicated, most expensive, and most critical element of an organization’s software infrastructure and it can be confusing to think about how it works, let alone how to license them. It is easy to get overwhelmed and to simply let your SQL Server sales rep handle it and tell you what you need to purchase and how many. Of course, just because they know their way around their CALs, cores, and sockets does not mean they know what is best for your business. Only you can answer that question.
At MetrixData 360, we strongly believe in educating our clients to improve their understanding of software asset management and software licenses in order to lead to strong, long-term SAM practices after our engagement has concluded. So, today we’re hoping to answer some of your more pressing questions around how to license your SQL servers.
What Are SQL Servers? A Brief Overview
Just to make sure we’re all on the same page, the main job of SQL Servers are to store data and retrieve it upon the request of other software applications, sort of like a company’s personal Google. SQL servers are made of many varied sizes and targeted towards different workloads and different types of workforces. Some exist in the Cloud with thousands of concurrent users and others exist in small to medium size on-prem businesses.
SQL servers are also designed to process different types of data, including primitive types like Char, Varchar, binary, and text, just to name a few. SQL Server licensing can be staggeringly overwhelming due to its sheer size and the number of other applications that interact with it. Before we get into how a SQL Server works, here are some terms that you may need to know:
Physical Server: the actual wires-and-bolts physical hardware system.
Physical Processor: the physical chip that is housed in a socket within the physical server that contains one or more cores.
Physical Core: Something like a mini server inside the server, a physical core is a smaller processing unit within the physical processor of the server, and are found in groups of two.
Retail (although you cannot buy an enterprise license through this means)
Volume licensing programs (including the MPSA, the EA, the EAS, the SCA, OPEN)
A third party through either Independent Software Vendor Royalty (ISVR) or Services Provider License Agreement (SPLA). Web edition purchases can only be made through a SPLA
Free downloads for some editions (sees SQL Server editions section of this document to learn more about free editions of SQL Servers). SQL Servers come with different licensing types and different editions, all of which we will break down. First, let’s look at licensing types, of which there are two: Core Based Licensing, and Server + CAL Licensing.
Core Based Licensing
This license allows for an unlimited number of users and devices to be connected to a server. If you want to install your SQL servers under a Core Based License, make sure you can follow these rules:
You need to license every physical operating system environment (OSE) that is running SQL server software. You will need a core license for every core in the processor.
You need at least four core licenses for each physical processor on the server (core licenses are sold in packs of two).
The SQL Server or any of its components needs to be licensed. What this means is that you can’t separate products of the SQL server over different machines. If the SQL Server Agent is running exclusively on one SQL server and the SQL server reporting services is being run exclusively on another machine, you’ll run into problems if you try to license that all under a single license. You would need two separate licenses for that scenario.
Anything that is installed on the physical machine you need to have a license for. You don’t necessarily need it to be running to require a license for it.
A math problem: Let’s say I have a single physical server. On the physical server, there are two processors, each with six physical cores with a total of twelve cores. In addition to the license for the operating system, I would need 6 core licenses (since they come in packs of two) in order to be properly licensed.
Benefits of Core-Based Licensing
Core-based licensing is typically the only option you have at your disposal when the SQL server in question is being accessed by devices and users outside your company’s network, since Server + CAL licenses would require you to purchase a license for every external person/device, which would not only be expensive, it would also be impossible to keep track of.
Ideal for larger companies, since it is easy to manage. Imagine having an international corporation with tens of thousands of employees, keeping track of who needed what CAL would be exhausting.
It also can prove cheaper for larger organizations, especially if your users far outnumber the cores you have.
Table of Contents
Table of Contents
SQL Servers are the most complicated, most expensive, and most critical element of an organization’s software infrastructure and it can be confusing to think about how it works, let alone how to license them. It is easy to get overwhelmed and to simply let your SQL Server sales rep handle it and tell you what you need to purchase and how many. Of course, just because they know their way around their CALs, cores, and sockets does not mean they know what is best for your business. Only you can answer that question.
At MetrixData 360, we strongly believe in educating our clients to improve their understanding of software asset management and software licenses in order to lead to strong, long-term SAM practices after our engagement has concluded. So, today we’re hoping to answer some of your more pressing questions around how to license your SQL servers.
What Are SQL Servers? A Brief Overview
Just to make sure we’re all on the same page, the main job of SQL Servers are to store data and retrieve it upon the request of other software applications, sort of like a company’s personal Google. SQL servers are made of many varied sizes and targeted towards different workloads and different types of workforces. Some exist in the Cloud with thousands of concurrent users and others exist in small to medium size on-prem businesses.
SQL servers are also designed to process different types of data, including primitive types like Char, Varchar, binary, and text, just to name a few. SQL Server licensing can be staggeringly overwhelming due to its sheer size and the number of other applications that interact with it. Before we get into how a SQL Server works, here are some terms that you may need to know:
Physical Server: the actual wires-and-bolts physical hardware system.
Physical Processor: the physical chip that is housed in a socket within the physical server that contains one or more cores.
Physical Core: Something like a mini server inside the server, a physical core is a smaller processing unit within the physical processor of the server, and are found in groups of two.
Retail (although you cannot buy an enterprise license through this means)
Volume licensing programs (including the MPSA, the EA, the EAS, the SCA, OPEN)
A third party through either Independent Software Vendor Royalty (ISVR) or Services Provider License Agreement (SPLA). Web edition purchases can only be made through a SPLA
Free downloads for some editions (sees SQL Server editions section of this document to learn more about free editions of SQL Servers). SQL Servers come with different licensing types and different editions, all of which we will break down. First, let’s look at licensing types, of which there are two: Core Based Licensing, and Server + CAL Licensing.
Core Based Licensing
This license allows for an unlimited number of users and devices to be connected to a server. If you want to install your SQL servers under a Core Based License, make sure you can follow these rules:
You need to license every physical operating system environment (OSE) that is running SQL server software. You will need a core license for every core in the processor.
You need at least four core licenses for each physical processor on the server (core licenses are sold in packs of two).
The SQL Server or any of its components needs to be licensed. What this means is that you can’t separate products of the SQL server over different machines. If the SQL Server Agent is running exclusively on one SQL server and the SQL server reporting services is being run exclusively on another machine, you’ll run into problems if you try to license that all under a single license. You would need two separate licenses for that scenario.
Anything that is installed on the physical machine you need to have a license for. You don’t necessarily need it to be running to require a license for it.
A math problem: Let’s say I have a single physical server. On the physical server, there are two processors, each with six physical cores with a total of twelve cores. In addition to the license for the operating system, I would need 6 core licenses (since they come in packs of two) in order to be properly licensed.
Benefits of Core-Based Licensing
Core-based licensing is typically the only option you have at your disposal when the SQL server in question is being accessed by devices and users outside your company’s network, since Server + CAL licenses would require you to purchase a license for every external person/device, which would not only be expensive, it would also be impossible to keep track of.
Ideal for larger companies, since it is easy to manage. Imagine having an international corporation with tens of thousands of employees, keeping track of who needed what CAL would be exhausting.
It also can prove cheaper for larger organizations, especially if your users far outnumber the cores you have.
Server + CAL Based Licensing
There are instances where a Server + CAL license arrangement may suit your business’s needs better, although it will involve a lot more mixing and matching. You have to fulfill a certain number of guidelines in order to use a Server + CAL license successfully:
Just like with the core-based licenses, any physical operating system running SQL server software or any of SQL server’s components will need a SQL server license assigned to the physical server hosting OSE.
In addition to the license for the OSE, you will also need to purchase a license for each device and/or user that has access. Think of the OSE license like purchasing the lock on your door, the CALs are the keys, you need both to gain access.
Client Access Licenses (CAL)
Client Access Licenses (CAL), is a license that grants access to specific Microsoft server software, usually in conjunction with other Microsoft server software licenses. Basically, while the server license allows for the installation of the software on an operating system, the CAL allows for people or devices to access the services that the operating system is hosting. There are two different types of CALs, depending primarily on what your company’s needs the server software you intend to use your CAL for.
User CAL: Allows for a single unique physical user to access the Microsoft software from many different devices. This includes work devices, personal devices, Internet kiosk or a personal digital assistant without the need to purchase a CAL for every device. However, you are licensed per physical person, not log-in usernames, so all the John Smiths in your company can breathe easy.
Device CAL: Allows a large number of users to access the server software through a single device.
Be very careful with the version number your CAL has when you purchase it (IE. Windows Server 2010 CAL). The CAL must be of the same version or be a more recent version than the version of the Server software you are pairing it with. For instance, a Windows Server 2010 CAL can be paired with a Windows 2010 or 2008 server but not a 2012 Server.
Each server product will require the associated CAL. For instance, if you have a Windows Server and an Exchange Server, which both access the Active Directory, then you will need a Window Servers CAL and an Exchange CAL. A CAL can also give you access to multiple servers of the same kind throughout your domain.
As you can imagine the pairing of your CALs to your servers can get extremely confusing and complex, especially if you try to mix and match. So, it is always a good idea to consult your Microsoft Rep or your third-party rep, give them a clear picture about what your software environment looks like and then they can tell you about the CALs you need.
Optimize Your SQL Server Software Contract Before and After the Purchase and Save Money
How IT Departments Can Navigate the Complexities of Windows and SQL Server Licensing with Microsoft True Up Support
How Do You License SQL Server?
Optimize Your SQL Server Software Contract Before and After the Purchase and Save Money
How IT Departments Can Navigate the Complexities of Windows and SQL Server Licensing with Microsoft True Up Support
How Do You License SQL Server?
Types of SQL Server Edition
Now that we have our SQL server licensing models laid out, we can move onto the next level of complication: Editions. Microsoft first deploy SQL Server Express to see if it is sufficient for their specific applications and will only move to the fee-based editions when they can confirm that Express will not meet their requirements.
Developer: This edition allows you to build, test, and demonstrate applications in a non-production environment. It is important that the ‘non-production’ element is upheld in this edition, since using the developer edition on anything that is full production can result in heavy fines. A piece of software will be considered in production if individuals, either inside or outside of the organization, use the software for any reason beyond development, including evaluation acceptance testing such as a review of the application before it is put into general use.
A SQL server will also be considered in production if it is connected to another database that is in production or runs as a backup or to provide disaster-recovery to a SQL server in production. As you can probably imagine, mixing production and non-production environments is a recipe for disaster, as this can cause hyper complexity and compliance issues, especially if access controls are not established that prohibits use outside of development and testing. There are a few ways to counteract this problem:
Use naming conventions for SQL Server instances to explicitly state if a Server is in development or in testing.
Install the SQL server on a separate network segment or cloud environment to lower the chance of unauthorized interaction.
Require that installs be developer-specific editions.
The main challenge with these editions is proving which edition you have. For example, if you are in a software audit, unless provided with evidence that proves otherwise, the software auditors will assume that you only have Enterprise editions, which are the most expensive. Proving which editions, you have could mean the difference between owing hundreds of thousands of dollars and owing nothing.
Licensing for Development Environments
While Development and Express environments can be great in saving you money, in testing and demonstrating your software before deployment, it is important that these scenarios are licensed properly and that you understand their limitations. There are two types of SQL Server Development licenses:
Developer-Specific Licenses: Used primarily for debugging, designing, development, testing and demonstrating purposes. This license is for non-production use only and is often purchased when programmers, professional testers, technical writers, database professionals, or IT administrators are involved. Developer specific licenses are assigned on a per-user basis, in which Users can install and access an unlimited number of SQL Server instances and share those instances only with other users who have been assigned the same type of developer-specific user licenses.
That means, for this licensing model, if anyone wishing to access a development environment requires a developer-specific license, even for tasks as hands-off as administrative purposes. The only exception to this is user acceptance testing. Installations can be set up and taken down at any time and can be placed on desktops, dedicated servers, shared servers, and cloud environments. Some potentially less expensive alternatives to this license include the following:
Purchasing new production licenses
Cloud-based services like Windows Azure, which are usually based on a monthly subscription model (if you have an MSDN subscription, it includes Windows Azure credits, discounted rates and the ability to use MSDN software at no additional charge)
Free editions like SQL Server Express and the SQL Server Compact (a free embedded edition of SQL specifically for developers)
</div class=”listbox”>Evaluation Licenses: Used to assess the software for potential business use. Again, only used for non-production environments but it is not often used in development and test environments. Usually comes with an expiration date (60-180 days to evaluate the use of the software) when obtained through volume license contracts.
Licensing Virtualized Environments
It is possible and necessary to license virtualized environments, and you have the ability to cover your VMs under your Enterprise + Software Assurance addition licensing model if you have one. This will cover all the VMs that your software environment will ever see, which comes in handy since VMs are so easily and quickly cloned and installed.
However, it is terribly important to consult with your Microsoft Rep to ask if virtualized environments can be properly covered by your software assurance as you don’t want to run the risk of facing any compliance issues with Microsoft. You will need a license for every virtual core that you have.
Licensing your Virtual Environment all depends on the licensing model you choose, with the per core model proving much more cost-effective for many clients. If you aim to license the Virtual Cores on Virtual Operating System Environments (OSE), then you will need a minimum of four licenses per processor if you have more than four cores on each of your virtual processors, then you’ll need to calculate what you’ll need based on the number of cores. If your OSE is mapped to different pieces of hardware, you’ll need additional licenses for anything the OSE is touching.
Power BI and SQL Server
Power BI is one of the most popular services for large businesses, and it can quickly become the most complicated due to its robust environment and its complicated, although critical, relationship with SQL servers. You can obtain Power BI either through purchasing one of the Power BI plans or through having SQL Server Enterprise Edition + Software Assurance. SQL Server Enterprise Edition + Software Assurance will give you access to the Power BI Server, this will allow for on-prem sharing of Power BI Content through the Power BI report server.
Although you will still need to have a Power BI account for content creation. If your organization already has an Enterprise SQL Server edition and intends to use Power BI strictly for On-prem sharing of content, simply getting Software Assurance will be the more cost-effective option as opposed to buying a Power BI plan.
It is also important to note that Power BI Desktop has access to SQL Server, but not Power BI Service. Although Power BI Service can provide a connection to Azure SQL Database and SQL Data Warehouse, it can’t do the same with SQL Server. With the Desktop, however, you can retrieve SQL Server data from tables and run queries that can retrieve a subset of the data from multiple tables.
Licensing for Disaster Recovery and High Availability
Making sure that your SQL server can properly store information and making sure you can access it at any time is a critical element for SQL servers’ customers and one of the most popular features in their software assurance benefits. Which is why Microsoft, as of November 1st, 2019, has three enhanced benefits to offer to software assurance customers, which can be applied to any SQL Server that is still supported by Microsoft, including failover servers for high availability, disaster recovery, and disaster recovery in Azure. What this means is that you can run passive SQL Server instances on separate operating system environments (OSE) or servers for high-availability on-prem or in Azure to cover any sort of failover event.
If you have a secondary server that is only used as failover support, then you do not need to license that server separately from the SQL server it is supporting, as long as the server remains truly passive and the primary SQL Server is covered by your Software Assurance.
If the passive server is providing data, such as reports, to clients or performing any other ‘work’ including additional backups, then it will be considered active and will require its own license. It is most important that you have a means of proving when your servers are passive, since during a software audit, the software auditors will assume that all your servers are active if given the chance to assume so.
If you are licensed using the Server + CAL model, then any user or device that is indirectly accessing your SQL server data through another hardware device or software application will require their own SQL Server CALs.
However, it will not be easy since a SQL Server upgrade will take months and you should plan accordingly. When you are considering updating from one Server to the next, the first thing you need to do is make a to-do list containing everything you have to do, such as:
Making sure you have all the Window Updates
Do you have .NET Framework installed correctly?
Do you have KB2919355 installed (if you are using Server 2012 with SQL 2014 installation)
Insure that you have enough free space to allow for the upgrade (at least 100GB). After all such preparations are ready you can begin the whole upgrading process
If you have Software Assurance, then you are covered to upgrade your SQL Server edition, if not then you will have to purchase more licenses. Check to make sure what sort of changes have occurred since you last updated SQL Server, since depending on how old your SQL Server is, you may find yourself confronted with new features, new definitions, and new licensing metrics.
Do some research into the new SQL Server model you are planning on upgrading to and familiarize yourself on any differences the new edition has compared to your old model. If you are purchasing brand new licenses, consider which new SQL Server Edition will best suit your company’s needs and budget. Lastly, decide whether, this time around with your new SQL Server, if Software Assurance is something that interests your company.
Want to Learn More?
SQL Server licensing should not be a mystery, it’s important that you have a strong understanding of your software environment, including the backbone of the whole infrastructure. SQL Servers are so thoroughly implemented throughout the software environments of organizations that a simple mistake could easily be scaled up to mean millions of dollars in software auditing fines.
At MetrixData 360, we understand the importance of making sure that your SQL Server licensing is understood and maintained. Our expertise in software licenses has led to clients saving 20%-30% of spending on your software environment. If you’d like to find out how you can put money back into your IT department, you can contact us using the information below.
Book an Appointment with a SQL Server Licensing Expert Today
SQL Servers are the most complicated, most expensive, and most critical element of an organization’s software infrastructure and it can be confusing to think about how it works, let alone how to license them. It is easy to get overwhelmed and to simply let your SQL Server sales rep handle it and tell you what you need to purchase and how many. Of course, just because they know their way around their CALs, cores, and sockets does not mean they know what is best for your business. Only you can answer that question.
At MetrixData 360, we strongly believe in educating our clients to improve their understanding of software asset management and software licenses in order to lead to strong, long-term SAM practices after our engagement has concluded. So, today we’re hoping to answer some of your more pressing questions around how to license your SQL servers.
Just to make sure we’re all on the same page, the main job of SQL Servers are to store data and retrieve it upon the request of other software applications, sort of like a company’s personal Google. SQL servers are made of many varied sizes and targeted towards different workloads and different types of workforces. Some exist in the Cloud with thousands of concurrent users and others exist in small to medium size on-prem businesses.
SQL servers are also designed to process different types of data, including primitive types like Char, Varchar, binary, and text, just to name a few. SQL Server licensing can be staggeringly overwhelming due to its sheer size and the number of other applications that interact with it. Before we get into how a SQL Server works, here are some terms that you may need to know:
Physical Server: the actual wires-and-bolts physical hardware system.
Physical Processor: the physical chip that is housed in a socket within the physical server that contains one or more cores.
Physical Core: Something like a mini server inside the server, a physical core is a smaller processing unit within the physical processor of the server, and are found in groups of two.
Retail (although you cannot buy an enterprise license through this means)
Volume licensing programs (including the MPSA, the EA, the EAS, the SCA, OPEN)
A third party through either Independent Software Vendor Royalty (ISVR) or Services Provider License Agreement (SPLA). Web edition purchases can only be made through a SPLA
Free downloads for some editions (sees SQL Server editions section of this document to learn more about free editions of SQL Servers). SQL Servers come with different licensing types and different editions, all of which we will break down. First, let’s look at licensing types, of which there are two: Core Based Licensing, and Server + CAL Licensing.
Core Based Licensing
This license allows for an unlimited number of users and devices to be connected to a server. If you want to install your SQL servers under a Core Based License, make sure you can follow these rules:
You need to license every physical operating system environment (OSE) that is running SQL server software. You will need a core license for every core in the processor.
You need at least four core licenses for each physical processor on the server (core licenses are sold in packs of two).
The SQL Server or any of its components needs to be licensed. What this means is that you can’t separate products of the SQL server over different machines. If the SQL Server Agent is running exclusively on one SQL server and the SQL server reporting services is being run exclusively on another machine, you’ll run into problems if you try to license that all under a single license. You would need two separate licenses for that scenario.
Anything that is installed on the physical machine you need to have a license for. You don’t necessarily need it to be running to require a license for it.
A math problem: Let’s say I have a single physical server. On the physical server, there are two processors, each with six physical cores with a total of twelve cores. In addition to the license for the operating system, I would need 6 core licenses (since they come in packs of two) in order to be properly licensed.
Benefits of Core-Based Licensing
Core-based licensing is typically the only option you have at your disposal when the SQL server in question is being accessed by devices and users outside your company’s network, since Server + CAL licenses would require you to purchase a license for every external person/device, which would not only be expensive, it would also be impossible to keep track of.
Ideal for larger companies, since it is easy to manage. Imagine having an international corporation with tens of thousands of employees, keeping track of who needed what CAL would be exhausting.
It also can prove cheaper for larger organizations, especially if your users far outnumber the cores you have.
Server + CAL Based Licensing
There are instances where a Server + CAL license arrangement may suit your business’s needs better, although it will involve a lot more mixing and matching. You have to fulfill a certain number of guidelines in order to use a Server + CAL license successfully:
Just like with the core-based licenses, any physical operating system running SQL server software or any of SQL server’s components will need a SQL server license assigned to the physical server hosting OSE.
In addition to the license for the OSE, you will also need to purchase a license for each device and/or user that has access. Think of the OSE license like purchasing the lock on your door, the CALs are the keys, you need both to gain access.
Client Access Licenses (CAL)
Client Access Licenses (CAL), is a license that grants access to specific Microsoft server software, usually in conjunction with other Microsoft server software licenses. Basically, while the server license allows for the installation of the software on an operating system, the CAL allows for people or devices to access the services that the operating system is hosting. There are two different types of CALs, depending primarily on what your company’s needs the server software you intend to use your CAL for.
User CAL: Allows for a single unique physical user to access the Microsoft software from many different devices. This includes work devices, personal devices, Internet kiosk or a personal digital assistant without the need to purchase a CAL for every device. However, you are licensed per physical person, not log-in usernames, so all the John Smiths in your company can breathe easy.
Device CAL: Allows a large number of users to access the server software through a single device.
Be very careful with the version number your CAL has when you purchase it (IE. Windows Server 2010 CAL). The CAL must be of the same version or be a more recent version than the version of the Server software you are pairing it with. For instance, a Windows Server 2010 CAL can be paired with a Windows 2010 or 2008 server but not a 2012 Server.
Each server product will require the associated CAL. For instance, if you have a Windows Server and an Exchange Server, which both access the Active Directory, then you will need a Window Servers CAL and an Exchange CAL. A CAL can also give you access to multiple servers of the same kind throughout your domain.
As you can imagine the pairing of your CALs to your servers can get extremely confusing and complex, especially if you try to mix and match. So, it is always a good idea to consult your Microsoft Rep or your third-party rep, give them a clear picture about what your software environment looks like and then they can tell you about the CALs you need.
Now that we have our SQL server licensing models laid out, we can move onto the next level of complication: Editions. Microsoft first deploy SQL Server Express to see if it is sufficient for their specific applications and will only move to the fee-based editions when they can confirm that Express will not meet their requirements.
Developer: This edition allows you to build, test, and demonstrate applications in a non-production environment. It is important that the ‘non-production’ element is upheld in this edition, since using the developer edition on anything that is full production can result in heavy fines. A piece of software will be considered in production if individuals, either inside or outside of the organization, use the software for any reason beyond development, including evaluation acceptance testing such as a review of the application before it is put into general use.
A SQL server will also be considered in production if it is connected to another database that is in production or runs as a backup or to provide disaster-recovery to a SQL server in production. As you can probably imagine, mixing production and non-production environments is a recipe for disaster, as this can cause hyper complexity and compliance issues, especially if access controls are not established that prohibits use outside of development and testing. There are a few ways to counteract this problem:
Use naming conventions for SQL Server instances to explicitly state if a Server is in development or in testing.
Install the SQL server on a separate network segment or cloud environment to lower the chance of unauthorized interaction.
Require that installs be developer-specific editions.
The main challenge with these editions is proving which edition you have. For example, if you are in a software audit, unless provided with evidence that proves otherwise, the software auditors will assume that you only have Enterprise editions, which are the most expensive. Proving which editions, you have could mean the difference between owing hundreds of thousands of dollars and owing nothing.
Licensing for Development Environments
While Development and Express environments can be great in saving you money, in testing and demonstrating your software before deployment, it is important that these scenarios are licensed properly and that you understand their limitations. There are two types of SQL Server Development licenses:
Developer-Specific Licenses: Used primarily for debugging, designing, development, testing and demonstrating purposes. This license is for non-production use only and is often purchased when programmers, professional testers, technical writers, database professionals, or IT administrators are involved. Developer specific licenses are assigned on a per-user basis, in which Users can install and access an unlimited number of SQL Server instances and share those instances only with other users who have been assigned the same type of developer-specific user licenses.
That means, for this licensing model, if anyone wishing to access a development environment requires a developer-specific license, even for tasks as hands-off as administrative purposes. The only exception to this is user acceptance testing. Installations can be set up and taken down at any time and can be placed on desktops, dedicated servers, shared servers, and cloud environments. Some potentially less expensive alternatives to this license include the following:
Purchasing new production licenses
Cloud-based services like Windows Azure, which are usually based on a monthly subscription model (if you have an MSDN subscription, it includes Windows Azure credits, discounted rates and the ability to use MSDN software at no additional charge)
Free editions like SQL Server Express and the SQL Server Compact (a free embedded edition of SQL specifically for developers)
</div class=”listbox”>Evaluation Licenses: Used to assess the software for potential business use. Again, only used for non-production environments but it is not often used in development and test environments. Usually comes with an expiration date (60-180 days to evaluate the use of the software) when obtained through volume license contracts.
Licensing Virtualized Environments
It is possible and necessary to license virtualized environments, and you have the ability to cover your VMs under your Enterprise + Software Assurance addition licensing model if you have one. This will cover all the VMs that your software environment will ever see, which comes in handy since VMs are so easily and quickly cloned and installed.
However, it is terribly important to consult with your Microsoft Rep to ask if virtualized environments can be properly covered by your software assurance as you don’t want to run the risk of facing any compliance issues with Microsoft. You will need a license for every virtual core that you have.
Licensing your Virtual Environment all depends on the licensing model you choose, with the per core model proving much more cost-effective for many clients. If you aim to license the Virtual Cores on Virtual Operating System Environments (OSE), then you will need a minimum of four licenses per processor if you have more than four cores on each of your virtual processors, then you’ll need to calculate what you’ll need based on the number of cores. If your OSE is mapped to different pieces of hardware, you’ll need additional licenses for anything the OSE is touching.
Power BI and SQL Server
Power BI is one of the most popular services for large businesses, and it can quickly become the most complicated due to its robust environment and its complicated, although critical, relationship with SQL servers. You can obtain Power BI either through purchasing one of the Power BI plans or through having SQL Server Enterprise Edition + Software Assurance. SQL Server Enterprise Edition + Software Assurance will give you access to the Power BI Server, this will allow for on-prem sharing of Power BI Content through the Power BI report server.
Although you will still need to have a Power BI account for content creation. If your organization already has an Enterprise SQL Server edition and intends to use Power BI strictly for On-prem sharing of content, simply getting Software Assurance will be the more cost-effective option as opposed to buying a Power BI plan.
It is also important to note that Power BI Desktop has access to SQL Server, but not Power BI Service. Although Power BI Service can provide a connection to Azure SQL Database and SQL Data Warehouse, it can’t do the same with SQL Server. With the Desktop, however, you can retrieve SQL Server data from tables and run queries that can retrieve a subset of the data from multiple tables.
Licensing for Disaster Recovery and High Availability
Making sure that your SQL server can properly store information and making sure you can access it at any time is a critical element for SQL servers’ customers and one of the most popular features in their software assurance benefits. Which is why Microsoft, as of November 1st, 2019, has three enhanced benefits to offer to software assurance customers, which can be applied to any SQL Server that is still supported by Microsoft, including failover servers for high availability, disaster recovery, and disaster recovery in Azure. What this means is that you can run passive SQL Server instances on separate operating system environments (OSE) or servers for high-availability on-prem or in Azure to cover any sort of failover event.
If you have a secondary server that is only used as failover support, then you do not need to license that server separately from the SQL server it is supporting, as long as the server remains truly passive and the primary SQL Server is covered by your Software Assurance.
If the passive server is providing data, such as reports, to clients or performing any other ‘work’ including additional backups, then it will be considered active and will require its own license. It is most important that you have a means of proving when your servers are passive, since during a software audit, the software auditors will assume that all your servers are active if given the chance to assume so.
If you are licensed using the Server + CAL model, then any user or device that is indirectly accessing your SQL server data through another hardware device or software application will require their own SQL Server CALs.
However, it will not be easy since a SQL Server upgrade will take months and you should plan accordingly. When you are considering updating from one Server to the next, the first thing you need to do is make a to-do list containing everything you have to do, such as:
Making sure you have all the Window Updates
Do you have .NET Framework installed correctly?
Do you have KB2919355 installed (if you are using Server 2012 with SQL 2014 installation)
Insure that you have enough free space to allow for the upgrade (at least 100GB). After all such preparations are ready you can begin the whole upgrading process
If you have Software Assurance, then you are covered to upgrade your SQL Server edition, if not then you will have to purchase more licenses. Check to make sure what sort of changes have occurred since you last updated SQL Server, since depending on how old your SQL Server is, you may find yourself confronted with new features, new definitions, and new licensing metrics.
Do some research into the new SQL Server model you are planning on upgrading to and familiarize yourself on any differences the new edition has compared to your old model. If you are purchasing brand new licenses, consider which new SQL Server Edition will best suit your company’s needs and budget. Lastly, decide whether, this time around with your new SQL Server, if Software Assurance is something that interests your company.
Want to Learn More?
SQL Server licensing should not be a mystery, it’s important that you have a strong understanding of your software environment, including the backbone of the whole infrastructure. SQL Servers are so thoroughly implemented throughout the software environments of organizations that a simple mistake could easily be scaled up to mean millions of dollars in software auditing fines.
At MetrixData 360, we understand the importance of making sure that your SQL Server licensing is understood and maintained. Our expertise in software licenses has led to clients saving 20%-30% of spending on your software environment. If you’d like to find out how you can put money back into your IT department, you can contact us using the information below.
Book an Appointment with a SQL Server Licensing Expert Today
Oracle released their 2020 Q4 report and it may mean that there are Oracle Audits coming. Software audits can be a living nightmare if you find yourself unprepared, leaving the possibility for things to spiral out of control until the next thing you know you’re facing outlandishly large compliance gaps no idea how to prove them wrong. Oracle audits are no exception to this and many of their customers find themselves at a loss when confronted with one. While we have covered how to handle a general audit, there are a few things about Oracle audits that make them unique, which is what we’ll go over today. At, MetrixData 360, we have gone up against the biggest software companies in the software industry today and have empowered our clients with the knowledge they need to walk away from such audits with minimal damage to their IT budget.
Oracle’s Results Released for Q4
On June 16, 2020, Oracle released its Q4 report for their fiscal year and the results show case exactly how hard Oracle has been hit by the COVID-19 pandemic . The report showed four areas of Oracle’s business that were suffering. First, the Cloud services and licenses support, which saw only a 1% increase in revenue over the past year, which is a considerably weak increase since, historically, Oracle has seen a 4% increase in that same category. Their other main streams of revenue have declined with hardware seeing a 9% dip, services seeing an 11% dip, and cloud licenses and on-prem licenses seeing a staggering nosedive of 22%.
Those are 2008-recession levels of bad and it doesn’t help that Oracle’s traditionally highest grossing month is May, where they haul in almost 40% of their year’s total revenue. May was also the same month that saw the worst of the pandemic lock down, where the last thing on anyone’s mind was buying more software. Part of this may be just a COVID-19 blip, with Oracle having only to make it to the other side of this truly terrible year before they can see their usual numbers again. However, these numbers have many of Oracle’s customers sweating at what this might mean for Oracle audits.
From the Beginning: What Attracts an Oracle Audit, and How to Respond to Receiving One
With this news, there is a strong chance that there will be an increase in audits, and it’s suspected that these audits will be aimed towards small to medium size companies with lower investments in Oracle, while companies who have large investments in Oracle are not expected to feel any significant changes. But while there might not be any significant increase for these large companies when it comes to Oracle audits, there will certainly not be a decrease in them any time soon, so it’s important that you are prepared all the same. While some software companies have routine audits or send out audits at random, Oracle tends to be a bit more precise when it comes to who they audit.
Generally, you can expect an Oracle audit once every 3-4 years, unless your last audit was restricted to only a single Oracle product or area of your software environment, then you can expect to be audited more frequently. Your Oracle audit may have been brought on by any of the following factors occurring in the past 24 months at your organization:
You are still in possession of old or outdated Oracle software whose metrics are no longer used by Oracle
You’ve conducted a hardware environment refresh
Your organization has seen an organic growth of 10% or greater
You have trimmed back on Oracle products in any way such as cancelling or reducing support from Oracle
You have an Unlimited Licensing Agreement (ULA), since it is suspected that Oracle will be focusing its auditing efforts on either getting you to renew your ULA or switch to a perpetual ULA
When you receive either an Oracle License Review or an Oracle License Audit, don’t let the different names distract or tempt you to take the Review as less serious than the Audit. They are essentially the same in both process and stakes. The only real difference between the two is that ‘review’ is a friendly, less threatening term when compared to an audit.
LMS and Oracle Tools: Dealing with Both
Oracle Licensing Management Service (LMS) is the internal team from Oracle that you will likely be dealing with throughout your audit. Although it is possible for Oracle to outsource the project to their partners, and other departments of Oracle will perform audit-like services such as reviews, their internal audit team is the only department authorized to perform License Audits on behalf of Oracle.
When you interact with Oracle’s LMS, one consistent element that you’ll run into is that they will want you to run their own, Oracle approved, SAM tools to collect the data from your software environment. Your first goal in this audit is to make sure that your tools are used instead, an argument which we cover in length in our Software Audit Defense Procedure . While you are required to comply with the audit, nowhere in your contract does it require you to install their SAM tools. So long as you can prove that your own SAM tools can accurately retrieve the data that Oracle is asking for, then there is nothing wrong with using your own tools.
Who Foots the Bill? The Old Oracle vs. the New Post COVID Oracle
In the past, Oracle’s audits and their sales reps had the same goal: sales for the sake of sales. Sales reps got commission annually for every transaction, these numbers were usually 1% of the contract value, and if it was cloud services they were selling, that number rose to a tantalizing 5-10%. So, sales reps preferred cloud services and at the end of an audit, it was often the case that cloud services would come up when it was time for settlement. Oracle has essentially offered its audited customers get-out-of-jail free cards in exchange for the purchase of cloud services at a much smaller cost than your compliance gap, even if you didn’t need the cloud solution you are purchasing. All the sales rep really cared about was selling the services, it didn’t matter to them if you never used it again afterwards, since they got to walk away with that 5%-10% commission jingling in their pockets.
Now, however, Oracle has made a few changes to their sales rep models. They have significantly cut back on their staff numbers, and have put the vast majority of the remaining sales reps on the task of exclusively selling cloud services, and will only see that same level of compensation if their customers use the cloud services that were sold to them. This means that you will not see be seeing any cloud service deals at the end of your audit, you’ll just be expected to pay the compliance gap, which will be painfully more expensive than the previous alternative.
Now, however, Oracle has made a few changes to their sales rep models. They have significantly cut back on their staff numbers, and have put the vast majority of the remaining sales reps on the task of exclusively selling cloud services, and will only see that same level of compensation if their customers use the cloud services that were sold to them. This means that you will not see be seeing any cloud service deals at the end of your audit, you’ll just be expected to pay the compliance gap, which will be painfully more expensive than the previous alternative.
In addition to these costs, if you are found to be out of compliance by a significant degree, then you will be forced to cover the expenses for the entire software audit, including any expenses that Oracle racks up.
How Should I prepare?
Once you have received a software audit notice from Oracle, you will have about 45 days to respond. During that time, you need to get the following ready:
A Non-Disclosure Agreement: This will ensure that any information that you give to the auditors must remain between you and them unless they ask for your consent to send it to the rest of Oracle’s higher ups. This will allow you to remain in control of how Oracle perceives your organization and your compliance, both of which will become important when you enter into the negotiation and settlement phase of the audit.
A Single Point of Contact (SPC): You will need to make sure that you have a team to act as a single point of contact (ideally with legal, technical, and Oracle specialization) in place who will exclusively deal with communications with Oracle’s audit team. The auditors will only talk to the SPC and anything that is passed from your organization to the auditors will pass under the SPC’s eyes first. Anyone who is planning to be interviewed by Oracle will discuss with the SPC what they are planning on saying and how they should answer Oracle’s questions. This isn’t done for the sake of hiding anything from Oracle, but this will help to keep track of where you stand with Oracle and ensures your negotiation strategies remain uncompromising.
A Scope for the Audit: This is done so that, in the case that you are not so far out of compliance as Oracle originally thought, they do not keep looking through your software environment trying to find the profit they anticipated, also referred to as ‘scope creep’.
This needs to be laid out during the kick-off meeting and it’s important that you do not let the data collection phase begin without those three things in place.
Want to become an Expert a Handling Software Audits?
No one will claim software audits are easy or simple, and if they claim it’s anything other than a thinly veiled attempt to squeeze more money out of your company, then they’re kidding themselves. Oracle audits can be especially tricky, considering the sheer size of Oracle’s company and the vast amount of resources you’ll be going up against. It can feel like you’re outnumbered and out of your depth as you’re surrounded by sharks who do this for a living. Which is why you don’t have to go through this experience alone. At MetrixData 360, we have created a whole reservoir of resources in order to better equip you to face any software audit that comes your way. If you would like to download our free e-book on a step-by-step process on handling software audits, you can click the link below.
2020 has so far been quite the cruel mistress and, although software companies have been relatively spared when compared to other industries, that hasn’t stopped Oracle from being dealt a heavy blow, as detailed in their Q4 report for 2020. Traditionally, May has been Oracle’s most lucrative month, but this year it was a month of tight lockdowns and a sweeping pandemic, so things did not go well. Now, Oracle customers are wondering if now is the time to start negotiating an Oracle contract renewal. But Oracle is known for being one of the toughest software vendors to hash out a contract with, their arrangements may be unwavering regarding their software, databases, and middleware, but if you want that wonderful Oracle software, then you’re going to have to find some happy middle ground. At MetrixData 360, we have dealt with Oracle on many different occasions and we have seen what it takes to get the deals that our clients are looking for, so when you’re getting ready for your contract negotiation with Oracle, here are a few things that you can expect.
Expect Oracle to Take their Sweet Time
This may be a byproduct of Oracle’s sheer size, as each new request triggers a bureaucratic process, but that doesn’t stop this drawn out process from being frustrating at the best of times. If you are used to dealing with smaller software companies, it may seem like Oracle is dragging out their process unnecessarily. This will be especially true since Oracle has recently reshuffled its sales team structure. The old Oracle sale structure had their whole sales force focused on selling on-prem license and cloud services, with a 1% cut of the contract value of each transaction for on-prem licenses and 5%-10% on cloud service contracts.
However, their focus has now shifted to only 25% of the sales force working exclusively on on-prem licensing with no compensation for selling cloud services, and the rest being exclusively put on the task of selling cloud services. This means if you want to cut a deal with a sales rep for on-prem licenses, they might be extremely busy and overworked. Despite the pressure they might be under, make sure that you take the time necessary to understand your current and projected usage so that you can secure a deal that serves your best interest and ensures you don’t get swept up in the whirlwind of licensing jargon.
Cloud Services are No Longer a Get Out of Jail Free Card
In the old model of Oracle, cloud services would often come up at the end of audits in exchange for a lower overall cost when compared to the compliance gap. Even if you had no intention of using it, the sales reps were happy since it meant they got their 5%-10% cut. However, Oracle’s new sales model now has sales reps only receiving compensation for the transaction if the customer uses it. On the one hand, this means that you no longer have to spend money on a cloud solution that you were never planning on using in the first place, but offering to simply buy a cloud solution no longer makes the sales rep’s eyes sparkle with interest – not unless you’re going to back up your claim with the actual intent to use the products.
Exiting Your ULA will be Difficult at Best
If your contract negotiation involves redefining the terms of Oracle’s Unlimited License Agreement (ULA), then you might be facing an uphill battle. The ULA has often proved to be quite troublesome, as they are expected to be the target of Oracle’s new audit wave after the release of their 2020 Q4 report. It can also be the target of an audit if you’d like to exit out of your ULA, as one common surprise Oracle likes to give as a going away present when you’ve decided to leave your ULA is an audit of your scripts to compare it to your usage. If you are thinking about exiting your existing ULA, you may find yourself being pushed towards renewing it anyway for a variety of scenarios Perhaps you’ve mistakenly deployed Oracle software not covered by your ULA, or perhaps you have lost track of what has been deployed in your software environment and now have no idea what you would owe if you left your ULA . You may have also deployed your ULA software onto non-Oracle cloud platforms, like Azure or AWS, which will require you to purchase missing licenses.
Know Your Data Inside and Out
This is true of any negotiation, not just with an Oracle contract renewal. Having strong visibility into your data regarding your software spending and usage will give you the information you need to do more than just guesswork when it comes to your anticipated usage. Data will also give you the ability to plan, instead of simply buying for what you are currently using, you can purchase to accommodate for future growth. Oracle products are also known to be quite lenient – they will often allow you to install and use products without checking your licenses, expecting you to simply know what you are and are not licensed to use. Understanding the ways in which your company intends to or is currently using Oracle will allow you to pick out any changes in use that might occur over time, whether that is intentionally or (more alarmingly) unintentional usage. Knowing your data regarding Oracle will prevent any compliance issues that may arise, even if you are perfectly in control of your Oracle usage.
Take Control of your Oracle Contract Renewal </h2 class=”headline”> 2020 has been rough and it might be necessary to renegotiate your contracts to accommodate for this new normal. Knowing what to expect from a contract negotiation with Oracle will allow you to be better prepared. If you would like help in organizing your next software contract with Oracle, MetrixData 360 has helped successfully navigate our clients through Oracle contracts on many occasions and saved them millions of dollars. If you’d like to know more about how MetrixData 360 can help minimize your software expense while maximizing its value, you can read our new article on how to negotiate for layoffs and saving money during a pandemic.
People tend to not take a keen interest in software asset management, brushing it off as half-baked assumptions, corporate fairytales, and IT lore and mythology — until their company’s most recent software audit has gone south and they’re now looking down the barrel of a multi-million-dollar settlement. Then, all of a sudden, they care an awful lot. At MetrixData 360, we take pride in educating our customers in order to demystify the complexity of your software, so that it’s not a game of Russian roulette every time you’re audited by one of your software vendors.
Software Asset Management is Not as Important as IT Asset Management
While IT Asset Management and Software Asset Management both belong to the technology department, they approach that technology in different ways. ITAM is interested in the lifecycles around all IT assets, including hardware, software, devices, keyboards etc. while software asset management only deals with…well, only the software side of things. Since ITAM has a broader scope and tangible assets to work with, ITAM will often have more opportunity within a company to interact with different departments and display their worth. Compare this to software asset management, which deals primarily with intangible assets like software and deals with either the IT or financial department exclusively, so SAM can easily get lost in the shuffle of things.
I’m Not in a Software Audit, so I Don’t Need to Worry about my Compliance
Software audits are on the rise, and they won’t be slowing down any time soon due to the massive amounts of revenue that the software publishers can generate from them. There are many factors that can increase your risk of receiving an audit, such as the size of your company, the software vendors you have in your profile, and even your recent conversations with your sales rep. However, there is a certain level of inevitability to software audits as some software publishers send out audits on a routine basis or at random. For many companies it is hard to go more than three years without receiving notice of an audit of some kind. It is not a matter of if you will be audited, it’s a matter of when. The moral of the story is that if you are not being audited, you should still prepare as though you will eventually be audited (odds are, you will be).
On that note, there are many benefits to remaining in compliance other than avoiding potentially paying out huge auditing penalties (although that is the main appeal), such as:
You can optimize your spending and cut back on any wastage. Software asset management doesn’t just reveal where you are underpaying but also where you are overpaying
You can track the value of software and whether its consumption is worth the amount you’re paying
I have Installed a Software Asset Management Tool; My Job is Done!
Many companies struggle with software asset management but not for lack of trying. However, their struggle begins when they rely too heavily on automated software for licensing and inventory. Software asset management is not really a flip-the-switch-and-leave-it-alone type of processes but that also doesn’t mean that you should get out a pen and note pad and start counting things yourself, unless you want to repeat that phase in your childhood where you tried to count to a million. Even after your SAM tool is deployed, SAM is a journey that requires a lot of work to reach full optimization, which can take anywhere from a few months to a well over a year, depending on your goals for software asset management and how deep down this compliance rabbit hole you want to go. After implementing your SAM tool, you will need to address work towards finding the answers to the following questions:
Is the data that my SAM tool collects accurate? The last thing you want is to be working off of faulty numbers. It will undermine the authority of your whole SAM process; you can test the accuracy of your data through physically spot-checking, asking for lifecycle updates from the IT teams, and comparing data sets.
Are there any compliance risks that your SAM tools are picking up?
Are there any redundancies or cost-saving opportunities?
These aren’t easy questions to answer, and the data that you gather could be interpreted to draw different conclusions. It requires knowledge and experience in different software vendors and licensing metrics to be able to read and manage your SAM tool effectively. This is why it is important that you hire a SAM expert, either in-house or outsource the project to a third-party. Your SAM tool is just that: a tool, it will never be anything other than a waste of money if you don’t have someone who knows how to use it.
If We can Run the Software, it must be Properly Licensed
This would a nice scenario for an ideal world where every day is sunny but sadly, life and licensing, tend to get a bit messy sometimes and there are many scenarios that can leave you running software that isn’t licensed. There are many software vendors that will allow the installation and running of their software without a proper license in place, trusting you to know whether your software is properly licensed or not. Microsoft for instance, will often let their EA customers install software under the pretenses that they will pay for any missing licenses during the next true-up. For IBM, customers have the option of either licensing their software as Sub-Capacity and installing ILMT or licensing them at full capacity. If you do not have ILMT properly deployed over every piece of software that is licensed at sub-capacity and you do not have it licensed at full capacity, you’ll be smacked in the face with some massive penalties in the next audit. If you have your software properly licensed but then you move to the Cloud, your licensing metrics could change, and you could suddenly be missing licenses.
On the flip side, you could also have a license for software that you cannot run. We have often seen when using our Office 365 Consumption tool to evaluate our customer’s software licensing environments that they have licenses with blocked users that were unaware that they had licenses because…they couldn’t access Office 365.
Here’s the moral of the story: Don’t take the fact that you can turn it on and run a piece of software as any solid indicator that you’re allowed to do so.
Software Asset Management is Nothing but an Expensive Luxury
When it comes time for companies to pick which processes will be invested in, software asset management often gets the short end of the stick. It can often seem like SAM isn’t worth the money but when SAM is properly implemented the return on investment can be huge, for a number of reasons:
You pay what you actually owe in an audit, nothing more: we have often seen companies without a proper SAM process in place end up being forced to pay an overly inflated audit penalty (many times more than what they actually owe) and being unable to do anything otherwise because they do not have the data or licensing expertise they need to defend themselves.
Avoid Compliance Issues altogether: you know what is better than paying the minimum? Avoiding paying altogether. SAM can catch compliance issues before they become issues, which will lower your exposure during an audit, keep your relationship with your vendor in a good place, and lower your risk of being audited continuously.
Your Cybersecurity can benefit: savings aren’t the only area where SAM can provide your company with valuable information. With a software estate that is devoid of redundancies and untracked assets, your IT security will be able to effectively apply patches and upgrades throughout your system.
Cut Spending: Not knowing what is in your software licensing environment can easily mean overspending and wasted licenses which can be recycled and put back into the system.
Empower your IT Department: knowing what is in your software architecture will mean that you can make important decisions based off of that information like whether the software is worth the continual investment, if there is room for better software, or how you intend to reflect any expected growth for your company regarding your software spend. With the hard data that software asset management provides, your IT department can answer these questions with confidence.
Sure, software asset management might not be everyone’s cup of tea. It might be hard, tedious, and overwhelming but important things are often hard and having a clear understanding of what software asset management is and how it can better your company can mean the difference between watching your company flourish and watching it flounder under crippling software expenses. At MetrixData 360, our goal is to educate our customer base, so that they are not at the mercy of their software. If you’d like to learn more about how you can take back control, check out our other articles: What is Software Asset Management, and Beginner’s Guide to Software Asset Management.
It’s no crime to not enjoy software audits, who would? They’re stressful, unpleasant experiences that can result in crippling audit penalties and the feeling of being powerless when it comes to your own software. Humans naturally want to avoid things that cause us distress, so is there any way to avoid software audits? The short answer is no, there is no guaranteed way to completely eliminate the chance that you’ll be audited but there are ways you can decrease the frequency and likelihood of your company being audited. At MetrixData 360, we have noticed a pattern in the behavior of the auditors, and we’d like to share our findings in what can lower your chances of getting audited.
Why Do Software Audits Happen?
The first step in understanding how to decrease your chances of incurring a software audit is understanding why software audits happen.
(Un)Luck of the Draw
There is a sense of randomness to software audits, as some software vendors send out audit notices either regularly to their customers or through picking unfortunate names out of a hypothetical hat. So, there’s little you can do to stop it from simply being your turn. However, many companies think this is the only reason for software audits and so hang their heads and accept their fate, but there are other things that can cause a software audit as well.
Money
I wish I could tell you it’s more complicated than that, but in the world of business the heart and soul are plated in gold. Software publishers will often use software audits as a source of revenue, and if the software audit plays out the way they want it to (with you being out of compliance and writing a check to them with many, many zeroes on it), then they won’t even have to cover the expenses for the software audit process, that will instead be handed to you. However, if their goals are purely fiscal, then that means they’ll target companies that are guaranteed to reap massive rewards. Companies that the software publishers have strong reason to assume are out of compliance enough to yield a large return on investment might as well coat themselves in barbeque sauce, because all the software publishers will see is a meal.
Sales
Software Audits are also used to meet sales quotas because at the end of a software audit, you’re forced to purchase all your missing licenses at full price (no historical or contractual discounts will be included, sadly). It also puts you in a pressured position to buy, they’ve got you in a corner, they wait until they see the glint of panicked sweat on your brow and then they deliver to you a sales pitch.
The Payout for Hyper Complex Software Contracts
There are plenty of legitimate reasons why software contracts are as discouragingly complicated as they are: technology is constantly changing and licenses constantly struggle with dealing with that complexity, and many customers request hand-tailored licensing options. However, that doesn’t eliminate the fact that software vendors make no effort to simplify the matter into something their customers can actually understand.
Now that we understand why software publishers conduct software audits, we can talk about what you can do to reduce the risk of software audits.
Demonstrate Organization and Understanding to the Software Vendor
This is especially true if you are a sizable company with multiple branches or if your company has recently gone through a merger or acquisition. Such situations will make you susceptible to disorganization and from there it increases the likelihood that you’ve missed something. If you are asked questions by the software auditors, it is important that you answer them effectively and completely to demonstrate a strong understanding of your software contracts. To gain full insight into your software estate, you will need to perform internal audits regularly, have a SAM tool in place that manages your software estate, and a team in charge of the project.
Educate your employees on the value of software asset management and have a defense strategy in place in case of a software audit. Even if you do receive a software audit, having the process be organized, streamlined, and resulting in minimal penalties will prove to the software vendor that you are not an easy target. Getting organized means having your licenses in order, having a defined person in charge of your organization’s response to a software audit, and having an audit defense plan in place. Software audits tend to have tight response times, so this cannot exactly be a ‘learning on the job’ scenario. By knowing what to do, it will mean that any software audit that is presented to you will go smoothly with minimal damages, so you are less likely to be audited again in the future.
Know What is in Your System
Have an effective asset life cycle in place, including a means of purchasing and a means of retiring any assets to ensure they are effectively tracked. We have seen rogue purchasing and ineffective asset retirement result in a quiet drain on IT budgets through the purchasing of multiple unneeded licenses.
Your Active Directory is the place most software auditors will look when attempting to compile your compliance gap. Many companies do not have access to their Active Directory and as such their AD will consist of every device and every account that has passed through their software architecture, not just the ones that are currently in use. Employees that have left the company, and devices that have been sitting in storage collecting dust will all be present in your Active Directory and the auditors will argue that they will all need a license.
For More Audit Defense Information
Software audits are on the rise and they aren’t slowing down anytime soon. There’s no magical cure to repel auditors for good, but there are ways to reduce your risk of software audits. Your best weapon of defense is to be prepared. If you’d like to learn more about how to get ahead and stay ahead of the audits, you can download our Audit Risk Checklist, which will give you a breakdown of all areas where we see our clients struggle with compliance.
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