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5 misconceptions of cloud software and virtual licensing

Thor Olavsrud | April 5, 2013
Are you leaving money on the table by not optimizing your virtual or cloud environment to cut software licensing costs? Don't fall prey to these five common software licensing misconceptions.

If you've been busy virtualizing your environment, or migrating to an internal cloud, chances are your software licensing and maintenance costs are spiraling out of control.

Every CIO wants to balance costs and maximize efficiency, but the shift to virtual and cloud hosting models has changed the game when it comes to software licensing, and many IT organizations are playing under old rules that no longer apply.

"Traditionally, asset management has been responsible for a lot of these costs and the operational groups were less concerned about it," says Andrew Hillier, CTO and co-founder of Richmond Hill, Ontario-based CiRBA, a specialist in capacity transformation and control systems for virtual and cloud infrastructure. "But if you're building an internal cloud, all of a sudden this becomes your problem."

Hillier says CIOs need to be aware of five common misconceptions of software licensing that can prevent significant savings in the data center.

Misconception 1: 'I License Each Software Instance, So Virtualization Doesn't Impact This'

"One misconception is that if you license per instance, when you move to the cloud it doesn't change," Hillier says. "They think it's going to be one for one."

But moving to a virtual or cloud environment opens the possibility of moving to a per-host model, where licensing an entire physical host server allows an unlimited number of instances to be run. That seems good on paper, but the truth, Hillier says, is that it translates into savings only if you can control virtual machine (VM) placement and maximize VM infrastructure. Essentially, he says, if you can defrag the environment to fit the expensive components on a subset of your infrastructure, you can realize huge savings.

"The licensing doesn't change unless you go to a per-host model," Hillier says. "Then you can radically change it."

Misconception 2: 'I'm Not Near a Renewal, So There Is No Point in Looking Into It'

"A lot of people are on a three-year contract or multi-year contract," Hillier says. "If you're locked in, you might say 'what's the point of looking into this?' But the fact is, even if you're not near renewal, it's still advantageous to save on the maintenance. Maintenance is extremely expensive; just on the maintenance the savings can be huge in these environments."

Just carving down the maintenance on databases can save millions of dollars, he says.

Misconception 3: 'I Have to License the Entire Virtual Cluster, So It Is Difficult to Cut Costs'

"People think that if you're going to run software, you have to license the whole cluster," Hillier says. "If you don't have any controls in place and can't control where it runs, then yes, you have to license the whole cluster. But you only have to do that if you have no way of controlling where the VMs go. If you do, you can license just the piece it's going to hit."


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