During the eighties, almost all end-user software was installed on users’ individual desktops, which were typically UNIX machines from SUN, IBM, SGI, etc. or MSDOS PCs. Over time, more end-user software used in engineering was ported to work on the lower cost Windows platform. In most cases, such software licenses were “node-locked”, most of the time accompanied by a hardware dongle. This arrangement implied that the software was available to only one user at a time, and in reality was typically used no more than 30% of the total available time.
Eventually, many software vendors started providing software using a license sharing model where multiple users could check out a software license from a license pool as long as one was available. UNIX-based systems that supported X-terminals made it possible to run software on a user’s X-terminal connected to a powerful UNIX host. This licensing model resulted in a higher utilization of the company’s acquired software assets.
Over the past 20 years, the shared license model has become the most prevalent, while node-locked licensing has declined. There are a large number of licensing models on the market, such as FLEX, LUM, LMX, RLM, DSLS, and other proprietary examples like BETACAE, LSDYNA, etc. that are developed by the software providers themselves. Many software providers choose to use licensing systems developed by vendors who specialize in licensing software. Some software providers support both licensing models, shared and node-locked.
Why do these issues matter? In the past, companies simply bought or leased a number of copies of software, installed them on end-user desktops and did not worry about how often the software was used. There was no alternative. With the adoption of shared licensing and a corresponding increase in cost per license over node-locked licenses, tracking software usage became more important. Shared licensing was more expensive to offset the revenue risk to software vendors.
Most corporations make highly significant investments in their business software. Because of the uptick in shared licensing as well as a growing variety of licensing systems, it is fiscally responsible for corporations to track software usage. To do so, companies have to rely on reporting tools provided by such licensing systems, which are often proprietary. Obtaining consolidated views of software usage, denial of service, or usage broken down by departments or regional offices becomes extremely labor-intensive.
This more or less outlines the need for reporting and analytics solutions to dissect overall corporate software usage in order to make informed license inventory decisions. I will continue this discussion in a series of future blogposts. The focus will be Altair’s Software Asset Optimization (SAO) solution that was released in late 2012 and has been successfully adopted by 30 customers worldwide.