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Microsoft licensing primary concern for hosting providers

Many SMEs move to hosted services because of complex Microsoft software licensing

Written by Dave Bailey
Computing, 21 Jan 2010

A primary reason why end users outsource applications, is the complexity of Microsoft's software licensing, according to attendees at a roundtable on SME outsourcing held yesterday.

The software then becomes a major problem for the hosting providers themselves.

At the roundtable, James Griffin head of hosting strategy for business focused ISP, Star, said that navigating this licensing issue was a minefield and that he expects it to get more complex. He said: "When we move to hosted desktops, it will be a completely different ballgame."

He added: "The people who buy our service provider (SP) license agreements - SPLARs (service provider license agreements resellers) - are among our most valuable resources. I spend more time talking to them than I do any of the other vendors and partners."

He added: "They're the secret medicine that we use to take end user's licensing headaches away. I have someone dedicated to sorting out all our SPLAR spend."

Freeform Dynamics research director Dale Vile said that one of the biggest things affecting 'on premise' users licensing problems was virtualisation.

"This technology shows up licensing issues in a big way. These issues make on premise rollouts for end users more difficult and moving to hosted services takes away that pain," said Vile.

Problems with Microsoft's software licensing came up in October last year when Microsoft chief executive Steve Ballmer addressed UK customers at the UK launch of Windows 7.

One question put to Ballmer at the event was: "I would appreciate your thoughts on simplifying the application licensing."

Ballmer replied, "if any of you have specific concerns regarding things you think are just too complicated...I encourage you to email me."

reader comments

Managing software licensing in a virtualised environment

Virtualisation offers great benefits and flexibility but can also create gaping holes in corporate liability. In a virtualised environment, inadequate asset information and poor software licensing policies within the IT department could have disastrous implications.

Virtualisation allows an extended number of users access to software. The IT team in charge of the software assets are not necessarily aware of the implications of duplicating applications and it is company directors who will take ultimate responsibility. The Federation Against Software Theft (FAST) and ISO 19770 software asset management standards show little sympathy for company directors who disregard software licences, a crime which can now result in a 10 year jail term or hefty fine.

Only by being vigilant and instigating rigorous asset acquisition and disposal policies and recording detailed information about the software loaded, including its serial number, can any company attain real control over virtual software assets. This perhaps daunting task is made simple if the centralised asset register is used to its full potential.

With centrally stored software asset information, organisations can immediately check for unlicensed software and manage user numbers against agreed licenses. Using an accurate software asset register, the IT Manager can also provide the board of directors with a monthly report that proves proper licensing procedures and processes are in place.

Businesses need to be accountable for applications in virtual environments or they will shortly be facing very physical consequences.

Karen Conneely
Real Asset Management
Posted by: Karen Conneely, 26 Jan 2010

First published January 21, 2010

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