How to keep dry in a licence downpour

The world is moving away from hardware and towards software, even regarding the phones and other network end points that used to be mainly hardware concerns. Software licences represent "a fundamental change in the funding model" for communication technology and confusion will be the name of the game, in the short term. That's the assessment of PlanNet Consulting. The firm's manager Doug Carolus and senior consultant Craig Burness presented their thoughts on the software trend at VoiceCon in Orlando in early March.So, what, exactly, is a licence? It's a contract between the buyer and the seller to protect the seller's intellectual property. It outlines who can use the software, where it can be used, and where it can be moved. There are different flavours of licences. Concurrent licences allow many users to share a single resource. Call centre seats often operate this way, Carolus said. A named user licence applies to a particular user. A designated system licence applies to specific servers.Vendor ChangesA problem with licences stems from vendor changes. In their attempts to hit on the right licensing models for their various wares, equipment sellers change their licences often and further confuse the issue. "It's usually all over the map, depending on the manufacturer," Carolus said. As well, the vendor's resellers and dealers aren't always up on the latest licensing policies, which makes it tough to price new systems. And since there are no standards, it's difficult to compare vendor prices.In one case, the vendor had a particular price for the first 100 licences, a higher price for the next 200 licences and the original price for the final 6,700. Prices seem arbitrary. "They don't always have a good answer" for higher or lower prices, Carolus said.Unified communications (UC) makes things even worse. Licences for IP telephony combined with licences for messaging and call distribution become muddied when they all work together. Even voice and email message storage choices affect costs. Carolus said companies should expect to pay higher prices for customer-premises-based message storage compared to vendor-hosted storage.How can businesses pull through? Carolus suggested companies should pay attention to the tier-breakers. Sometimes vendors will offer a much lower licence price for 51 as opposed to 50, making it worthwhile to purchase the extra licence. As well, companies could use the calendar to their advantage: make the purchases at the end of the vendor's fiscal quarter or year. Sellers are more willing to negotiate to get the sale in and boost the financial results.Simplify ThingsAccording to Burness, Vendors are trying to simplify things with fewer tiers and fewer packages. The choice-count might be down, but it's easier for companies to negotiate.In January, Cisco Systems Inc. amended its licences to co-ordinate with the evermore complicated interplay of applications, middleware and network infrastructure. The firm's IOS operating system for network equipment would now be available in an on-demand format: network operators can essentially turn on or off new IOS capabilities installed on the network hardware. To help people track licences, Cisco also unveiled the License Manager, a client- and server-based application that automates functions associated with software activation. Cisco said the manager can be used for 10,000 devices.Burness said Nortel Networks has two software levels, down from five, for the latest version of its enterprise-sized CS1000 IP-PBX. The firm also has a special digital-to-IP licence for companies using a hybrid IP system (IP in the backbone with digital sets on the desks).It's important to mind the support agreement. Software has a shorter shelf life than hardware, so companies shouldn't expect vendors to support the software as long. "It's no longer 10 years," Burness said.Go Over DetailsIt's also important to go over the details with vendors. Invite them for one-to-one discussions of warranties, licence mobility and support. The one-on-one route is better than a vendor conference, Burness said.Licensing might be new, but the same old rules apply. "A maintenance price that seems awfully low probably is," Burness said. Challenge things that "don't smell right."In the future, vendors will use more bundled software licences and more "on demand" licences that dole out services from equipment on a per-use basis, Carolus said.

How to keep dry in a licence downpour

News | April 1, 2007

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