Creating & Maintaining License Pools

You have no doubt seen the research:  the average organization will over-purchase licenses for around 20-30% of the software estate (making the likelihood that the same organization will be found to be under-licensed on another 30% of the software all the more cruel). 

While an effective Software Asset Management (SAM) program and platform will help eliminate both of these issues moving forward, it can’t turn back time and so many organizations will find themselves with licenses they have acquired that are not in use at any given time. Using an appropriate SAM platform, it is possible to ‘pool’ these unused licenses together, creating a consolidated view of the entitlements across the organization that are currently surplus to requirements. 

This intelligence can be used to drive value in a number of ways:  renegotiating renewals or support contract with vendors, future planning or – as we’ll discuss in this blog – accelerating and streamlining the process of fulfilling new requests for software deployments from users and line-of-business functions.

how do I generate a License Pool?

Taking Snow License Manager as an example, the user should focus on the usage stats feature as this data plays a big role in helping to create a license pool. The first step is to identify the software applications that have limited or no usage figures, i.e. those applications that haven’t been used in a certain number of days (such as 30, 60 or 90 days) or software that is used very infrequently and a cheaper or free alternative can be found. I would suggest that the SAM manager alert the user that their license will be removed from the machine, and the reasons for this action. If the user states they still need the software, it is then up to the user and manager to determine the business justification as to why they need the software.

The budget holder should be advised and cross-charging may occur. If there is no business justification, then the software should be scheduled for removal. This can be automated through technologies such as Snow Automation Platform, where different usage time outs can be created for different applications, and automation uninstallation will be scheduled. Automated integration with Snow License Manager ensures that compliance changes are shown as licenses are reclaimed and/or redistributed. 

Key steps for producing the license pool.

• Identify software that is no longer in use or not allocated to a user/device.
• Alert the user that unused software will be reclaimed and why this is beneficial to the organization
• Ensure the software is completely removed from machine
• Add the license to a license pool within Snow License Manager
• Manage the license through Snow License Manager for future usage, ensuring that contractual or licensing rules are not broken (such as Microsoft’s 90-day rule), you may need to quarantine it for a short time.

Microsoft’s 90-day rule means that customers are prohibited from reassigning licenses on a short-term basis from the last assignment date (short-term is classified by Microsoft as 90 days). Microsoft also states that you cannot reassign licenses for Rental Rights, or separating Software Assurance (SA) from the underlying license with which it is attached. There are overrides within the datacenter environment thanks to the ‘mobility rights’. However, in order to create a license pool we would suggest you understand your Microsoft entitlement thoroughly to ensure the 90-day rule is adhered to.  

OVER-COMPLIANCE

Gartner suggests that organizations are spending large amounts of money on software and that 20-30% of this outlay is effectively wasted. This is usually down to a lack of governance and software management resulting in the organization not knowing their actual requirements. Any spare licenses that have been purchased without proper process or governance should also be added to the license pool. It is important that any future license requests come out of the pre-existing pool, rather than new licenses being purchased. This will help towards a reduction of software waste and also help the organization to maximize their investment.  

How can I see & manage licenses in a License Pool?

For organizations without an effective SAM platform deployed, it is possible to create a license pool in a spreadsheet.  Possible, but very time-consuming and far more prone to error than the advanced licensing knowledge in-built in solutions like Snow License Manager. SAM technologies are the best way for identifying and managing any license pools that an organization may have. With Snow License Manager for example, there are out-of-the-box automated processes that assist the use in reclaiming unused licenses and re-harvesting them to the appropriate user. Customizable Snowboards, pre-built reports and built in analysis provides all the data required to make educated, intelligent decisions about your software licenses. The Snow License Manager user can alsocreate and manage a license pool in a number of different ways:

• Create a custom ‘entity’. A license pool entity can be created within Snow License Manager for each cost center or business unit, or just a general license pool. Any reclaimed licenses can then be assigned/allocated to the relevant license pool entity for active management, and to ensure that only authorized requests or deployments come from the license pool.
• Mark ‘pooled’ licenses. If the creation of custom entities within Snow License Manager does not work for the organization, then a simple and effective method would be to ‘mark’ pooled licenses with a comment, star or other unique identifier. This makes it easy to identify free licenses within the solution and any exported reports.
• Create a license pool agreement and attach free licenses to it. The agreement can then be assigned to a certain business unit or entity within Snow License Manager and actively managed by the SAM function or business unit cost center budget holder.

What are the positives & negatives of a License Pool?

License pools are a brilliant way of showing that you have a proactive SAM function; the SAM function has planned ahead, recycled licenses and recouped any inactive usage. However, license pools could also be considered negatively. Why are there licenses that are not in use? Having licenses that are not in use counts against the Software License Optimization (SLO) principle just as much as having inactive software on machines.

Positives

If generated in the correct way, a license pool is a clear indication that the SAM function is managing the organization’s software licenses. It shows that the SAM function has gained a level of maturity beyond the basic first steps, and that they have a proactive approach and mentality. To further emphasize the benefits of license pool we have created a list:

• Reduces spend on software licenses. No need to purchase more to fulfil requests as there are more than enough in the license pool.
• Helps achieve SLAs for new software requests
• Shows a proactive and controlled approach to software licensing.
• Highlights the fact that SAM ‘owns’ the software; If it is not in use, it will be removed and re-harvested
• Reduces the risk of being under-licensed, thus reducing the risk of being fined by vendors or auditors
• Provides a great dataset for senior management that highlights the importance of SAM and license management. “We were non-compliant by X amount last year, but through license re-harvesting and the license pool concept we now have a pool of Y amount of licenses ready for use”

Negatives

Any software licenses in a license pool can be seen as a waste of money. The organization has paid for the software, but it is not being used. This could be classed as software not being optimized, and a waste of money. Sometimes, license pool can be created off the back of overspending on software licenses through a lack of knowledge or optimization process.

An organization may have overspent and overestimated the amount of software licenses that are actually required by the organization. If the organization has a license pool because of the above scenario, then a license pool can be seen as a negative. However, every cloud has a silver lining. The creation of a license pool is one of the first actions a SAM team can perform once they have implemented a SAM tool, and can be considered a ‘quick win’.  

LICENSE POOLS ADD VALUE TO SAM

License pools are a fantastic way of showing that the SAM function is proactive and ‘one-step-ahead’ if the pool has been generated in the correct way. Pools created through the reclaiming of unused licenses, the removal of licenses from retired machines or users no longer with the organization and through a planned overspend (future projects, estimated future requirement based on an increase of employees etc.) prove to the business that there is a sophisticated license management function within the SAM team.

If you are having problems effectively managing your software assets, then make sure you read our Whitepaper ‘SAM in an imperfect World’ for useful hints and tips from our SAM experts.