Salvatore Salamone
Software metering programs, which were originally designed to enforce concurrent licensing agreements and prevent liability for inappropriate use of software, are now being used to cut software costs. Already, companies are cutting licensing fees in half by exploiting a feature of metering programs that reallocates licenses across time zones. Reallocation lets a company get double-duty out of licenses by passing them from, for example, U.K. users at the end of their day to San Francisco users as they start their day. While such use may be a short-lived phenomenon (applications vendors are already reexamining their license agreement terms to prevent this), it indicates the cost savings that companies can gain through a metering program.
Global reallocation among time zones represents the extreme of software license savings, where the costs are cut by 50 percent or more. However, the Personal Computer Assets Management Institute (Rochester, NY) estimates that corporations that inventory software, track its use, and reallocate licenses among departments can cut software purchasing costs by as much as 30 percent.
An immediate benefit of using metering tools is savings achieved through license reallocation when servers share licenses. Such savings are possible even in a modest-size organization, thanks to concurrent licensing agreements and the metering tools sold by vendors like the Elan Computer Group (Mountain View, CA), Frye Computer Systems (Boston, MA), McAfee (Santa Clara, CA), Microsoft (Redmond, WA), Microsystems Software (Framingham, MA), Saber Software (Dallas, TX), and Symantec (Santa Monica, CA). Many new metering programs dynamically redistribute licenses within an organization so that, for example, a purchasing departmen
t can use (and return when needed) an accounting department's 25 unused licenses for Word.
Metering tools offer other ways to save money. IT (Information Technology) departments can use a metering tool to log programs (i.e., track how often and how long a person uses an application), to bill software support costs to departments based on use. Support costs dwarf licensing fees--support is about three times more expensive over the lifetime of a typical software package, according to the Gartner Group (see the chart ``
Total Software Costs
''). These support costs have, for the most part, been absorbed in IT budgets because corporations haven't had a fair way to assess charges.
Corporations that track application use can achieve other cost savings. For example, it's not efficient to pay for 1000 copies of a special-purpose program like a flowchart application if only five or six people in the company are using the application at a time. But software vendors are reluctant to acc
ept a concurrent licensing agreement that covers just a handful of simultaneous users when they sell to a large company.
One solution is to charge for software based on the amount of time it is used, not on the number of concurrent users. ``It's the idea of the utility billing concept for software,'' says Nigel Spicer, president of Microsystems Software.
This type of software licensing option, while not common, is being discussed by vendors, according to Peter Beruk, litigation manager at the Software Publishers Association (Washington, D.C.). However, applications vendors will agree to this form of licensing only if a tool is in place to measure this use.
If companies demonstrate that this is possible by virtue of a metering tool, it will make several more applications available to corporations. Vendors will benefit by getting their products into markets from which they've been locked out due to high per-license pricing.
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You're Saving Money When the Meter's Running
