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In the context of floating licenses, what is an average? This is the question that kept our guest, Paul Smith, up at night. His discovery: to measure an average, you need to know your denominator. And the only way to understand that, you must ask the end users. In the end, finding the balance point between finance, procurement, and the end user is all about understanding the data and asking the right questions.

With this knowledge in hand, your organization will be able to better navigate the ever-changing current of your business’s needs.

We discuss:

  • How to get more value for money
  • Finding a balance between being under or over licensed
  • Selecting the right tool to decipher the data
  • Automating the deployment process
  • Asking the right questions

If you’re interested in learning more about Paul, connect with him on LinkedIn.


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Webinar/Podcast Transcript

Paul Smith: In the context of floating licenses, I spent ages wrestling with the question, what is an average? What average do you measure? And actually the first thing you do is you don’t measure an average. You ask a question. So the first thing to do is talk to the people who are using the software, find out how it’s being used because that will give you some real information.

You are listening to the ITAM executive, a podcast for ITAM, leaders and practitioners. Make sure to hit subscribe in your favorite podcast player and give us a rating. In each episode, we invite seasoned leaders to share their tips on how to define your strategy, promote the value of ITAM in your organization, and align your program with the latest IT trends and industry standards.

Let’s dig in.

Sara Hunter: Hi everyone. I’m Sara Hunter. I’m the host of this episode of the ITAM Executive, and I’m really happy to be joined by Paul Smith. Welcome, Paul.

Paul Smith: Thank you very much indeed.

Sara Hunter: So it’s a lovely Monday, sunny afternoon, and we’re sat having a chat around where we are in terms of your chosen topic.

Paul, perhaps it’s worthwhile making a quick introduction for those that are listening today.

Paul Smith: Yeah. And hi, I’m Paul Smith. Originally graduated in electrical engineering and spent, then spent 15 years working mechanical test lab before moving into it which I’ve been doing now for 20 years. Covered various bits, but for the last few years I’ve been covering full-time software asset management, and trying to get to grips with that for a major engineering company.

Sara Hunter: Wow, that’s a bit of a change from the usual, which is that I just inherited it and I fell into it, which is what some people tend to do. Cause it’s not always been some people’s chosen. They’ve gone into a meeting and they’ve talked about, Hey, we could save some money. And all of the sudden that, that turns into a whole new career.

It’s great to have that. I think part of what we were talking about is obviously what you bring to your organization and an area that you’ve really found, let’s just say fits in quite nicely with your role, and I suppose the term is floating licenses as you refer to it. I’m loving this because we’re learning new things all the time and as we know, acronyms are all around us.

But the floating licensing terms is a good one. Perhaps you could talk around that.

Paul Smith: I certainly can. Yes. Floating licenses or some people call them concurrent licenses. Hopefully most of the people listening to the podcast will be familiar with the idea of what a floating license is. It’s remotely served from a server where you have software that is not necessarily intensively used.

I’ve known of an application where there were six floating licenses and 60 users, but only six of them could use it at any given time by the same person all the time. It can be a very cost effective way of providing some very complex capability for a large number of people in a way that’s value for money, and that’s probably what the actual subject is about, is trying to get value for money from these floating licenses.

There’s self-governing. As I said, we have six licenses on one server. The sixth person grabs a license. The seventh person comes along and gets a message saying, there are no licenses available, so you can’t be under licensed. So people tend to think that they don’t need to worry about it because under licensing is all they’re worried about.

They can’t be under licensed. Problem being, of course, that you could get circumstances where you have a hundred licenses and one user you won’t be under licensed, but you are wasting a heck a lot of money.

Sara Hunter: Yeah, absolutely. Absolutely. And as you say, under licensing, it is as bad as being over licensed because again, it’s money that you’re spending that you don’t need to spend.

So how are you addressing that within your organization?

Paul Smith: I’m going to split hairs because the tagline was value for money because you do want to be, or you will end up being under licensed. It’s impossible to have the perfect number of licenses all the time. Someone goes on holiday, are you under licensed?

Because they haven’t used it for three weeks. It’s really about value for money and you can get tools, some very good tools that will measure the amount you are using. Floating licenses. Also, most proprietary floating license systems have. A log system, they produce log files, and I’ve known someone who would actually take all the log files and number, crunch them manually in order to produce data.

So either method will work and it will tell you how many licenses are in use at any given time. But that’s just data. It doesn’t give you an idea of whether you actually have value for money out of that or not, and it’s a balancing act. As you’ve said. You don’t want to be particularly over licensed. You don’t want to have that condition where you’ve got a hundred licenses in one user.

But equally, you don’t want to be constantly having a small number of licenses, six licenses, and constantly every half an hour, another person wants a license and gets a message saying, there’re an unavailable because that impacts your business. So it’s very much trying to navigate that position and it’s a bit like trying to navigate a boat down a wave.

You don’t want to be too much one way and you don’t want to be too much the other way either.

Sara Hunter: Don’t want the wind blowing in the wrong direction. That too. So in terms of obviously being able to calculate or to ascertain, where would you tell our listeners to start off?

Paul Smith: To start off with, I would suggest that it is probably easiest to use a tool that will measure that most of the major software asset management vendors produce tools. And there are also some specific tools that measure just this and nothing else. And indeed, some of the software vendors will give you a tool that will measure not only their software, but all other software that runs a similar system.

There are some very good tools out there, some very good opportunities to get software that will allow you to measure what is going on. If you want to do it on the cheaper, if you have a very small area and you have the skillset set, you can use the log files. But I would recommend looking at a tool to monitor what is going on.

Sara Hunter: Yeah, absolutely. Absolutely. Any other good hints or tips that you like to share with the folks where you feel for your company Certainly benefited, and obviously as you say, concurrent licenses, floating licenses. We like to be able to be in a position where procurement team, because as you say, you don’t want to be keep getting asked the question, can you make available?

So it’s that profile in the kind of product as well. I presume that you’d be looking at profiling the kind of users within your organization to see whether they actually need such an access to a particular software.

Paul Smith: Yes. You’ve got what you would colloquially call engineering. Software generally has this type of thing because you’ll have.

Maybe CAD stuff. Maybe modeling, whether it’s physical modeling, thermal modeling, things like that tends to be the type of area you’re looking at. And work can ebb and flow sometimes through those. But generally, you know the type of person, your CAD operators, you know the team who are specialists in say, static or dynamic mechanical modeling or thermal modeling or.

Perhaps materials, looking at particular types of materials and the way that they react in certain circumstances. So yes, you’ll have particular areas that you will be doing that, although it has to be said that some of the larger software suites can cover quite a lot of areas. And as with most software, there’s always the question of whether you want to benefit from having lots of software from one vendor, which allows you to have a good relationship with that vendor.

And also because you tend to buy more from them you look for a bigger discount as opposed to having lots of smaller bits of software and the overhead of managing that. On the other hand, sometimes more bespoke software can be better for your particular circumstances.

Sara Hunter: Yeah, I suppose that applies also not only to volumes, but also maybe the suite of products depending on what’s in there and the complexities.

So again, profiling that kind of user and understanding your environment. But I think also, putting that to your, let’s say, your IT teams that are actually setting up your new recruit, being able to make sure that it is monitored and obviously there, there’s not a device sat there that it’s been allocated to.

And as you say, it’s monitoring that to make sure it’s not allocated to there and it’s just been sat there because nobody else has wanted it and therefore it’s seen as not as been in use when reality is that person may have been on leave for three weeks, taking a nice vacation. I suppose that takes into consideration as well, Paul.

Paul Smith: Yes. When you talked about profiling, one technique that I know has worked quite well, of course, is that if you have a large organization where you have specific teams that do specific jobs, then you have a set list of software that people who join that team will automatically have deployed. And of course, with floating licenses, you can deploy the software to them.

They don’t consume any licenses until they actually start using it. There’s not a huge overhead in having a team of say, a dozen people all with access to a suite of software, but actually as they require it, they will use different component parts of that software and some software to facilitate that sort of thing, rather than saying if it was fruit, you have five licenses for apple and seven licenses for pear and six licenses for peach.

But some of them will go apple’s are worth 10 points and peaches are worth 15 points and pairs are worth 20 points. And you have 120 points and you can mix and match how you like. But of course that then gives you a different amount of complexity in how you work out exactly what’s going on. And that’s why having a good tool and being able not just to see the total number of points that you are using, but what.

Component parts you are consuming in order to reach that total can be very beneficial.

Sara Hunter: Yeah, and I suppose that also helps if I say getting buy-in from your organization as to why you would invest in such tools that you can see the value behind it. Going back to that value for money, he’s been able to put that and quantify the procurement of such a tool to be able to validate.

Because again, that engineering software can be very costly in itself and being able to manage that and monitor that on a regular basis that. Your stakeholders see the value in that investment?

Paul Smith: Yes. Oh, very definitely. And getting the licensing right can save literally tens, hundreds of thousands of pounds.

My experience is that actually I find today where I am. Both sides of the argument want my buy-in. So the finance team, the procurement team who are policing the outgoing spend are coming to me saying, How much is this actually being used? Do we really need to purchase more licenses? And the users are often coming to me and going, we are seeing problems.

Please give us the data that supports and illustrates what we are finding in our experience. And I let the data speak for itself. I will tell both sides of exactly what I’ve got and what I can see from it. The users can interpret that data. I don’t know how they use their software. I just know they’re using it.

And from the finance side, I’ve built up a trust because they can see all of the data, they can ask questions directly, and we often end up with a three-way meeting in order to make sure that everyone understands what the usage is, why it looks the way it does, what effect that’s having on the business, and to agree what the end steps will be.

Do we buy, do we not buy?

Sara Hunter: Yeah, absolutely. Listening to you and how you’ve addressed it within your particular environment. I can see how that would interest other listeners today. For sure. One of those things that we get guilty of is when we’re in our environment, somebody else is using that software and they’d like to use it, but do they need it?

Do they require it? All comes down to this and it’s just about making sure that you’re being more effective in what you do and how you, you manage that. And I suppose going back to the old days of just having a spreadsheet and just saying they’ve allocated this user license, it doesn’t always work.

And I suppose with the evolution of the floating licenses, a concurrency in terms of also the intuitive nature of the licenses that, as you say, when it gets to that six license, and again, managing it from a, let’s call it, and I don’t particularly like using the word compliancy terms, but a lot of organizations still focus on that, being able to say that-or compliant.

Now today, you’ve got tools that are able to assist you in telling you what you’ve got, who’s using it, the information so that you’ve got that track and trace. It just gives you that bit more control.

Paul Smith: Yes, if you have data, then you can start to try and understand what’s going on. And yes, you do have to move beyond compliance, although just occasionally I’ll bring back one little side alley of compliance and that is some software vendors.

You’ve bought a hundred licenses, and the problem is you find you’re only using 10. You’re never more than 10. So you go, we want to cut from a hundred down to 10, and they go no. You’ve bought a hundred. You either keep a hundred and pay your maintenance for a hundred, or you stop and you buy your 10 from scratch, and then you get a different question about what is value for money.

Sara Hunter: Exactly. Exactly. And you can try and manage that from the get-go. And again, going back to the bare basics, and it is one of those things, value for money, understanding your license estate, being able to manage your customer expectations, so your end users, making sure that it isn’t stopping what they’re doing as a job.

Because again, time is money to such environments as yours. And that’s the big thing is if it’s not there, then you know, it potentially can have an impact from an output on what you are looking for. So having that control and the drive to manage that is so much more fruitful for you as an organization to manage that out.

Paul Smith: Yes. Yes. And then I’ll take the next step on top of that, because you’ve put in a tool, you have a lot of data, and then you think, what does it mean? And the first level you will get is you will see the amount of usage you’ve got. Brilliant. And you get these lovely graphs with lines and it looks like mountain tops going up and down and then peaks during the day, goes off overnight, et cetera, for a week.

And then there’s not much over the weekends. And you think, yeah, but what does it really mean? And then you look at it all and it’ll say, max, and you think, okay, that’s by maximum level. If the maximum hits by entitlement. I’m potentially impacting the business. You’ve got people who want licenses and can’t have them because they’re all in use.

So that’s the level. So you want your max to be just a fraction under your entitlement all the time. So that’s your first level, but then you think, yeah, but what happens if I only hit the maximum two days a year? What does that mean? And then you start asking yourself, how about an average? In the context of floating licenses, I spent ages wrestling with a question, what is an average?

What average do you measure? And actually the first thing you do is you don’t measure an average. You ask a question because I categorize software in two ways. The software say CAD software, where people interact with it. When they go home, you stop using it. So you only want to measure that over whatever your working day is.

So if you’re working days 8:00 AM to 6:00 PM that’s what you measure over. Or you’ll have some of the modeling software where people will program some fancy modeling algorithm and go run, and it’ll take three days to go. Yeah, and it will be consuming licenses continuously for three days. So you’ve got different ways of looking at it because an average for a daytime worker, you average over their daytime because if you average you’re over 24 hours, the maximum you’ll get is what a third.

Maybe 40% of your day, your maximum will be an average of 40%. You can’t have that. It doesn’t tell you anything, so you average that of your day. The things that you can let go and will run for days and days on end, you average those over the whole 24 hours. So the first thing to do is. Talk to the people who are using the software, find out how it’s being used because that will give you some real information and that sort of difference.

And being able to tell people, you can see that difference. It gives the users the confidence that you’ve taken on board what they do with the software, and it gives you finance department the confidence that you’ve dug into it and you are finding something that is meaningful. You’ve not just gone, oh, here’s a number, but there’s some real hard work gone into it, which there is.

Sara Hunter: .

Yeah, quantifiable data is always better backed up with the whys and how so that you can at least validate that. And then as you say, people know, and I suppose you also have to be quite savvy in terms of understanding what those terms and conditions means. If there’s any restrictions from locations or geographies around the license type that you’ve got, I presume it will start to also look at locations and geos and stuff like that.

Paul Smith: Oh yes, and this is back to the comment about if you’ve got a hundred licenses, but you have to renew them all or none. It’s always very important to look at your contract for your software to see what you are and aren’t entitled to. Sometimes you can have restrictions about allowing software to be used by subsidiary companies.

Especially if they’re not wholly owned or within, as you say, geographical areas. You’ve got the classical North America, et cetera, Americas, but sometimes also nationally. Some organizations, certainly one very large organization, looks on things nationally and you have to purchase your licenses in country.

Sara Hunter: Yeah, so there’s a lot, an awful lot to be considered and I think, this is a super topic to bring to people, certainly highlight what they should consider or if they’ve not considered where they can be. Any final words, Paul, if that’s final.

Paul Smith: I was just getting going so there is so much more to do.

That’s another podcast. We could, I was going to say that’s another podcast we could do. Yes, episode two. It is still get to know your users, build up the relationships both with the users, with the finance department, with the procurement department. Note your users, your estate, where things are, your contracts, and what you are going to do is you are going to not just say, oh, here’s an answer, but you are going to sell the data properly interpreted with reasoned.

Thing is you don’t know everything. Be honest about what you do and don’t know, but give the best you can do because you will find that it can really make a big difference, both for you and for the company you work for.

Sara Hunter: Absolutely very valid points. Paul, I absolutely loved talking to you. It’s a small world out there and I’m sure there’ll be some listeners today thinking what you’ve talked about today can impact them in their organization and how they consider it.

And as I said, a lot of people I talk to, you go into a meeting and you suddenly open up Pandora’s box and it starts another conversation. And this is just typically one of those conversations that have not either been considered or the actual implications behind it and how they can monitor that. And manage it.

Really. Thank you so much. I do appreciate it.

Paul Smith: Oh, it’s been an absolute pleasure.

Sara Hunter: And guys, Paul, he’s a great guy to get to know. And Paul, thank you so much and let’s see what we can do on the next edition.

Paul Smith: Be very happy to Sara, thank you very much for all your kind words.

Sara Hunter: Thanks very much Paul, and thanks everybody for listening.

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