It has been impossible to avoid Coronavirus related articles, news stories or conversations for most of 2020. But for IT leaders, it is another C-word that now presents a growing risk to enterprise organisations throughout the world.
Where there is change in business there is risk. The rapid nature of change that has been enforced by the pandemic was largely unplanned and carried out in haste which will almost certainly lead to new areas of risk in terms of security vulnerabilities, licence noncompliance, unnecessary and unbudgeted overspend and new commitments to SaaS applications or cloud storage.
The most profound change for many businesses has been the transition to mobile and home working. IT departments across the world have worked wonders to facilitate this unplanned event, keeping their colleagues connected and productive. Huge and rapid investments have been made into new hardware and software to provide the means for large scale remote working.
Managing IT Assets in a Rapidly Developing Network
During the first month of the pandemic crisis, 58% of companies ordered new devices including laptops, tablets, and mobiles to manage working remotely. This response may have provided the equipment necessary, but with many organisations not immediately upgrading security or IT Asset Management systems to include their new hardware, there could be more trouble ahead.
The lack of properly planned IT infrastructure that inevitably comes from a fast shift to remote working means organisations large and small face challenges in managing their new complicated technology. Many IT and Operations leaders will also be aware that this change is here to stay. In a recent survey, Gartner found that almost three quarters of CFOs and Finance leaders believe that at least 5% of what was the ‘on-site workforce’ will become permanent ‘work-from-home employees’ after the restrictions put in place due to the coronavirus pandemic have been fully lifted.
Why Software Licensing Compliance Could Be Your Biggest Area of Risk
An area of risk where these changes will be felt most acutely is software licensing. For almost any software vendor – Microsoft, IBM and Oracle included – exceeding your allowed usage is the biggest mistake a company can make.
A recent poll by The ITAM Review found that software vendors are continuing to audit their customers through the COVID-19 pandemic, with a fifth of IT asset managers noticing a significant increase in audit activity. This is unsurprising as many of the major vendors who run audit programmes including IBM, Oracle and SAP have experienced falling revenues. Vendors are under financial pressure, and an increase in audit activity is already being experienced by their customers.
A shift to remote working also carries innate licence compliance challenges. For example, some Micro Focus licences have site restrictions that do not allow access from other locations, such as a user’s home, even with remote access. For Microsoft, remote access is always dangerous with desktop software such as Project or Visio. Organisations tend to provide access too easily, without realising that all remote access requires a CAL per unique user.
Most other RDS technology, primarily Citrix, is built on Microsoft RDS technology, so you still need RDS CALs to use the technology. This is in the small print of your Citrix contract, but it is common for organisations to forget this and end up short of Microsoft licences.
As well as the above, to enable remote working and a sudden increase of IT demand, there will inevitably be the need to quickly scale up hardware capacity, adding more CPU/memory to servers so more users can connect. Datacentre vendors like Microsoft and Oracle have very strict licence rules in this area. Customers who go ahead and dial up their CPU counts in their datacentre virtual machines or in Azure / AWS Cloud without first checking of compliance ramifications are in danger of violating their contractual agreements.
Added Software Expense and Missed Cost Savings
Paying over-usage during an audit is usually more expensive than the price you pay during purchasing, and for enterprise organisations, compliance shortfalls for vendors such as those mentioned above can run into millions of dollars of exposure.
It is also likely that new software agreements have been rapidly procured, an action that increases the inevitability of vast overspend on licenses. Expensive all-you-can-eat contracts may have seemed like the best option at short notice, or the bulk buying of full-feature licenses for products such as Microsoft 365 could have looked like a good way to ensure productivity across an organisation’s workforce is unaffected.
Three Ways to Turn Change into an Opportunity
1. If you have been forced to move to cloud quicker than you had originally planned, you may be unaware that the “dead pile” of legacy on-premise licences could have resell value. The EU UsedSoft v Oracle case has allowed companies to exchanged used licences since 2012. Depending on what you have in your portfolio you may be sitting on a pile of gold dust!
2. If there was ever an opportunity to build a business case internally to invest in licence “right-sizing” – it is now. When you have a paradigm shift from an on-premise workforce to remote working, a proper assessment of your new usage requirements is essential. This will ensure you can enter the right agreement at the right level without wasting money or risking future compliance. This is an opportunity for change, an opportunity to get that business case approved by your boss to assess your demand forecast.
3. You are not alone in trying to cut costs and maximise cashflow in a difficult time – vendors are too! Many of them are under significant pressure to close deals in a challenging economy, so it is a good time to buy if you have clear visibility over your requirements and growth forecast, and know where to push in deal negotiations.
FisherITS works with enterprise organisations around the world to ensure that investments made into vendors such as Microsoft, IBM, Oracle and SAP are properly optimised and free of compliance risk.
By planning an organisation’s licensing strategy with confidence, IT and Operations leaders who are responsible for asset management can focus more time on providing the data and insights required by their organisation to drive digital transformation programs and improve business practices across multiple departments. Contact FisherITS to begin your free IT Asset Maturity Assessment.