In-Depth

Trimming Software Licensing Costs

Sub-capacity monitoring, support for iSeries and zSeries planned for Tivoli License Manager

• By Stephen Swoyer
• 04/15/2003

Dave Ertl, a manager with IBM’s Tivoli Software Group, explains how license management software can save you a lot of money—especially in the midst of a protracted economic downturn.

Ertl says that license management software gives you the hard evidence about software usage that you need when you negotiate new enterprise licensing agreements with your ISVs. In still other cases, he maintains, it can help you to trim costs by eliminating unused or excess licenses.

With the introduction of new capacity management technologies in future versions of IBM’s Tivoli License Manager, Ertl says that Big Blue will deliver a sub-capacity licensing strategy for its mainframe customers as well.

Q. What’s driving the need for license management software such as Tivoli License Manager (TLM) in IT organizations today?

A. The driver of this is coming from the customer side, especially with the economy. Companies are changing their size [and] their employee base. Software has become a more expensive part of the TCO of a system because hardware prices are going down. Suddenly you have all of this really valuable software that you’re paying for, and customers are telling us “I want to know how much of this I am really using.” So now they’re really focusing on making smart software purchases, especially after a few years during the late 1990s when they weren’t making such smart software purchases.

Q. How does license management software such as TLM help them do this?

A. It helps them in a lot of ways. It can help them during [enterprise licensing agreement (ELA)] negotiations [with ISVs]. You’ve got a lot of vendors out there who don’t have close ties with their customers, and they sometimes try to make customers pay them for more software than they use. This is a way for customers to provide some reporting to help [ISVs] understand what they’re using. They can actually show their vendors proof that they’re only using what they pay for, or that they use much less than what they pay for, which gives them extra leverage during ELA negotiations.

Above all else, they don’t want to pay these vendors for licenses that they don’t need. But with the way that things were in the late 1990s, chances are that they purchased a lot of software that they didn’t need and that they’re not using, thinking that they would eventually need it.

Q. You’ve talked about license management primarily in the context of client licenses. Let’s switch gears and talk about environments—such as the mainframe—in which licensing is based on capacity usage. IBM disclosed last year (http://www.esj.com/news/article.asp?EditorialsID=408) that it was going to abandon IBM License Manager (ILM). Is there the possibility that ILM functionality could be incorporated into TLM? Has there been any talk about this?

A. We did put those plans [for ILM] on the shelf. The development work was at some stage of completion, and we’re evaluating it right now to see if we can actually use some of the technology that was developed, so we want to be able to use what we can, but to make sure that whatever we do use doesn’t drive some of the negative connotations that ILM had.

Q. Certain negative connotations did attach themselves to ILM—particularly with respect to confusion about its overall invasiveness—but one of its biggest selling points was that it could pave the way for sub-capacity pricing from mainframe ISVs. In TLM, do you propose to deliver support for sub-capacity pricing to mainframe environments?

A. Tivoli License Manager is going to expand its scope to handle some of the things that ILM was targeted at delivering. The first thing on the list was sub-capacity pricing. Today, there’s the sub-capacity reporting tool, and that’s kind of a short-term approach to collecting sub-capacity information, and enabling the customer to license it at less than full capacity. We’re going to pick up that functionality at some point, so Tivoli License Manager is really the application for any ISV, as well as for IBM’s software.

ILM had a lot of fear or negative connotations with it, and we’re trying to get our arms around exactly why that is, to make sure that we don’t do that with Tivoli License Manager. That’s not the intent with Tivoli License Manager; it’s to provide a tool to customers to help them understand what their software usage is.

Q. Is there any timetable for delivery on this?

A. I can’t really go into that at the moment.

Q. Could you talk a bit about TLM’s platform support? I imagine that it supports Windows platforms, of course, but what about non-IBM RISC/Unix platforms?

A. That’s one place that we’re going to differentiate ourselves from other solutions. If you think about how [customers are] purchasing software from a vendor, it’s not just a Windows issue. If you’re trying to analyze your software usage, you’ve got to know what you’re running. The release [of TLM] that we announced in November has Windows support, AIX, and Solaris. That’s our core focus. We’ll also be extending it to the iSeries and zSeries, so that it can manage those platforms as well, to give the customer a true enterprise view.

Q. How does Tivoli approach application support for TLM? Tivoli Asset Manager, for example, supports the most popular applications in a given category. Is that similar to the approach that TLM’s developers take?

A. It depends on how the software is actually built. We have a technology that from an outside-looking-in approach, from a black box approach, we can understand how that software is being used. As long as something is priced in such a way that something outside the product can understand its usage, we can monitor its usage. If there’s a client running [an application] and your pricing is based on how many clients are running [client-side versions of this application], then we’ll be able to monitor the usage of that pricing model.

Q. What about custom applications, for circumstances in which you might want to monitor their usage for the purposes of charge back?

A. If customers have their own software that they can use in-house, and they want to find out how many users are using it, they can create a custom signature for that software. This lets them actually enforce limits of that software. If they say, "I don’t want more than 100 users using this internally," Tivoli License Manager can enforce that setting. This has a close tie-in for chargeback because it allows you to see where your software is being used.

Q. Does the product actually support chargeback now?

A. Not at the moment, but as we develop those ideas more thoroughly in Tivoli, you’ll probably see a closer tie-in to things like chargeback.

Q. What about monitoring usage for applications that exploit capacity-based pricing in non-IBM environments, such as on the Solaris operating environment?

A. As of now, we haven’t looked into that one, but that’s obviously a situation that we have to look at. Right now, you can install multiple agents on a single machine to track individual users, and in similar ways, we’re experimenting with loading multiple agents across a machine that has multiple partitions—but we don’t have a solution in place.

The idea with this tool is to follow the industry trends and make sure that whatever pricing model is pervasive, that we support it with License Manager. And that is what we are going to do—it just takes time.