Do local cloud data centres impact software licensing?
The establishment of local data centres by large global cloud providers has opened up possibilities to many South African businesses. However, moving into the cloud can create some complexities, specifically around software licensing.
As you move into the cloud, the entire licensing model changes from an outright purchase for a fixed period of time to a flexible model or agreement that can be switched on and off as needed. This requires a change in mindset, such as moving from capex to opex, as well as budgeting, and utilising controls to ensure spend is optimised according to actual requirements.
"With traditional licensing, you had to buy infrastructure and then deploy the appropriate software licence to run the solution you required for your business. Migrating to the cloud changes everything. Understanding how your licensing model changes is key, particularly when running a multi-cloud or hybrid cloud environment," says Matthew Poulter, Software Asset Management (SAM) Business Manager at First Technology National.
One of the biggest questions is whether to let existing on-premises licences lapse, and then purchase new licences when moving to the cloud, or whether to convert the existing licences. While many businesses are opting for the former in an effort to save money, this option can actually end up being more costly.
"Software vendors are entirely aware of the fact that the technology world has changed and that the move to the cloud is inevitable. As a result, many of them are actually offering discounts or incentives to customers with active software licence maintenance in place. Depending on the licensing model you already have, there could be cost benefits to renewing or converting your existing licences rather than letting them lapse," explains Jennifer Meggersee, Sales Manager for Software at First Technology National.
The second challenge is to understand which licences should be converted and which should remain unchanged. This requires an environmental assessment to determine what solutions are currently deployed, what licences are already owned, and what your IT roadmap looks like for the future state of your business.
Meggersee adds: "This is why it is important to engage with a partner that specialises in licensing and Software Asset Management (SAM) in order to establish the best options for your business."
Licensing in these scenarios can become complicated. The cloud adds a layer of complexity by providing high levels of flexibility. Preparation and profiling are essential and are therefore crucial before any move to the cloud is contemplated. It is imperative to understand your users and their needs, so that the most appropriate licence can be obtained to meet their requirements at optimal cost.
"Having the correct licence in place is key, otherwise the cost benefit of a cloud migration could become difficult to achieve, and you may run into functionality and compliance challenges to boot. You need to understand what you need, what products are available, and how you will obtain these solutions. There are also often various licensing options, including cloud-specific licences and hybrid solutions. Tracking these various licences can also become complicated," adds Poulter.
Partnering with a licensing and SAM service provider can help simplify the complexity created by multi-cloud and hybrid environments. Your SAM partner can help you understand your environment and the myriad choices available, and work with you to obtain the optimal mix of licensing to meet your needs. They will also help you manage these licences, reining in cost and complexity, and helping you align your basket of services to your IT roadmap.
Living in the era of 'cloud' is an exciting time and the establishment of local data centres will open up a world of possibilities for South African businesses, providing them with access to world-class cloud services. Benefits such as decreased latency, data sovereignty and reduced costs can be realised. Furthermore, cloud is instrumental in the digital migration journey that is enabling local businesses to improve their business models, be disruptive, heighten competitiveness and improve their bottom lines. Software licensing need not hinder this process and the right partner can fast-track businesses to achieve their digitisation goals.