SOFTWARE LICENSING

How Cloud Computing Can Improve Software Licensing

By Steve Anderson, Contributing TMCnet Writer

Software licensing issues have proven to be a major problem for companies in the past. Either companies buy a number of licenses that end up going to waste, trading cash now for flexibility later, or companies buy too few licenses to meet the conditions on the ground, resulting in extra expenses later when a true-up comes around. But cloud computing may well be out to fix that problem for businesses by providing a layer of flexibility that could only be had previously by overbuying licenses.

Cloud computing has been gaining ground on a lot of fronts over the course of the last few years. With good reason, too; it's been providing a lot of new opportunities for remote storage, remote processing, and even some software applications are available on a cloud basis. It's that last that has the attention of an increasing number of companies, as cloud computing has the potential to answer a lot of the software licensing problem.

What cloud computing can do is, essentially, change the way businesses think about licensing software. Instead of getting it on a per-user basis, companies would get access to the needed software on a subscription basis. Companies would subscribe--monthly, quarterly, annually...the term doesn't matter so much as the act itself--to a plan that allows them access to the software they need, and when the subscription has expired, they can resubscribe at a time in which they need access to the software again.

Not only does this ensure no more surprise bills in a true-up, this also ensures that companies have the access to the software they need when they need it and only in the quantities at which they need it in the first place. No more paying for excessive licenses to ensure no surprise bills in a true-up, either. This is a huge advantage for things like retail businesses, which have clear points on where they need certain software applications, while at other times of the year, they don't need those things at all. So why pay for licenses that will go unused until a certain season?

Better yet, this offers other reductions in cost, like the need to maintain servers for these programs, or for increased staff to ensure that licenses are being correctly managed and applied. Cloud computing for licensed software has a great potential to save businesses plenty of money, and that's the kind of thing that can't go unappreciated in a slow economy.

Software providers may be hesitant to go this route, however, as it removes a critical source of funding from their own operations. But the first businesses to go to a subscription basis will likely find themselves rewarded by the response of businesses eager to get in and save money.

It's a safe bet that subscription-based licensing schemes will start to crop up the farther in we go. A soft economy, the drive to save money and the drive to offer a product or service companies will actually pay for will be too hard to overcome with the urge to maintain the status quo. Licensing by subscription may well start showing up on a variety of fronts, and in rapid fashion.