Pressure forces flexible software licences

Companies should take advantage of the economic downturn in the IT industry to 'regain a balance of power' when negotiating with vendors over software licences, according to analyst Butler Group.

A survey conducted by the analyst group has found a shift occurring in the way supplier and customer organisations approach software licensing.

The report suggests that customers are exploiting the financial downturn in the software industry and seeking greater value for money from vendors.

John Holden, research analyst at Butler, told vnunet.com: "Vendors are appreciating that they need to be more flexible with licences. This isn't just talk. They have to offer this to stay competitive."

The increase in the use of Linux and other open source software is also putting pressure on vendors to be more flexible. Butler Group advises companies to evaluate using open source applications as an alternative to more costly licensed software.

"Linux is not a huge worry to Microsoft right now but this could change in the future," said Holden.

"It's a massive job to switch an entire company from a Microsoft OS environment to Linux; companies so far have been reluctant to do this."

Butler Group also recommends the use of software asset management tools to track the number of licences an organisation holds and determine the effectiveness of its software.

Armed with such details, businesses can push for a number of licensing options such as pay-per-use, term licences, shared risk and reward licences, and hosted software services.

"With an increasing focus on compliance, the majority of organisations should implement software asset management. Asset management systems are cheap - some are even free - so there's no excuse," added Holden.

Mark Buckley, licensing marketing manager at Microsoft UK, told vnunet.com: "Microsoft has always had a policy of being flexible on licences, whether it's to purchase them or lease them.

"The uptake of each type varies greatly throughout the world. There are often tax implications when choosing licences."

Buckley added that the rise of open source technology has had little impact on Microsoft's licensing strategy. "Open source obviously appears in multiple guises.

"But when it comes to the operating system, companies realise that Microsoft provides a better platform that is more secure," he said.

Using software asset management is essential to "understand what you have purchased and what value you're getting from it", he added.