Companies tend to forget that compliance is the foundation for working with Oracle and it is also the base for creating cost efficiencies. It’s understandable as IT folks are more focused on how Oracle’s app will solve a problem for them. If nothing else keep in mind the following:

1. Never assume a license usage right. In fact, assume that you don’t have the right to use the license and verify.

Whether you’re using an automated SAM or an Oracle compliance package - such as ManageSoft’s Enterprise Compliance Manager - the ultimate goal should be compliance. It can’t be stressed enough, if you aren’t in compliance with Oracle’s licensing rules, then all else is faulty.  Compliance inoculates an organization from unnecessary and unwanted fines during a vendor audit.

Microsoft Volume Licensing models address organizations in two main categories based on size: organizations with more than 5 but less than 250 computers and organizations with more than 250 computers.

If your company is part of the SMB (small to mid-size business), defined as having less than 250 computers, The MS Open programs offer volume discounts, with little upfront costs. There are two options for Open programs: Open Value and Open License.

If you’re a large enterprise with more than 250 computers, there are four licensing models that will apply to you: Enterprise Agreement, Enterprise Subscription Agreement, Select Plus and Select License.

If you need help sorting through how Microsoft defines certain technical terms within the legal mumble jumbo, Microsoft’s technical jargon by Straightline Technology Group is a great place to start.

Software asset management is a crucial factor in reducing risk, increasing compliance and mitigating liability. CRN’s Matt Fisher really summed up the reason for SAM and why organizations can’t afford to ignore it last month in his Software licensing simplified article.

There are 8 deadly and costly mistakes made when dealing with Oracle, which can be prevented simply with a well-run SAM program:

1.  Not keeping original paperwork or receipts.

2.  Not taking alternative, web-based access to Oracle apps into account. For whatever reason, this happens often.

3. Ignoring apps on non-production or temp servers.

4. Producing additional Oracle apps without an enterprise review. I can’t tell you how many times we’ve found multiple apps in various versions.

5. Neglecting to appoint an SAM manager whom other divisions or regional IT heads report to.

6. Disregarding or not having an SAM procedure.

7. Making changes in Oracle reports and not logging it into the software asset management report.  Once you make changes to Oracle reports, you’re considered out of compliance.

8. Not scheduling an ongoing self audit date. You want to self audit before a vendor audits you.

Once your SAM process is in place, it’s all about maintaining. Remember, software asset management leads to licensing compliance and that’s the foundation for negotiating a better package with software vendors.

Reblog:

Oracle offers 3 licensing models for its installed applications to fit the unique needs of each organization: component pricing, custom applications suite pricing and enterprise pricing. Having different licensing models allow organizations to select the best combination for their operations. Not all products are available within each of the pricing models due to the Terms, Conditions and application features.

Oracle’s component pricing model is an a la carte pricing model that caters to customers with a limited number of users. This pricing model offers two basic licensing options - usage versus user-based licensing metrics.

Oracle’s customer applications suite (CAS) pricing model allows organizations to create custom bundles across all Oracle product lines including Siebel, PeopleSoft and JD Edwards to suit their users’ needs. CAS licensing is for customers standardizing on Oracle. Custom Suite User licenses are strictly defined as an individual authorized to use the application programs - whether (s)he is actually using them or not. There are a number of minimums and restrictions on CAS licensing.

Oracle’s enterprise applications pricing model assumes that Oracle is the standard enterprise software throughout the organization. The EA license model allows companies to license Oracle products for their entire organization without having to worry about keeping track of user licenses. This is, by far, the most costly option and the one with the most variants in its licensing metrics (there are 5 different pricing models with minimums requirements and restrictions on the EA licensing). The common metric is the minimum prerequisite of US$1 million in annual revenues.

The objective of these licensing models is to create a flexible enterprise software solution around an organization’s business, but licensing is rarely cut and dry.

An Open License from Microsoft is a good choice if your company is just starting to work with Microsoft and you only need five licenses.  There is a mandatory two-year commitment, but the flexibility of the “pay as you go” licensing model gives start-ups or emerging companies room to grow without having to overpay for licenses you don’t use, upfront.

Open Volume- provides deeper discounts when purchasing larger amounts of licenses. In order to qualify for volume licensing, you must meet a minimum point purchase level of 500 - which is determined by software product mix and license quality you plan to purchase. An example of what the point value system could be- MS Office Professional is worth 2 points, while Windows server is worth 15 points. For a full list of point values, visit the Product Licensing Web site at http://www.microsoftvolumelicensing.com/userights/.

Microsoft announced plans to release a free, advertising-supported service that would allow users to access versions of its Office applications through a standard web browser. Google offers their own services for $50 per year, as does IBM with their Lotus Symphony.

Corporate customers will have the option of buying the service through a subscription or software licensing plan although pricing has not yet been determined. Caveat - the online versions won’t include all of the features of the traditional software (which almost makes it unreasonable for most companies).

They plan to release the new version in early 2010, along with a new OS to replace the very unpopular Vista.

Microsoft is trying to retain customers that could move over to Google or IBM for cost-savings.   Licensing should be interesting when they do finally monetize (and Microsoft will monetize).

I recently read an article where Symantec claims that Virtualization could end long term software licensing in favor of a pay per use model - which could even be paid per day, hour or even second.

Because usage can be monitored for each instance the software is used you only pay for actual usage. I tend to think that vendors will have a hard time agreeing to this type of licensing agreement as they stand to lose - long-term - in this scenario.

Software licensing models certainly don’t change overnight, look at how long vendors are taking to even minimally adjustments to virtualization - this type of pay per use model is (at the very least) not ready for prime time anytime in the near future.