We all know how important reporting can be to keeping software asset management in check. Microsoft does provide a Terminal Server License Reporting tool that is available from the Windows Server 2003 Resource Kit. Additionally, Microsoft provides a test tool that will provide the following information about a license:

It’s obvious how important simple tools like this can be.  Although we recommend having an automated repository for software asset management, tools provided by software providers can also be effective to supplement your other tracking tools.

In addition to per user and per device licenses with Windows 2003 Server, there is a third option called External Connector Licenses. Because per user and per device client access licenses (CALs) have to be assigned to a specific user account or device, this sometimes makes it difficult when companies would like to grant access to their servers to partners and/or clients. Whenever systems are extended to unknown users, an External Connector License can be purchased.

These license options are available for all Microsoft products, but one important thing to keep in mind - this isn’t a cost effective way to grant your employees access without accounting for them. Microsoft has very strict guidelines for ECLs and if they are used by employees, you will no longer be in compliance.

We know how important saving money is right now. Here are some more negotiation tips for cost cutting:

Maintenance - many software vendors will charge maintenance from the minute your contract is signed. Do your best to negotiate into the contract that maintenance can’t be charged until your system has gone live - this could save months and even years worth of charges.

Market Yourself - to cut down on costs, agree to endorse your vendor’s product in exchange for free services, or discounted rates. You’re not selling out - you’re saving valuable money!

Take your time - don’t let the vendor rush you, ever. Take your time, get everything in order and make sure you understand every word of your contract before signing.

When is best? - the best time to negotiate is at the end of the vendor’s financial quarter or fiscal year, when salespeople are trying to make their quotas. This can be a huge advantage for you. Don’t wait too late though; a contract can often take up to 90 days to close, so be sure to give yourself enough time to close before time is up.

Organize! - yes, we are a broken record here, but if you don’t keep track of your licensing you are throwing away money! Keep a repository, know what is going on and you won’t be paying for licenses you don’t need and shelf ware that you don’t use.

In addition to server licensers, you can’t forget the processor licenses. Each processor on a server that your software uses requires a separate license. For physical operating systems, each physical processor must be licensed. However, for virtual environments, only virtual processors the software uses must be licensed under Microsoft’s licensing terms and conditions. You do not need CALs or EC licenses because per-processor licensing allows any number of users to access the software from any number of devices. You may run any number of instances in licensed physical or virtual operating system environments.

We have addressed the three types of Windows 2003 Terminal Server licenses - per user, per device and external connector.  Now we need to mention (ah ha! The plot thickens!) that you will also need a standard Windows Server 2003 Client Access License (CAL). In order to legally access a terminal server, each client seat requires: Windows Server 2003 Client Access License and Windows Server 2003 Terminal Server Client Access License.

A Server CAL will provide basic access, including the ability to store files, print and be part of an active directory. The TS CAL grants remote access to users. It’s not as confusing as it seems, but you have to be mindful of terms and conditions for licensing.

We hear about cost-cutting and layoffs now on an hourly basis. Many of our clients are coming to us asking how they can re-negotiate their licensing contracts to cut costs. Since we are sure everyone reading this blog right now is in need of some cost cutting, here are some tips to help you negotiate with your software vendors.

Know your stuff - make sure you know your contracts inside and out, so you know what has been working for you and what hasn’t.

Avoid Buying More Shelfware - be careful not to over-estimate the number of seats you need. If you have laid off some staff members, contact your vendors as ask about “parking” your per seat licenses until the economy improves. It’s typically pretty difficult to decrease seats when re-negotiating, but parking may be a viable option.

Negotiate Hard out of the Gate - the best cost saving opportunities are at the front end of a contract, when the vendor knows it’s still possible for you to walk away. If you are buying 2,000 seats, negotiate the first 1,000; once the contract price has been negotiated, then add the second half at the negotiated price.

Ask for the Sky - The worst they can say is no, right? Vendors are always holding money back so they can work some sort of concession or discount into the deal. Especially during tough times, they will do what they must to get your sale. Ask for as many discounts and concessions as you can think of - they have to at least give you some. These could be anything from financing options to a free year of maintenance.

We are paying for what? - believe it or not, a majority of companies are paying for services and software they don’t even have - check inventory against your monthly and yearly bills to be sure you are actually using everything you are paying for. If not, get rid of it!

Device vs. User Client Access License

With most products, you must acquire a license for each running instance of the server software you run on a server. There are two types of CALs: Device CALs and User CALs.

Device CAL - Licenses a device for use by any user.

User CAL - Licenses one user to use any device.

Note: CALs are version specific. You must have CALs for the same version or later that the server software being accessed. To cut down on the number of users or devices that access software on a server, some organizations implement network architectures, called multiplexing or pooling.

This time the poor saps were XMCO Inc., based in Michigan. They paid out $70,000 in a settlement for unlicensed copies of Adobe, Corel and Microsoft products. On top of the 70K, they agreed to delete all unlicensed copies of software on theircomputers, purchase any licenses necessary to become compliant, and commit to implementing stronger software license management practices.

A more extreme case includes jail time. In Austin, Texas, a 24 year old was sentenced to three years in federal prison, three years of supervised release following jail time and a $10,000 fine for selling pirated software on the internet. In addition to time in federal prison, he lost his Porsche, TV and computer equipment! Between early 2006 and September 2007, he and his partners sold an estimated retail value of $2,500,000 in illegal software.

Don’t mess with the BSA! The BSA has also claimed that they expect more cost cutting due to the economic downturn and are looking at a busy year for vendor audits. Just another reason to get your assets in order and be sure you are in 100% compliance.

You will see that we refer to the ever-changing nature of software licensing. Well, here is an example -Microsoft has made some changes to their licensing terms, with a whole seven days in between. The latest update was released in two documents: “Licensing Windows Server 2008 to Run with Virtualization Technologies” and “Licensing Microsoft Server Products in Virtual Environments.” In addition, their CAL requirement for “indirect access to Windows 2008″ were lifted.

What does this mean? You will only need CALs for Windows guest OSs and the applications that run within them. This was an issue previously impacting Hyper-V customers. If you are using Windows Server 2008 solely as a virtualization host, you will not be required to have a 2008 CAL as you did before. We were pretty surprised that they moved so quickly in response to customer complaints!