Licensing In A Virtualised World Is A Ticking Time Bomb, Report Warns

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Companies may need up to six times as many licences for software on virtual machines and they could be exposed to large fines

Organisations virtualising infrastructure and applications could require up to six times the number of licences than they currently think they need, according to York-based software asset management firm License Dashboard.

The firm said that most application licences are device-based, meaning every instances of software running on each virtual machine (VM) needs a separate licence.

Get with the program

Matt Fisher, director at License Dashboard, said that virtualisation leads organisations to operate many instances of a software program on a single physical machine. However, traditional software licences require the organisation to licence every server separately and that many ISVs define each VM as a notional server.

“While many vendors, including Microsoft, have added user-centric elements to their licensing terms, licensing under virtualisation remains a grey area,” he said. “As a result, licensing each virtual machine separately is often the safest approach to avoid the risk by being non-compliant.”

Firms are at risk in such a situation, the company claimed, particularly if they used dynamic provisioning or had VMware’s Distributed Resources Scheduler (DRS) enabled. This causes confusion about whether software was licenced on a per-device or per-user basis, opening companies up to large non-compliance penalties.

In a straw poll conducted among its customers, License Dashboard found that 97 percent of respondents confirmed they had virtualised their servers, with 58 per cent of those using DRS-type technologies on some, or all, of these virtual servers. It said this suggests UK organisations might have a significant shortfall in their software licensing compliance, making them particularly vulnerable in a software audit.

Fisher believes the problem is even more complicated with DRS as it dynamically allocates IT resources to the highest priority applications. This means that an application has the potential to be used on every virtual machine if the need arises.

“With current device-centric licences this will often require the organisation to licence every application on every virtual machine based on the potential that the application could run on it during peak times, unless significant rules are put in place governing the use and deployment of licences in virtual environments,” he said. “Based on our own analysis of customer’s virtualised environments, DRS has the potential to increase an organisation’s server licensing requirements by up to 500 percent at the flick of a switch.”

Fisher warned that DRS has the “potential to be a ticking time bomb for many organisations, so we urge them to review how their software is deployed in virtualised environments or risk facing significant fines in 2013”.

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