September 07, 2011, 3:32 PM — Cloud computing and virtualization are supposed to save a lot of money for large companies, but they could add a big multiplier to the painful little bump of cost many IT shops have to swallow toward the end of the fiscal years. The combination of virtualization, sprawl and lax license counts can hide a lot more waste in license costs than was possible with traditional systems.
For big companies, the end-of-year true-up of licensing costs is an annual ordeal, according to Chris Holland, VP of Cloud Services at security company SafeNet, as quoted in CIOUpdate.
That's when IT execs have to go through departmental staff lists, implementation records, asset-management records and whatever other imprecise mechanisms they have to count the number of end users they have and how many licenses for what types of technology they're using.
License costs, except for the unlimited, high-cost Enterprise eat-all-you-want variety, are hard to figure at the beginning of the year, expensive to resolve only at the end of the year, and too much of a pain for most companies to do quarterly.
Most companies start by assuming everyone who has something needs it and will continue to need it next year. They also assume headcount has stayed approximately the same in each department this year and will next year too.
Neither is a safe assumption. The economy makes headcount-prediction tricky, at best. Changes in seniority, workflow and differences in the technical proficiency of individual workers makes predicting who will actually need a license for a particular application tricky as well.
In some departments, everyone with a title below a certain level needs access to a data-entry, sales or other application that automates the department's primary function.
In others only the most tech-savvy half of the group will use the app at all. The department might also be split into those who do the number crunching and those who digest it into something else, in which case each half would need a different set of apps.
Virtualization and cloud computing makes the confusion worse.
Because it's easy to spin up another virtual machine when some department's work spikes and it needs and extra server, extras that are often forgotten about when the spike is over, there are a lot of zombie servers out there, eating up hardware resources and licenses for software no one is using.
Apps running in virtual machines are easier to track than those running in the cloud, if only because virtual infrastructures are almost entirely internal; the cloud is often external. It's harder to run asset-management apps on VMs owned by another department on an IAAS IT may have hired, but didn't negotiate specific permissions for asset- and license management.