Software License Management – Everything You Need to Know


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Software license management is currently among the most sought after markets across the globe. Compared to a decade back, this industry has grown exponentially, and is still on the rise. If you have to check the global data, this market recorded a valuation of around $997 million in the year 2021. And this might spike up to $1,723 million by the end of 2022 with a forecasted Compound Annual Growth Rate (CAGR) of 10.07% between 2022-2027.

Add to this, the growing IT infrastructure is yet another reason the software license market is gaining so much potential. Every organization requires software license managers to suggest the best suitable software, manage them, upgrade them, or even to replace them with the new ones. 

In this blog, we will give you deep insights about software license management or software licensing management. The blog will also try to shed some light on different types of licenses, professional license management, and other relevant factors.

Defining Software License Management:

Software infrastructure plays the most pivotal role for every IT organization. Be it managing employees or devices, execution or production, every organization requires a specific set of software. While some of these software comes as an individual, others come in as bundles. Also, there are software that are free to use along with the ones that are paid or require software license managers to use and operate.

Managing the paid software or the professional license management software is a critical process as they come with certain permissions and licenses. And procuring these permissions and licenses require hefty amounts.

Also, since most of the software are entitled to a specific set of permissions, they usually have restrictions on how they would be used by (or within) the organizations. Number of users, duration of usage, organization’s geography, etc., are some of the factors that can be called as the deciding factors or software license managers that allow the organizations to use a certain set of software.

The process of managing all these permissions and restrictions within the organization from just a single console is termed as ‘Software License Management (SLM)’.

In technical terms, software license management can be defined as the legal process that controls or regulates:

  • How to use the software?
  • Who can use the software?
  • When to use the software?
  • Where to use the software?

A typical software license manager tells an organization about how to utilize the maximum out of all their software licenses. The software manager also suggests which license to purchase, when to purchase, and how to stretch its limits so that the organization can use the licenses aptly.

Evolutions of Software License Management:

With the release of a new software, the software vendor publishes a legal document that controls the usage and distribution of that specific software. This legal document can vary according to organization’s size, purpose of use, location of usage, and several other factors. This legal document is known as the ‘Software License’.

Back in the 1980s, software providers started offering ‘floating licenses’ that offered a limited number of licenses among the users. The software license managers had a central license server that allowed licenses to one user at a time upon requests. Once a user finishes using the license, it is given to other users. However, while one user was using the license, other users were not able to use it.

Though the concept of floating licenses allowed users to use the software, it was extremely time consuming as users had to wait till the software became free. Hence, with the growth in market demand or IT infrastructure, floating licenses started becoming obsolete. Moreover, organizations did not find it effective to request or buy multiple licenses based on their requirement. This is where and how the need for centralized licensing management software started growing. 

Organizations started feeling the need for license manager software that would allow multiple users to use one single license without waiting for any approval. Alongside, the software vendors also felt the necessity of an equivalent central system that would allow them to monitor and track the usages of their software.

What are the benefits of Software License Management?

During the release of a software, the publisher releases a pre-defined document or agreement that explains the legal procedures to use the software. This document/agreement largely explains the terms and conditions, limitations (if any), types of usage, and how to distribute the software. Irrespective of the fact whether the software is a paid one or is free to use, it always comes with these legal guidelines which is known as the ‘software license’.

Having a software license management tool enables an organization to understand ins and outs of a software license. Besides this, there are several other reasons for an organization to opt for a professional license management software. Listed below are some of these reasons:

  • Clear View on Software Licenses

Having a software license manager in place gives a better understanding of the licenses purchased. Organizations can easily get a clear view on who is using what across the teams. Considering today’s time when companies are adopting remote working as mainstream, having SLM tools ensures a balanced ecosystem on asset consumption.

  • Process Becomes Cost-Effective

Unnecessary licenses mean unwanted cost. Unwanted cost means lesser ROI. Hence, having a license management software ensures an extremely cost-efficient process for the organization. The license manager software can easily analyze the overall license consumption and figure out if any additional licenses are required. And in case, there are unused licenses, a SLM tool can easily track it out and cut down the IT cost further.

  • Makes Organizations Compliant

Software licenses implies a number of laws, guidelines, and regulations on the overall usage of the software. Having a professional license management software makes an organization compliant towards all these rules and guidelines. This in return, will help the organization to avoid any instances where internal users might install or use any unauthorized software.

  • Enhanced Productivity

As mentioned in the ‘floating license’ concept, waiting for license is a time consuming process. However, if this process can be automated by implementing a professional license management software, users don’t have to wait to use the software. This will surely contribute towards enhanced productivity for the organization.

  • Tighten Security

Cybercrime is one of the hottest threats in the IT world. Using unauthorized software always makes an organization prone to such threats. On the other hand, having an effective license manager software reduces this risk. This will also offer better security to the IT infrastructure and make the organization more secure.

Best Practices for Better Software License Management

  • Purchase Only What You Need

Most of the time, organizations purchase licenses that they hardly put to use. This is a total waste of money and resources. Before purchasing any licenses, organizations must check or consult with a software license manager. This will save a lot of money from the annual IT budget. 

  • Purchase Only When You Need

Purchasing the right thing at the right time gets counted. Purchasing software or obtaining their licenses thinking about the future could cost you a fortune. Technology is evolving extremely fast; today’s software could become obsolete tomorrow. And if this happens with your organization, it would do no good for your organization. Before taking the call, don’t forget to consult with a professional software license manager.

  • Use What You Have Paid For

Being compliant with a license’s terms and conditions is a must practice. If by any means, you or your organization crosses the thin line of compliance, your organization may have to face unwanted consequences. In extreme consequences, the organization may end up paying millions as penalty.

  • Hire OpenLM Services

OpenLM is one of the leading vendors in software license management solutions for engineering and specialty licenses. With 15+ years of market experience, OpenLM has 1000+ global customers. Among this, 400 customers are from the USA, and 10% of this belongs to the ‘Fortune 1000’ club. OpenLM ensures better performance and productivity, makes you scalable while helping your organization to reduce your annual IT spend by at least 15%. 

Get in touch with the expert software license managers of OpenLM to join the league today!

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