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Some ISVs' virtualization licensing terms a moving target

When it comes to virtualization licensing terms, what is it going to take for some independent software vendors (ISVs) to stop dragging their feet?

When I asked IT executives at the recent Gartner Catalyst conference in San Diego about the biggest challenges of desktop virtualization deployments, most of them said that dealing with “some” ISVs remains a real pain.

In fact, some IT executives are removing some ISVs’ software applications from their desktop and application virtualization plans because they fear the ISVs will change licensing terms.

As one executive put it, “It’s not so much a challenge to get them to understand what we’re doing; it’s that their licensing is a moving target.” As more businesses adopt a virtualization model (which removes reliance on a given piece of hardware and allows multiple users to access the same software), some ISVs apparently view the trend as a threat to profits. “So, what might be OK today, six months later or a year, [the ISV] may say it’s changing our terms,” this executive said.

Some ISVs just don’t want to acknowledge that their customers are moving to a multi-tenant computing environment, but this lack of acknowledgement could lose them a lot of customers. Of course, not all ISVs fit this bill. For the most part, ISVs are working hard to accommodate virtualized applications and desktops, IT executives say.

This isn’t the first time we’ve written about the virtualization licensing-terms dilemma, and given the attitude of some ISVs, it likely won’t be the last. To recap some of the advice from one of those virtualization licensing stories, here are two tips on negotiating licensing terms, courtesy of licensing expert Paul DeGroot, formerly with research firm Directions on Microsoft:

Negotiate software licenses based on named users. The cost of licensing software in a virtual environment based on processors can add up fast. Data volume for many businesses is going up, and in turn, the number of processors they need to license is rising too, while the number of users is remaining the same or even decreasing.

Look to retrofit existing software licensing terms for a virtual environment. Some vendors offer amendments to existing licensing agreements to account for running software on a virtual machine. IBM has a Sub-capacity licensing program in which customers can sign a contractual amendment that accounts for server licenses on a concurrent basis rather than on a named basis.

Let us know what you think of this blog post; email Christina Torode, News Director.

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