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The future of network licensing is Opex

Network licensing is shifting from Capex models to Opex, largely due to SDN and cloud networking evolution. Here are best practices network teams can use to plan for the future.

The last decade saw a shift to subscription-based pricing and cloud computing, trends that transformed OS and application licensing. Network licensing is next, fueled largely by software-defined networking.

What is the future of network licensing, and how can organizations position themselves for success? The first part of this series covered legacy licensing and the rise of subscription licensing. In this article, examine deployment options, planning and steps network administrators can take as they face the technical and financial evolution of network licensing.

Increased capabilities and options

Traditional physical on-premises networks offer limited flexibility by current standards. Cloud-based virtualization of network components gives network designers more options to meet organizational performance and security needs.

One tactic is a virtual private cloud. A VPC is a pool of resources that includes consumable services, such as databases, web applications and data storage, along with the virtualized network components required to manage those resources.

VPCs enable cloud administrators to construct virtual firewalls, load balancers, virtual LANs, network devices and other related features, all within a cost-effective infrastructure that manages services, data and user access efficiently.

Current cloud networking features enable administrators to configure a hybrid approach that integrates with the on-premises network, with the two following concerns:

  1. Consumer concern. How to centrally manage and secure on-premises and cloud-based integrated network infrastructures.
  2. Network device vendor concern. How to license network hardware components deployed in a scalable hybrid infrastructure that relies on software-defined networking (SDN).

Many vendors are exploring subscription licensing for control plane applications. To that end, organizations must seek ways to most benefit from the network technology they are licensing, particularly policy-based management. In other words, plan to maximize the software they're licensing.

Plan for success

Planning for the future of network licensing changes means more than preparing for the shift from Capex to Opex at budget time. It means paying attention to all aspects of network management, such as the following:

  • Basing hardware purchases on SDN options.
  • Investing in network administrator and architect skills to ensure ability.
  • Making financial preparations centered on subscription-based payments that might vary by consumer demand.

In addition, the organization must determine the best ways to integrate its on-premises networking with cloud-based network resources, especially as VPC and other options make cloud management more complex.

Key elements to prepare for

What practices can organizations follow to prepare for this licensing change? Here are three tips to make sure network administrators reap the benefits and manage the costs of subscription licensing.

1. Understand control-data plane decoupling

Assess how the organization will decouple the control and data planes as part of SDN and subscription licensing. Pay close attention to technical aspects when choosing the necessary hardware and management vendors.

Consider the following factors:

  • How the licensing model scales with changes to network demand and utilization.
  • The model's flexibility when dealing with myriad virtual network devices.
  • How the model covers hybrid on-premises and cloud architectures.

Auditing and tracking are essential aspects of this decoupling.

2. Understand virtualization of network functionality

Learn how the organization will take advantage of network functions virtualization, such as the integration of virtualized load balancing, switching, routing and other capabilities. This also includes cloud networking and any integration with on-premises networking.

Planning for this integration and establishing best practices enable administrators to understand the potential scope of subscription licensing within their network infrastructure.

3. Recognize the shift from perpetual per-device licensing to subscription licensing

Review and modify the IT budget to reflect the shift in network financial management from Capex to Opex. Where a Capex approach might call for replacing network hardware or software on a regular schedule, Opex reflects monthly billing cycles based on current SDN utilization.

Depending on the industry, this utilization might fluctuate significantly throughout the year. For example, the retail industry tends to balloon around major holidays. Plan to track how the accounting aspects of network management will shift, including assessing whether blockchain has a place in monitoring compliance with licensing requirements. Blockchain license management might offer a broader approach than simply governing the network licensing.

Organizations must learn how to properly manage the costs of subscription-based network licensing. As with most things, the key is to plan for the future.

Address the changes

Once administrators are comfortable with the changes associated with subscription licensing, it's time to consider current and future network requirements before they address financial implications.

Establish a baseline and future direction

Assess the current environment. What devices exist? Do they support SDN? How does the current network topology support the organization? Don't forget to audit any existing cloud network infrastructure. Be prepared to redesign the network if it was created ad hoc because of the organization's cloud migration. Use cloud network best practices as a guide.

Next, plan for where the organization wants to go. What's the wish list for a hybrid network approach? What new applications and services are on the horizon that might affect a mixed on-premises and cloud network? Does the organization need to address existing security concerns? It's critical to understand where the organization is and where it wants to go.

Move to Opex

Recognize how subscription licensing changes the financial process, and prepare the appropriate accounts payable team.

Network management software is changing, thanks to the industry's embrace of virtualized networking and the continued integration of on-premises and cloud-based network functionality. Network licensing is a critical part of this evolution. It permits vendors to price their software using the same metrics, such as self-service, elasticity and measured services, as cloud providers. In some cases, blockchain plays a role in ensuring compliance.

This evolution in the future of network licensing requires network architects and administrators to reconsider how they buy hardware. Devices might become simpler and offer only data plane functionality. Subscription-licensed network management software will provide control plane capabilities.

Organizations must learn how to properly manage the costs of subscription-based network licensing. As with most things, the key is to plan for the future.

Damon Garn owns Cogspinner Coaction and provides freelance IT writing and editing services. He has written multiple CompTIA study guides, including the Linux+, Cloud Essentials+ and Server+ guides, and contributes extensively to TechTarget Editorial and CompTIA Blogs.

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