Software Tops the List of Top 5 IT Budget Busters

By John Emmitt

A recent article in Computing by John Leonard titled Research: the top five IT budget busters, shows that software licensing is at the top of that list, with 34% of survey respondents saying that it is the top item in terms of IT expenditure. It was followed closely by storage expansion at 33%. But even more importantly, software licensing was way out in front when it came to the question of unexpected costs–”…almost half of the respondents (47 per cent) identified software licensing as a major source of unexpected costs.” The article goes on to say that the root cause for this is undoubtedly the rise in the use of virtualization technologies, particularly server virtualization. Computing’s latest research shows that about half of all physical servers are now virtualized.

Virtualization, and the software licensing rules that go with it, certainly add significant compexity to the process of managing licenses and maintaining software license compliance. And the article rightly states that software audits are on the rise, with vendors targeting these complex datacenter virtual environments. Here is an example of the level of complexity that quickly develops when you have IBM Processor Value Unit (PVU) sub-capacity licensing for applications running in a VMware virtual environment:

IBM PVU Example

In this example, the IBM application is running in a VMware server cluster where applications can be moved from one phyiscal server to another using their vMotion technology.  Dynamic Resource Scheduler (DRS) host affinity rules can also come into play; these rules specify the servers in the cluster where the virtual machine may be moved. With IBM PVU licenses, organizations must calculate the ‘high water mark’– the worst case scenario for number of required PVU licenses for servers in the cluster where the application can be run.

A second example that is described in this earlier blog series involves Oracle database licensing in virtual environments. In the VMware case, you must typically license the full capacity of the server or server cluster, since Oracle doesn’t provide sub-capacity licensing for soft partitioning technologies.

Another recent article illustrates that increases in software pricing are a major factor when it comes to software topping the list of IT expenses. And Gartner projected that software spend would grow by more than 6% in 2013, compared to overall IT budget growth of about 2%:

Gartner Software Spend Growth Table 2013

All of this points to the need for enterprises to have a mature software asset management (SAM) and Software License Optimization program to maintain license compliance and control software costs. To learn more, please view our on-demand webinar series: Software License Optimization 4-part Webinar Series.




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