Buying and maintaining software is not a simple buy-and-use proposition. It requires businesses to carefully monitor existing licenses and software usage, and to negotiate new licenses as usage changes. Any enterprise should be on top of software, who’s using it, and making sure it is consistent with the business, says Scott Rosenberg, CEO of Miro Consulting in Woodbridge.
Software is about copyright and intellectual property, says Rosenberg, and licenses provide a set of rules for protecting these areas.
Think of it this way: You can’t buy six seats for ten people at the movies because the theater sells tickets per-head, not per-occupied seat.
These are the theater’s rules for the intellectual property it is using, a copyrighted movie.
Similarly, most software is sold for use on a per-head basis, not per office.
With software, however, you might be able to negotiate different provisions for a software license. But a business is likely not aware of this possibility unless it puts in place an enterprise software asset management system, or SAM. The term refers to everything covering the processes and the infrastructures required to manage, monitor, and protect software assets over their life cycle.
Rosenberg and other panelists will be exploring these systems in “Managing Your Software Investments — Are You In the Know?” on Thursday, September 24, at 4 p.m. at the EDA Commercialization Center in New Brunswick. Other panelists include Mike Vande Woude, president and CEO of MVW Consulting; Mahesh Muchhala, chairman of DataMotion; and David Leit, of Lowenstein Sandler. Cost: $50. Go to www.njtc.org or call 856-787-9700.
Whether individuals respect copyrights, corporations owe it to software developers to respect their copyrights, observes Rosenberg. “The likes of Microsoft, Oracle, and Adobe have sunk billions of dollars and tens of thousands of man hours in getting those products just so,” he says. “What they demand of us is that we purchase rights to use that software.” And if businesses don’t keep usage in line with the terms and conditions of their software licenses, they risk suits from the software creators.
In an economy in which most people are hired as knowledge workers and given a desktop or a laptop, organizations need to carefully manage their software licensing. “Enterprises like the State of New Jersey or Toys r’ Us need to come to terms with Microsoft, Adobe, and Oracle,” says Rosenberg. “Any enterprise needs to strike an agreement for what privileges it has to roll out this software to their workforce.”
The software companies have the right to audit licensees to ensure that usage follows the terms and conditions, and will hold an enterprise accountable for lapses.
The biggest problem Rosenberg encounters is that licensed copies of software and the numbers of users often do not match. If there are more users than software, the company is liable for suits, and if there is more software than users, the company is losing money. But because software is invisible and can reside in multiple locations — desktop, server, laptop, BlackBerry — it can be hard to keep track of.
Set up a system to manage software requests. When a new employee needs software to get started, reflexively ordering a new copy of Word is not the way to go. Instead a company must put someone in charge of software procurement and develop a process for handling software products throughout their life cycles. The process should begin with evaluations of need and submission of requests, with the goal of a single, consolidated purchase, including negotiation on pricing and value-added services and support. The process should also include compliance certification and validation of product accuracy.
Do a friendly audit. An internal person must be charged with responsibility to supervise the audit. The audit itself might involve a worksheet that requests information about the details of software installed on different servers. This information might derive from ongoing records as well as the results of software that reports how many copies and what versions are being used on a given day.
A company might also need to consult with a licensing expert on complex compliance issues. Once all the information is gathered, the contracts in force with the software company must be examined. Licenses are then compared to usage to determine whether a company is underlicensed or overlicensed.
Negotiate with software providers. If you find yourself with too few users of a product that is licensed for many more, you might be able to mix and trade.
Rosenberg grew up in northeast Pennsylvania and graduated from the University of Pittsburgh in 1985 with a degree in industrial engineering.
In his early jobs he stayed close to his training, doing time studies and work flow analyses, and later production planning. He worked for a watch distribution company in Fort Lee and a decorative ribbon manufacturer in Secaucus. Next he bought packaging and other supplies for a coffee roaster and distributor, and later returned to production planning for a stuffed toy manufacturer in Jersey City.
Rosenberg then went into sales and for a ComputerLand franchise in Iselin, where he stayed for a year. At that job Rosenberg met his current company’s chief information officer, vice president of finance, and his eventual business partner, but he wasn’t ready yet to step out on his own.
For the next year and a half he worked at Corporate Profound, in the search engine sector, but then joined a venture that exposed him to the entrepreneurial skills he would need to start his own business. He helped two former Oracle executives form an information technology consulting company and Oracle reseller named Cintra in New York City.
Rosenberg was a minority partner and spent three years there. “I got to effectively be an entrepreneur in residence,” he says. “I was able to cut my entrepreneurial teeth.” He ran sales, oversaw marketing, and recruited the first 25 techies hired, in essence serving as chief of staff to the managing partner.
Finally he was ready to start his own business, and Miro Consulting is now in its ninth year. The Woodbridge company, which focuses on software asset management and is also an Oracle reseller, now has nearly 25 employees.