savemoneyApproximately 40% of money spent on acquiring a basic PC for a law firm is the cost of the operating system and an MS Office license. Add any other software components (and there usually are) and the software costs quickly exceed the hardware costs.

The following tips should be kept in mind to reduce costs and manage licenses:

1.      The maintenance / assurance trap

In order to keep your software up to date, most vendors offer an annual charge whereby you are entitled to the latest version of the software. In the case of Office productivity software, for approximately 50% of the original price, you get 2 years protection BUT if no new version comes out in those 2 years you have wasted money!

Whenever you purchase new software, you need to research the product life cycle and establish at what point you are buying into the software. As an example, lets look at purchasing Microsoft SQL server licenses. We knew the latest version was to be released around October 2008 so if you were purchasing in July, it would have been advisable to purchase the protection. However, if you are now purchasing SQL 2008, it may be prudent not to purchase maintenance because it is unlikely that a new version could be expected within 2 years. History shows new versions of SQL were released in 2008, 2005, 2000 and 1998 so it is unlikely that a new version is in the 2 year window.

2.      License types

When you buy a new PC, you may have an option to purchase Microsoft Office on a DSP “Delivery Service Partner” license. Essentially, this type of license is significantly cheaper than a standard license, but it is restricted for use on that PC only. Dispose of the PC and you dispose of your license as well. Your organisation’s buying strategy may assist is making the decision. If you purchase through a rental system, you are likely to replace your hardware before you upgrade versions. In this case it will be more cost effective to purchase a standard license that can be re-loaded on a new PC.

Remember too, that volume license pricing can start for as little as 5 copies of the software for Microsoft products, so it is important that your sales representative be up to date on all the license permutations. If you are a medium to large company, it may be beneficial to pay an expert to validate your license compliance. Licensing rules and the number of employees do change and lack of vigilance on your part may prove expensive in that you may not be benefiting from better pricing, or end up paying compliance fines.

3.      License asset register

IT Staff come and go and the enormous sums of money that software costs means that at minimum, it should be in a nominated employees job description that he/she is responsible to maintain the software asset register. Once a person is appointed for this responsibility, all software purchases should be routed through this person to maintain currency of the software licenses.

4.      Backward license compatibility

When purchasing software, in most cases the EULA has allowances for running earlier versions. This allows you for example to purchase Office 2007 licenses, but run Office 2003, with the advantage, that at some point in time, when your organisation moves to the newer version of Office, fewer licenses will be required. 

Submitted by:

Carlo Pagani
Co-Operative Computing
Tel +27 11 886 9870



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