How IT and Volume Licensing Can Work for Your Medium-Sized Business

Editor's Note:
In response to reader interest in licensing questions, Microsoft provided this article to give the company's perspective on volume licensing.

There are more than 1.4 million medium-sized businesses worldwide that spend $113 billion on software and IT services each year, and that number is expected to grow to $152 billion by 2010, according to AMI Partners. Medium-sized businesses are very different from enterprise organizations, yet IT vendors continue to take a one-size-fits-all approach.

Medium-sized companies are sophisticated and complex, but are usually resource and cash constrained, with typically one to five IT professionals on staff. With resources stretched thin, they are prone to putting an IT project together in piecemeal fashion, or leaping into a project without realizing that it is beyond the scope of available resources.

When considering IT investments, these companies are generally looking for strong value in solutions that integrate with existing technologies and scale as the company grows. They also need great software to effectively compete--In fact, to gain an advantage on larger competitors, it's especially important for a medium-sized company to stay ahead of the technology curve.

But the dizzying array of products and promises in the technology market can be daunting for any IT department. The good news is that there are a few basic considerations that can have a significant impact on the overall value of a technology investment. By taking a measured approach--implementing Software Asset Management (SAM), planning a long-term roadmap with the assistance of a local IT expert, and considering the licensing and financing options that will enable a successful deployment with flexibility for growth--the entire organization can quickly realize the benefits of a new IT solution.

Many software vendors have purchasing and licensing programs that make it easy to budget, plan and deploy solutions for medium-sized companies. Here are a few steps for a medium-sized business to consider when looking to gain and keep a competitive IT edge.

A Long-Term IT Strategy
When setting a long-term IT strategy, a midsized business should look at its IT environment holistically. Technology should be seen as a true corporate asset, delivering ongoing business value. The IT infrastructure should empower people to reach customers more effectively, harness critical business insight and collaborate--all in a secure, reliable and controlled environment.

Look for a single console for proactively managing the company's IT environment. The management solution should cover a broad range of tasks and tools and be easy to deploy and maintain. In addition, the software design should be centered on an organizations number one asset, its people. The user experience of the IT solution should be familiar and easy to use, yet remain highly tailored around the requirements for specific roles in the company.

While this may seem like a tall order, it is attainable, and does not require a medium-sized company to purchase an expensive, enterprise level solution. Working with a third party expert to help assess a company's true IT needs and corresponding solution options is among the most consistent factors that contribute to customer satisfaction.

Value-added resellers (VARs), original equipment manufacturers (OEMs) and retailers provide high levels of technical expertise, strategic planning, and practical skill. Their real-world perspective and direct experience addressing business needs means they will be especially effective in helping a medium-sized business to successfully roll out new IT solutions.

Making Licenses Simple
Just as important as what solutions a midsized company buys, is how they buy.

Managing a scalable and reliable network of solutions that breeds end user familiarity and productivity is a long-term investment that requires a simple and flexible licensing program designed to provide companies with the right solutions at the right time. A good licensing program should provide choice, while maintaining simplicity in how the company purchases its IT solutions. Generally speaking, there are three ways to acquire software--Through an original equipment manufacturer (OEM), through full packaged product, or through volume licensing.

Each option has its own benefits, but for organizations purchasing more than five licenses, volume licensing is the most cost-effective choice. In addition to the potential cost savings, volume licensing often provides previous version rights and re-imaging rights for efficient deployment, which are not offered through OEM or full packaged product. It also offers additional benefits such as the option to transfer software between computers, deploy a standard image to new computers, and easily track licenses online. Choosing volume licensing also moves customers away from transactional relationships by establishing a direct relationship with the vendor.

Some companies like Microsoft even offer financing programs, to spread payments out and enhance the customer's ability to plan IT costs year over year. Budgeting is easier with a predictable monthly expense. The big difference, though, is that the company does not have to pay up-front--the technology investment can actually help pay for itself as efficiencies are realized.

Managing Software Assets
Once the technology is in place, it needs to be continually tracked, monitored and evaluated to help ensure that it continues to yield the highest possible return on the investment, much like a product inventory. Good SAM protects an organization's investment in software by helping them recognize what they've got, where it's running, where it can best be utilized, what overlap they may have, and what's needed in terms of licensing documentation.

SAM enables the company to plan for future software needs now, so better business decisions can be made about how, when and how much to invest. Good SAM practices have even been known to save companies from over-investment by identifying future-version rights the company already had. Eliminating overlap and unnecessary licensing purchases saved Lovitt and Touché, a participant in Microsoft's SAM program, $200,000 over a three-year span, for example.

There are four steps that industry partners should go through to help customers develop and implement an effective SAM plan:

  • Perform a software inventory to find out what software assets the company currently has and/or is using.
  • Perform a license reconciliation by locating the license documentation for each software asset in their possession.
  • Review policies and procedures to assure good Software Asset Management techniques.
  • Finally, develop a Software Asset Management plan to use moving forward.

Bringing IT All Together
Today many vendors are coming to market with new, integrated solutions designed to propel medium-sized businesses to greater heights, but many are still approaching midsized businesses with the one-size-fits-all approach of repackaging enterprise solutions for medium-sized businesses. Navigating this landscape requires a strategic approach. The right long-term IT strategy will not only make a company's operations and processes more efficient and secure, it will make its primary resource--people--more productive. To avoid investing in technology for technology's sake, a company must have a solid strategy for how IT can help enable its employees, and it must have a flexible licensing plan to allow software assets to evolve and grow over time along with the company. In addition, effective software asset management can help ensure a continual cycle of renewal for the company's IT environment that helps them stay ahead of the curve--and the competition.

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