Apart from the relief that, for most companies and organisations, the millennium came and went without a major disaster, what is there to show for the millions of pounds invested in beating the bug?

For one, IT managers probably have a better understanding now of what they are managing. The Y2K has been a chance to review desktop strategies and regain control of the front line. In some organisations, users have previously been free to load their own applications, a situation made worse by the bottomless supply of software available on the internet. As a result of Y2K efforts, the non-compliant and unused software has been eliminated along with the home-grown applications, games and screen savers. And what has emerged in its place in many organisations is a standard desktop configuration on a corporate or departmental basis.

But knowing what is running on users' desktops has far more value. Companies can get fined and the managing director can go to prison if illegal software is found to be running. However, paying for unused licences is money down the drain. But understanding and managing licensing policies has always been a bit of a mystery, and with the advent of web-based access to applications and new Application Service Providers (ASPs) promising software to rent online, the challenge of managing and maintaining control is even greater.

Safety in numbers
Different companies have different policies on licensing. The safety in numbers approach is to err on over-licensing because the exact number of users is not really known and in an organisation with hundreds or even thousands of seats, finding out software usage on a day-to-day basis has not been possible. Over-licensing may not be an economical way to run an IT budget, but it does keep the 'software police' at bay.

But clearly not all companies share the same philosophy. FAST – The Federation against Software Theft – has recently stepped up its activities and current estimates show that the UK's software piracy rate is approximately 31%. Deliberately or unintentionally, this represents a huge loss of revenue for software vendors. Fast's Digital Crime Unit states that over 30% of cases currently being investigated are internet related. These crimes include illegal software distribution and trade over the net and corporate software misuse. An IT consultant was sentenced to three months' imprisonment for supplying illegal copies of CD-ROMs, while another company was forced to pay £8,000 in compensation and charges to a vendor, as well as having to purchase £12,000 of new software.

Range of tools
So accurate information on hardware and software management has become more important than ever and inevitably there is a range of tools aimed at helping to do the job. The types of software available to monitor IT networks fall broadly into two categories: inventory and metering. The ideal package will include both, be simple to use and have a comprehensive set of reports thrown in.

Inventory software will give you a snapshot of what hardware and software you have and where it is located. But as soon as an inventory is conducted it is immediately out of date. What is more important is the actual usage. A user with a PC packed with applications may not use anything other than the word processor.

To discover usage data, a metering component is required and the combination of inventory and metering means you have a real-time picture of not just who uses each package, but when and how often. This allows IT managers to provide users with the software they need and optimise their licensing agreements. It also allows desktop hardware to be optimised for the required applications and disk space, for example. Not only will money be saved on accurate licensing, but resource allocation will be more efficient and cost effective. With a good metering and inventory solution, IT managers have the tools to keep control of their desktops and licensing agreements.

But just as things were looking up, another problem has arisen – the increasing use of so-called web-enabled software, accessed by users through a standard browser such as Microsoft Internet Explorer or NetScape Navigator. It is forcing vendors and their customers to look again at licensing policies. Web-based licensing has to take into account that a much wider range of users can access applications. This includes mobile and home users, customers who dial in and use applications for ebusiness, as well as local users on the company network and corporate divisions who connect in via the web.

Traditionally, vendors have sold their licences to an office where the number of seats can be physically counted and usage of the software can be monitored. Now, web-enabled applications are driving the trend towards site licensing, where the company makes a one-off payment that allows the whole organisation to use the software concurrently. But vendors and customers still need to agree on the cost of the site license, based on an accurate estimate of software usage. Software vendors will potentially lose revenue on a site license basis, but there will be an increased demand for software services and support.

Emergence of ASPS
One way in which vendors are attempting to deal with the difficulties of licensing is to include metering software within their packages. But that's not all. As we are getting used to the idea of web-based licensing, there is yet another new option starting to gain a lot of media attention. It is predicted that the year 2000 will see the strong emergence of ASPs or Application Service Providers, that rent software over the internet.

The idea is that companies will no longer own their software outright but lease it from an ASP, thus outsourcing all the headaches of licence management, legality, upgrades and support. It is also an opportunity for small to medium sized companies to use costly ERP or MRP applications that have always been aimed at and priced for the large corporates.

As hardware and services outsourcing becomes more popular, it seems a natural progression to outsource software, especially as the move to ebusiness increases. But the ASP model raises further questions, including how it will affect sales of off-the-shelf applications, software distribution, as well as the future pricing and licensing of software? The need to drive down IT costs will force corporations to look at all alternatives.

Microsoft announced that it will be using BT in the UK as its ASP partner. Will traditional licensing disappear altogether? It is very unlikely, and even if ASPs loan or rent all the applications, there will still be a need for accurate software control and accountability so that vendors and customers can ensure charges are correct.

Endorsed products
Among products endorsed by FAST and SPA – its equivalent body in the US – is WRQ's Express Software Manager that includes metering and inventory components. It also has more than 70 reports on every aspect of inventory and software usage, information ranging from a complete company-wide desktop overview to what's running in any one department or machine.

Another feature is an interactive Migration Planner. For example, companies and organisations facing the upgrade to Windows 2000 Professional can check which PCs will accommodate the change from both a hardware and software perspective.

So, IT managers should be able to retain their authority on the desktop. This means more efficiency and cost effectiveness, with the concerns about mismanagement of software licensing a thing of the past.

  • Wick Hill specialise in information access, delivery, management and security solutions.