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All About Software Entitlements?

Asset management is a very important process that is used in almost every small and large organization. There are many small things inside it, there are concepts that are very important to understand, so in today’s article we will discuss one such concept, which is software entitlements.

What Is the meaning of software entitlements?

Software entitlements refer to the rights or privileges that a user or organization has acquired through the purchase or licensing of software. In essence, it specifies what a user or organization is allowed to do with a software product.

For example, a software entitlement could detail:

  • How many devices or users can access the software.
  • The duration for which the software can be used (e.g., a one-year license vs. a perpetual license).
  • Any restrictions on software usage, like geographical restrictions or specific use-case limitations.
  • Upgrade or support rights associated with the software.

Managing software entitlements effectively is essential for organizations to ensure they are compliant with software licensing agreements, avoid penalties or legal issues, and optimize their software spend.

Example of software entitlements?

Let’s consider a software product like Microsoft Office 365.

Software Entitlement Example: Microsoft Office 365 Business Premium

When a company purchases a subscription for Microsoft Office 365 Business Premium for its employees, its software entitlement might include the following details:

  1. Number of Licenses: 100 (This means up to 100 users in the company can use Office 365 Business Premium.)
  2. Duration: 1 year (The software can be used for one year from the date of purchase.)
  3. Software Components: Access to Word, Excel, PowerPoint, Outlook, OneDrive, SharePoint, and Microsoft Teams.
  4. Usage Restrictions: For business use only, not for resale.
  5. Cloud Storage: Each user gets 1 TB of OneDrive storage.
  6. Support: 24/7 phone and online support are included.
  7. Updates: Continuous updates and upgrades are included as long as the subscription is active.

If the company tries to use Office 365 Business Premium for more than 100 users without purchasing additional licenses, it would be violating its software entitlements. Similarly, if they continue using the software after the one-year duration without renewing, they’d be in violation. Understanding and managing these entitlements helps the company remain compliant with software licensing terms.

List of compliances in software entitlements?

Managing software entitlements is critical for organizations to ensure they are compliant with licensing agreements. Non-compliance can lead to legal issues, financial penalties, and damage to the organization’s reputation.

Here are some common compliance issues organizations may face while managing software entitlements:

  1. Over-Deployment is the act of installing software on more computers or allowing more users to access it than the license allows.
  2. Under-Deployment: When organizations under-utilize the software they’ve purchased, they waste financial resources. While this isn’t a compliance violation in the traditional sense, it’s a failure to achieve maximum ROI.
  3. License Expiration: Using software after its license has expired can lead to compliance issues.
  4. Geographical Restrictions: Some software licenses have restrictions on where they can be used. Using the software outside these regions violates the license agreement.
  5. Version Non-compliance: Organizations might use a version of the software that they aren’t entitled to, often happening when they don’t have rights to upgrades but install them anyway.
  6. Type of License Violation: This can happen if, for example, an organization uses an academic or non-profit license in a commercial setting.
  7. Virtualization Issues: Virtual environments can complicate software licensing. Without proper management, it’s easy to violate license terms in virtualized settings.
  8. Usage Restrictions: Some licenses restrict how the software can be used, such as not allowing commercial usage or restricting the software to a specific use case.
  9. Failure to Understand License Metrics: Different software products might have different metrics, such as licenses per core, per user, per device, etc. Misunderstanding or misapplying these can lead to non-compliance.
  10. Insufficient Documentation: Failure to maintain proper records of software purchases, entitlements, and deployments can make it difficult to prove compliance during audits.
  11. Non-compliance of Open Source Licenses: Using open-source software without adhering to its licensing conditions, such as the GPL, can lead to compliance issues.
  12. Cloud and SaaS Complications: As organizations adopt cloud and SaaS solutions, they need to be aware of the new licensing models and ensure they remain compliant.
  13. Third-party Embedded Software: Software solutions might have third-party components embedded within them, each with its own licensing requirements.

Organizations can address these challenges by implementing a robust IT Asset Management (ITAM) and Software Asset Management (SAM) system, regularly reviewing software usage against entitlements, and conducting periodic internal audits. Using tools that automatically track and manage software licenses can also help maintain compliance.

What are the major problems in managing software entitlements?

Managing software entitlements can be a challenging endeavor for organizations, especially as they scale and diversify their software portfolios. Here are some major problems faced by organizations in managing software entitlements:

  1. Complex Licensing Models: Software vendors may use a variety of licensing models such as per-user, per-device, per-core, or concurrent user licenses. Understanding and managing these different models can be complicated.
  2. Decentralized Purchases: Different departments or teams within an organization might purchase software independently. This decentralization can make it difficult to track and manage all entitlements centrally.
  3. Version Control: Managing different versions of software and their respective entitlements can be challenging, especially when some versions come with different licensing terms or features.
  4. Geographical Restrictions: Some software licenses may have geographical restrictions, making it complex for multinational companies to ensure compliance across different regions.
  5. Cloud and Virtualization: As organizations move to the cloud and adopt virtualization, ensuring that software used in these environments adheres to entitlements becomes more complex.
  6. Over-licensing: Organizations might purchase more licenses than required, leading to wastage of resources. This often happens due to a lack of visibility into actual usage.
  7. Under-licensing: Conversely, organizations might not have enough licenses to cover their usage, leading to non-compliance risks.
  8. Lack of Automated Tools: Without automated software asset management (SAM) tools, tracking and managing software entitlements across a large organization can be near-impossible.
  9. Mergers and Acquisitions: When companies merge or are acquired, consolidating and managing software entitlements from different entities can be challenging.
  10. Open Source Software: Open source software comes with its own set of licenses and compliance requirements. Ensuring that open source is used in compliance with its licenses can be a separate challenge.
  11. Vendor Audits: Vendors might periodically audit customers to ensure compliance. Being unprepared for these audits can lead to fines and penalties.
  12. Expiration and Renewals: Tracking expiration dates and ensuring timely renewals for time-limited licenses can be problematic, especially without automated reminders.
  13. Changing Licensing Terms: Vendors might change the terms of licensing, and staying updated with these changes while ensuring compliance can be a challenge.
  14. Documentation: Maintaining comprehensive and up-to-date documentation of all software entitlements is a tedious task, but it’s crucial for audits and internal management.

Addressing these challenges often requires a combination of strategies, including investing in SAM tools, setting up centralized procurement processes, and regularly conducting internal audits and reviews.

How does ServiceNow Asset Management manage Software Entitlements?

ServiceNow’s IT Asset Management (ITAM) suite offers robust capabilities for managing software assets throughout their lifecycle, including software entitlements. Here’s how ServiceNow manages software entitlements:

  1. Discovery: Using its Discovery tool, ServiceNow can automatically identify software installed across the organization’s infrastructure. This includes servers, workstations, virtual environments, and more.
  2. Software Library: ServiceNow maintains a centralized software library that lists all the software titles recognized by the system. This library helps standardize software names, which is particularly important for ensuring that different versions or editions of software are appropriately tracked.
  3. License Workbench: This is a central interface where IT administrators can view and manage all software licenses. It provides insights into compliance positions, allocations, and reconciliation.
  4. Entitlement Import: Users can import software entitlements into ServiceNow, either manually or by integrating with other systems. This includes details like license type, quantity, start and end dates, and any other associated terms and conditions.
  5. Reconciliation: One of the key features of ServiceNow’s ITAM is its ability to reconcile software installations with entitlements. It matches the discovered installations against the licenses owned by the organization. If there’s a mismatch (like more installations than licenses), it flags the discrepancy, allowing organizations to address potential compliance issues.
  6. Allocation & Consumption: ServiceNow tracks which licenses are allocated to which users or devices and how they are consumed. This is particularly helpful for licenses that are user-based or device-based.
  7. Software Models: These define the rules and metrics for a software license. For example, a software model could define whether a software is licensed per user, per device, per core, etc.
  8. Renewal Management: ServiceNow provides notifications and workflows to manage license renewals, ensuring that organizations don’t unintentionally fall out of compliance due to expired licenses.
  9. Audit & Compliance Reporting: ServiceNow allows for generating detailed reports on software license compliance. These reports can be essential during vendor audits or for internal governance.
  10. Integration with Other Modules: The software asset management capabilities of ServiceNow are closely integrated with other modules, like the Configuration Management Database (CMDB). This ensures that software entitlements are aligned with the broader IT landscape of the organization.
  11. Normalization: ServiceNow normalizes software data, ensuring consistency in naming and versions, which simplifies the process of matching software entitlements with installations.
  12. Cloud & SaaS License Management: ServiceNow also offers capabilities to manage licenses for cloud resources and Software as a Service (SaaS) applications, reflecting the evolving nature of software consumption.

In summary, ServiceNow ITAM provides a comprehensive suite of tools and workflows to manage software entitlements efficiently and ensure license compliance across the organization. Proper implementation and regular upkeep are crucial to harness the full potential of the platform.

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