Licensing Woes of Proprietary Software

Everybody has probably at one time had to deal with licenses for proprietary software. We all know they can be a huge headache. This is compounded in the corporate world where we have hundreds or thousands of computers (seats). Tracking licenses for proprietary software has become a full time job. Companies literally need to dedicate a specific team of employees at keeping track of software licenses.

Many licensing programs are very complex, even to this day. Microsoft is notorious for its complex licensing schemes. First off, there are several tiers to Microsoft Licensing: Open License, Select License, Enterprise Agreement, and Enterprise Subscription Agreement. In order to stay legal, companies big or small need to first figure out the licensing scheme that best fits them, which can take hours and research and number crunching. It has repeatedly been published that Microsoft continues to keep its licensing schemes complex so that customers will end up overpaying. This could hold true, as year after year, Microsoft continues to come up with new licensing schemes but in the end the entire picture never gets any simpler.

Companies are constantly growing and changing. Unfortunately, this means that the licensing also needs to be continuously adjusted. Not only do the licenses need to be tracked, but everything must be carefully recorded and updated. With thousands of software titles and computers, this can easily and quickly get very messy. Thousands of dollars of resources can be thrown at software licensing, when those valuable dollars should be put towards other important things like promoting the company itself, not maintaining it.

So, now that we've acknowledged the pains and huge costs of software licenses, let's step back and think about one thing. Open source software is completely free from these types of problems. Companies and individuals continue to use proprietary software and end up overpaying for software. What many don't realize is that there is a huge array of open source applications available that are just as good if not better than the proprietary applications that they use. And, best of all, open source software does not need any sort of license tracking whatsoever. This hidden cost savings can be huge for any company. It can mean the difference of going bankrupt as opposed to staying in business.

Don't get me wrong, migrating away from any proprietary application can be very time consuming and costly. However, in the big picture, migrating to open source software will save in the long run. The migration is a one-time move, after that move is done no more upgrades and licenses need to be purchased ever again. There are also many many other bonuses to using open source software that will add up over time. Open source software is free as in freedom, and is developed by the community, not a single entity behind closed doors.

For all of these reasons and more, companies should consider open source software into its business plans to ensure future growth and stability.

Talkback

That's a good point about OVER paying for licensing. Some of the open and enterprise licensing isn't as cheap as it first looks. And if you read the agreements closely, some of those prohibit the use of the software after the subscription time if not renewed. Not a lot of people know that.

I hate that big companies like MS appear to be the law-makers. For instance, the idea that you can pay for legitimate licensing but if you rent out time say if you own an Internet cafe, we're told that we now need to pay a second license. The media reports when that came out read like it was a change in the law, but really it's just MS finding a way to charge twice.
Fat Pop Do Wop 21 January, 2010 09:00 Reply

Hi and thanks for writing. That's a great point about Microsoft continually trying to find ways to make customers pay multiple times for the very same software! I am still astonished that Microsoft customers continue to take this beating. I think many do not know that there are alternatives to Microsoft, or they just don't have the resources to try and migrate away to something else. I've seen so many scenarios where companies are put into financial stress because of the extreme costs of using proprietary software. When if they were using open source they would not have such high costs and would probably have been in much better financial health.

But as to your point, I've even seen instances too where companies have purchased the Enterprise Agreement for hundreds of thousands of dollars, yet Microsoft still nickels and dimes them to death. The Enterprise Agreement allows a company to run a huge list of Microsoft products, yet Microsoft double charges them even more. For example, for a company that purchases the Enterprise Agreement, they would have to purchase PCs with Windows Vista Business Edition in order to use Windows Vista Enterprise that is included with the Enterprise Agreement! I haven't checked to see about Windows 7. This is just plain bad business. When the customer purchases the Enterprise Agreement, they should be allowed to use what comes with it, without further stipulations, especially when you see the amount they are paying to Microsoft. In this case they should be allowed to purchase bare metal computers (or with Vista Home) and install Vista Enterprise.
apexwm 21 January, 2010 13:40