Complete guide to software license management & SLM tools

What is software license management?

A software license governs software usage, and how the software provider will be compensated. A typical end-user license agreement (EULA) specifies the number of licenses purchased, how those purchases translate into permitted installations, and what happens if used licenses exceed the purchased amount of licenses. Software license management refers to the processes, tools, and strategies a business uses to control and document software that employees use, and where and how they use it. SLM covers the acquisition, deployment, tracking, and optimization of software licenses to improve compliance and reduce waste and overspending. Software license management is a critical component of software asset management (SAM), which is a component of IT asset management (ITAM). Historically, ITAM discussions focused on physical resources, such as servers and endpoint devices. But these are merely delivery mechanisms for the assets that end users actually use and that run most businesses: software.

What Is the role of a software license manager?

A comprehensive view of software license agreements allows organizations to make informed decisions about software purchases, upgrades, and renewals. A SLM manager helps to prevent legal and compliance risks from unauthorized software usage.

Features of software license management solutions?

SLM includes functions and tasks such as:

• Discovery: Identifying every critical hardware and software asset in the IT estate.

• Inventory: Managing the list of discovered assets to keep it accurate and up to date.

• Configuration management: Documenting and managing the configuration of every critical IT asset.

• Incident management: Lifecycle management of each episode of disruption of asset availability or performance that occurs within the IT estate.

• Problem management: Lifecycle management of identification and resolution of the underlying cause of every incident that affects the IT state.

• Change management: Lifecycle management of every planned and requested change to any part of the IT estate.

• Asset correlation: Logical groupings of IT assets associated with specific functions, departments, or users.

• Relationship mapping: Identifying and maintaining accurate information about the connections that link assets to each other and to specific applications, services, or functions.

• Security: Comprehensive management of all cyber and physical protections implemented across the IT estate, and of identification of and responses to all threats and vulnerabilities.

• Reporting: Consolidation and distillation of IT estate events into clearly understood and actionable reports tailored for requesting constituents, whether regularly scheduled or on-demand.

Types of software licenses

Software licensing has evolved to cover many ways to buy or rent software. The same business may need to manage licenses for software running on individual on-premise servers, software running on one or more public clouds, hybrid software, or commercial elements embedded within custom-built applications. And different types of software are often provided under different types of licenses. The most common commercial software license types are:

• Freeware: Copyrighted software deemed by its developers to be freely available to anyone.

• Open-source software: Underlying source code made available to all interested parties, for documentation or even modification.

• Public domain software: Unburdened by copyright restrictions and may be used, copied, and distributed freely without payment or penalty.

• Shareware: Copyrighted software distributed analogously to public media. The software is initially available at no cost, and users are expected to pay for it or stop using it after a trial period.

Businesses may also manage licenses for mobile applications, subscription-based software-as-a-service (SaaS) products, application programming interfaces (APIs), or components of consulting projects.

Software license management best practices

Here are a few tips for how to improve IT operations management—and get the most out of your software.

Inventory Existing Software

Identifying and documenting all software running in your business, along with the corresponding license information, might be the single largest barrier to effective SLM. You can’t manage software licenses if you don’t have accurate, comprehensive, up-to-date knowledge about all software running at your business.

Clean Up Your Data

Before moving too far down any particular solution path, ensure your current management data is as accurate, complete, consistent, and up-to-date as possible. You may need to reformat legacy data before it can be used by your chosen SLM solutions—and use tools or processes to handle ongoing license governance.

Establish a Plan

Create a SLM plan that matches your business’ IT goals and digital transformation roadmap. And ensure that the plan reflects input from key business leaders and other stakeholders.

Automate License Tracking and Reporting

Automation can significantly aid discovery, mapping, inventoring, and reporting—all critical tasks for effective SLM. Automated solutions can also help IT prevent the installation of prohibited or rogue software.

Integrate Across IT

Integrate SLM with other IT management functions, including ITSM and ITAM. Avoid acquiring or deploying multiple tools to perform tasks for which you already have available features or solutions.

Partner Strategically

Select solution and service providers that are committed to your business’ success, with SLM and beyond. Ensure that those providers have the strength and relevant experience to deliver on the commitments they make to your business, now and in the future.

Benefits of software license management

SLM helps to protect your business—and your bottom line—against rising software costs. Effective SLM delivers many benefits to IT and the entire business including:

Cost Savings and Procurement Management

Identify and eliminate overprovisioning, or licenses purchased to guarantee availability that go unused. SLM helps to keep the number of paid licenses closely aligned with the amount that the business actually needs.

Compliance and Audit Protection

Variances between contractual terms and actual software usage metrics almost always result in over-budget costs, fines, or both for the business being audited. SLM is the first and best line of defense against software audits and other costly challenges to license compliance.

Cybersecurity

Rogue software and older software versions with out-of-date security features provide ready entry points for ransomware and other malware. Effective SLM can improve cybersecurity by identifying, reducing, or even eliminating unauthorized and under-protected software from your IT environment.

Agility

SLM can help your business identify and retire older software versions, and focus its IT resources on current editions.

Risks of poor license management

Ineffective SLM opens organizations to a slew of operational and financial risks:

• Compliance risks: These stem from using software in a way that violates terms and conditions, or without the proper licenses.

• Reputational risks: Non-compliance can cause negative PR issues with the public and affect relationships with customers, employees, and vendors.

• Financial risks: Poor license management can lead to unexpected costs that result from licensing audits, financial or legal penalties for non-compliance, and overspending for licenses that aren’t needed or used.

• Security risks: Outdated or unsupported software instances open the door to breaches and other security vulnerabilities.

• Operational risks: Insufficient license tracking can impact operational and employee productivity through failures of old software, or software instance downtime.

Why is it important to achieve software license compliance?

Responsible software license compliance management helps to mitigate risks, improve business operations and efficiency, track software pricing, and protect businesses from security vulnerabilities. Software license compliance also helps to ensure that businesses meet legal obligations to software vendors, while also optimizing license usage.

Effective software license management is a critical component of any well-functioning, compliant IT operation. And the continued rise of software adoption dn application sprawl within businesses means that SLM is poised to remain important for years to come.

Summary

Software license management tools play a vital role for businesses today. Effective SLM solutions maximize the business value of IT, reduce costs, mitigate risks, and improve agility and cybersecurity performance. Software license management solutions also enable businesses to quickly—and securely—adopt new technologies and opportunities. Freshworks believes businesses like yours deserve better software. Software that’s ready to go, easy to set up and use, and requires minimal customization. All of our products live up to this promise and are backed by our world-class support. And the best part is, you don’t have to break the bank to get them working.

Freshworks’ Freshservice product helps companies around the world transform how they manage and support their IT environments and end users. Freshservice delivers comprehensive, yet easy-to-use ITSM, including asset, incident, and release management features and a flexible service catalog. Freshservice also includes integrated software asset management (SAM) features that can help improve your software license management efforts.