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  • Writer's pictureAndrey Khodunov

License Management Lifecycle

Updated: Dec 4, 2023

In these days companies are working toward balancing between efficiency in IT and cost-cutting of any unnecessary expenses. I see that picture all the time and in this article I would like to give you more insight and ideas on how any organisation can decrease software expenses and optimise Software Assets Management processes.


Full lifecycle of software asset management looks as the following:

1. Discovery

2. Measure

3. Interpretation based on vendor rules

4. Optimization

5. Monitoring

The purpose of this article is to get familiar with the important aspect of SAM (Software Asset Management) concept.

At nowadays almost every IT-manager know what the SAM is, but usually she or he thinks that the License Management is something connected to vendor’s license policies, rules, contracts and other aspects. Best case – IT-manager knows the basic as Document Management, Vendor Management, Asset Identification, and others, described in the methodologies, as ITAM ( or ITIL ( The major question comes out from this methodology is – how all of these items aspects can be implemented into the real life? In order to answer this question, we have to consider the set of these aspects as parts of License Management lifecycle, realizing all of the concrete actions from the above-mentioned aspects. Every part of the lifecycle is a license management solution that has to be implemented separately or together at each and every customer, that takes care about the thing that we call “compliance”.

What do we have?

Let us consider tasks that have to be performed by an IT-manager in order to be sure that the company is compliant and there is no unlicensed or over-licensed usage of software. Let us think that the IT-manager performs his or her duties in a big enterprise, where there are multiple vendors solutions being used in premise, cloud, virtual environments and there are many departments, people, branches which can be even territory distributed.

What can we do?

First task of the IT-manager is to understand what software and where it is being used in the company. Let us call this task “discovery”. This task is untypical and requires individual approach. Why? Because in a big enterprise sometimes it is difficult to find who is responsible for each specific solution that is being used in the company. Let us assume that the customer is about 90% aware about the software assets that are being used at the company, then at least 10% require additional investigations. What kind of investigations?

  1. Questionnaires – they can be distributed across the customer’s organisation and users will fill in the forms, providing information of what they are using. Mostly this has to be performed by IT-people, system administrators. Main problem here – how to know what questions in the questionnaire are right? Attention to little things is an important factor here. The questionnaires have to be created and controlled by professionals, this is evident.

  2. Technical tools for discovering – probably every vendor has some recommendations or even tools to run in order to discover the usage. Here the question would be - to discover or to measure? You, as an IT-manager has to deeply understand functionalities of such tools. May be it is wise to build your own strategy of using these tools if you decided to implement them at your company.

  3. Performing investigations based on knowledge of specific software products, checking their install base and configurations in the IT environment. Probably the best solution but it is time consuming and require professional knowledge in the specific products.

For sure, the best approach will be a combination of the methods described above.

Assumed that the first task is finished, the IT-manager comes to the next, second task – we will call it “measure”. The purpose is to define volume of software usage. Every software vendor has its own license metrics – it could be computers, servers, processors, users, power units, on so on, the list is limited only with vendor’s fantasy in potential tariffication. At this stage it is important to understand what exactly in all of the methodologies is called “asset identification”. The IT-manager has to know what will be the asset that is being measured. As, for instance, the company has license to use software on a server with 10 processors and it is not equal 10 cores or 10 computers. Here it is important to have a definition of the metric used in contract. It is also important to know specialties of the environment where the software is being used. For example, processors in physical environment or in virtual environment are different processors!

There are some solutions on the market being offered to customers. IT-manager has to study them in order to understand what are the advantages of every solution, and what are the limitations. And, of course, there is no “ultimate” solution, everything has to be applied in specific environment and interpreted by professionals. Let us list some of the measurement methods:

  1. Again, questionnaires – there are many products that cannot be measured with specific measurement tools. The IT-manager has to gather information about the usage based on information provided by IT- and system administrators or end users.

  2. Specific technical tools, created by vendors and provided mostly “for free” and used by vendors when they want to audit their customers. Pros – vendor trusts the results of the measurements, therefore our IT-manager can also trust them. Cons – only vendor can make interpretation of the measurements results and, for sure, it makes it “to his owns”. These measurement tools can be officially distributed by the vendors, for instance, IBM and its ILMT. There can also be proprietary tools used only for audit purposes, as Oracle does with his LMS Collection Tools.

  3. There are 3rd party measurement tools offered in the market and, sometimes, their results accepted by vendors. Here, our IT-manager has to understand that these tools perform very specific tasks of gathering “usage” information in one part of IT infrastructure, but they do not cover all the lifecycle since their results can’t be interpreted without license management professionals. And further we will understand why it is so. Our IT-manager has to understand as well, that despite of vendors announce acceptance of the results, they always keep their right to oblige to run their own measurement tools.

Again, the best way to perform the measurement task is to apply all the methods mentioned above.

And now, we are ready to move to the third task in the license management lifecycle, which is called “interpretation” of the measurements results. The IT-manager has to admit that all the tasks from the lifecycle are important, but the interpretation cannot be performed without deep knowledge of the vendors policies, licensing rules, contracts and their parts incorporated electronically (as a part of vendor’s website), as definitions, terms and conditions.

Interpretation – it is what brings your infrastructure to the condition, that is called by vendor as “compliant” or “incompliant”. After you measured all the technical stuff, you need to apply all the licensing rules, contractual conditions, vendors policies.

Who knows how, when and what – wins!

Those of you who read Robert Asprin in the childhood and know the game of Dragon Poker from it, should remember that the winner is determined by the rules. And who knows - how to apply the rules better - will benefit. The same is in licensing. If your IT-manager does not know the rules or does not have experience how to apply them, you will never win. Your IT-manager will always be led by vendor, “which probably knows better” how to apply his rules and take customer’s money. And, if there is only one player – the vendor – it is absolutely clear what is going to happen: it is all about money.

In order not to lose this game, there are two ways to create appropriate SAM expertise in her or his team or to outsource it to professionals. First way is rather complicated – it is very difficult to find people with appropriate experience in the market. There is always risk that they will fail and the IT-manager’s company will have to pay for this, since the software is always expensive. Second way is much better, but mistakes are also possible, because often customer is not able to recognize a professional. Main factors here are:

  1. Absence of partnership with vendors, which means absence of interest in selling software and focusing on the customer’s interest instead of the vendor’s

  2. Presence of own expertise, developers and deep knowledge of products licensing, that can guarantee ability to “play with the vendor on its field”

  3. Real experience, confirming with references and testimonials, that can give understanding of how and what the results had been achieved.

Forth task in the license management lifecycle is “optimisation”. There is no magic here – it is minimisation of software usage keeping the same level of software functionality. Mostly it is a task of IT-manager, who perfectly knows the company’s infrastructure. As soon as she or he becomes aware about correct ways of licensing, usually her/his team is able to find a way of how to reduce the usage - if it is possible at all.

Logically, it is a process of multiple iterations. Any optimization changes have to be checked for the results. And this leads us to the fifth task, called “monitoring”.

The main requirement here is to organize performing of all tasks mentioned here on a regular basis. Starting point for the “compliancy” condition is to perform one-time cycle, that we can call “internal software audit”. After this internal audit is done and the optimization process is finished for the current stage, any incompliances have been resolved; the only thing that remains is – to maintain this condition and avoid incompliancy in future.

In order to reach such a condition, that we can call “continuous compliancy”, the IT-manager has to constantly monitor the numbers of usage and compare them with license grant numbers. In case of any discrepancies between these numbers, the IT-manager shall perform correcting actions.

As any type of monitoring, the compliancy monitoring consists of the database, where the usage data is being collected and dashboards, that show results in usable way. The database should be made by the same algorithms as four previous tasks. It has to agregate all the data gathered at these tasks, but on the regular basis, with a defined frequency. The dashboard has to show the necessary information with required visibility. Formally, the customer with his IT-manager can use any dashboard system, that is used within his organisation or see what kind of dashboards can be offered by professionals in license management.

To remember and to win!

As a conclusion, we can highlight:

In order to realise the SAM concept, IT-manager has to perform a set of tasks, that can be presented as a closed lifecycle of license asset management.

  • First task is a discovery of software used in order to know what software has to be licensed.

  • Second task is a measurement to determine the asset quantitatively.

  • Third task is an interpretation, where compliancy of the infrastructure is defined.

  • Forth task is an optimisation or bringing the software usage to minimum in order to save money.

  • Final, fifth task is repeating this cycle and monitoring continuously parameters that are changing.

No doubts that realisation of this lifecycle for proper license management is important, since only this can help to reach maximum savings (effective TCO) within organisation.

Sincerely yours,


*the image for the article is generated by Midjourney

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