Unmask the Truth in IT Management Licensing

Kevin Gillis, VP Product Management

Ipswitch Network Management Division

Brian Harrell, Network Engineer

Judson Independent School District

Thanks for joining us today.

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One of you will be the lucky winner of a brand new Amazon Kindle!

Basics of Commercial Software Licensing

• Grant of right-of-use to customers and end users based on mutually agreed terms and conditions

• The Intellectual Property (IP), outright ownership of the underlying code is never transferred

• Terms and conditions typically include:– Price of license and support/upgrades (annual cost)– The how, where, by whom and how much the software is used– License duration (e.g. 1 year)

The Perils of Software Licensing

That’s great!

You’re in their

budget until the

end of time now!

That’s great!

You’re in their

budget until the

end of time now!

Yeah…those guys at ACME

had no clue on the

software license…

Yeah…those guys at ACME

had no clue on the

software license…

Two Software Sales Guys

Economics of Software Licensing

Customer and Vendor Win:License price and “real” customer value is well matched

Customer Wins: Vendor charges less than real customer value delivered

Value / Price

Amount (Scale) of Software Use

Vendor Wins: Vendor charges more than real customer value delivered

Fairly Priced

How Does This Play Out in Real Life?Customer tries to negotiate price down:To levels closer or below their “perceived” value

Vendor tries to push up “perceived” customer value:To support internal customer justification to pay more

Value / Price

Amount (Scale) of Software Use

Variable Factors in Software Pricing

• Single biggest variable is estimating “how much” the software is used through one or more “scale” factors

– Simple scale factors • e.g. Sales tool licensed by seats (number of sales staff)

– Pro: Can be directly associated with delivered value– Pro: Easier to plan growth and budgets

– Complex scale factors • e.g. Sales tool licensed by amount of data stored

– Con: Hard to associate with delivered value– Con: Poor visibility in planning growth and budgets

Complex scale factors try to push up ‘perceived value’

more than ‘real’ value

Licensing Practices in IT Management

Simple ‘Scale’ Factors Complex ‘Scale’ Factors

Number of devices, systems (physical and virtual) and applications managed

Number of device sub-components monitored e.g. interfaces, managed objects

Number of separate products with distinct capabilities installed

Number of product sub-components e.g. reports, data volumes

Number of administrative users Number of monitored metrics e.g. performance counters, alerts

Number of view-only users Tiered pricing by device size and type

Level of Support (8/5, 16/5, 24/7) Location-restricted licensing

Business unit-restricted licensing

Node-locked licensing e.g. tied to machine MAC address

Size of host machine e.g. #CPU’s

“Named User” restricted licensing

Licensing Practices Unmasked Product Sub-Components

Reporting Engine

Processing Engine

Collection Engine

Data Store

ReportingReporting

Collection Engine

Processing Engine

Integrated Product –One Single License and Price

Componentized Product – Multiple Licenses and Pricing

Data StoreData Store

Licensing Practices Unmasked

Monitor Based

Device Based Licensing – each device comes with unlimited monitors

•CPU Monitor•Memory Monitor•Disk Monitor•Network I/O Monitor•Transaction Monitor•Unlimited for one price

•Critical SQL Services/Params

•Reporting Services•Max SQL Server Page

Buffers•Cache Usage on SQL Server•Wait Locks on SQL Server•Unlimited for one price

Monitor Based Licensing – each with a different license and price

CPU Monitor

Memory Monitor

Disk Monitor

Network I/O Monitor

Transaction Monitor (s)

Critical SQL Services/Params

Max SQL Server Page Buffers

Cache Usage on SQL Server

Wait Locks on SQL Server

Reporting Services

Licensing Practices Unmasked

Element Based

6 Cisco 6500 Switches = 1,000’s of Elements

Element-Based Licensing – 100's or 1000’s of element licenses and scaled pricing

Each Cisco 6500 series

switch can scale from 10’s to

1000’s  of elements with up

to 1152 ports per switch

 

6 Cisco 6500 Switches = 6 Devices

Device Based Licensing – one single license regardless of the number of ports and physical or virtual interfaces configured

Licensing Practices Unmasked

Element Based

6 Cisco 6500 Switches = 1,000’s of Elements

Element-Based Licensing – 100's or 1000’s of element licenses and scaled pricing

Each Cisco 6500 series

switch can scale from 10’s to

1000’s  of elements with up

to 1152 ports per switch

 

6 Cisco 6500 Switches = 6 Devices

Device Based Licensing – one single license regardless of the number of ports and physical or virtual interfaces configured

Economics of Software Licensing

Customer and Vendor Win:License price and “real” customer value is well matched with DeviceBased Licensing

Value / Price

Amount (Scale) of Software Use

Vendor Wins: Vendor charges more than real customer value delivered with Element or Monitor Licensing

Fairly Priced

Licensing Practices Unmasked

Tiered Devices

Flat Device Licensing – Charges for 2 routers

One price for all sizes of devices

Tiered Device Licensing –Charges for a Small Tier Device and a Mid Tier Device. Each device is charged at separate license rates

…simple and direct …complex and indirect

A Company Office1. Cisco 891 Branch Office Router

2. Cisco 7600 Series Router

Cisco 891Branch Office Router

Cisco 7600 Series Router

Licensing Practices Unmasked

Restricted Use Licensing

Free Use Licensing As long as it is used by the purchasing customer organization

Restricted Use Licensing The right to use the software (license) is limited by the number of concurrent users and/or location

Location Based:Limit to the number of concurrent users – typically within a single business unit.

Concurrent Users:Use anywhere, but limits are set on the number of concurrent users.

Node-Locked: Typically USB key or Mac address lock the license to a particular computer.

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Comparative Case Study in LicensingWhatsUp Gold Solarwinds Big 4 Vendors

Simple, direct device / system / application based licensing

Complex, “element based” licensing e.g. interfaces, ports, logical volumes and monitors

Complex, “element based” licensing e.g. interfaces, ports and monitors

Applications included Pay for each monitor used Applications not included

Single tier of device pricing regardless of size of server or router or switch, etc.

Element based licensing inherently scales pricing by device size

Complex, multi-tiered pricing based on device and system size over and above element count

No user based licensing No user based licensing Administrative and “view –only” user licensing

Agentless Agentless Expensive. Agents are extra

The Downside of Element-Based Licensing

• Charges for device and managed sub-component or “element”

• Hard to know which elements to start with

• Difficult to project how the deployment will grow over time

• Fewer monitors are deployed – potentially leading to inadequate coverage

• Quickly becomes expensive, as you monitor more elements

• Inevitably, idle ports are monitored (wasted investment)

• Priced to push all customers to higher-priced enterprise level licensing

License Cost Comparison

Device vs. Element Based Licensing

WhatsUp Gold (Device-Based) Solarwinds (Element & Monitor Based)

200 network devices - 2,400 elements based on 12 interfaces per device

200 servers - 2,000 monitors based on 10 monitored elements per server including resources and applications

200 network devices - 2,400 elements based on 12 interfaces per device

200 servers - 2,000 monitors based on 10 monitored elements per server including resources and applications

Total Device Count is 400Total License Count is 400

Total Device Count is 400Total License Count is 4,400 (2,400 + 2,000)

Licenses Required: • WhatsUp Gold Premium Edition $5,195• Application monitoring included $0

Licenses Required:• Orion NPM Enterprise License $20,975• Orion APM Enterprise License $19,995

Total Cost w/ 1 Year Maintenance: $5,195 Total Cost w/ 1 Year Maintenance: $40,970

Buying Element Based Licensing is like…

Buying your dinner one bow tie pasta….at a time

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Solarwinds WhatsUp Gold

The Licensing Need to Know List

1. Remember to calculate the true 3 year licensing and maintenance support of a product before purchasing– Discounts offered in year 1 don’t usually carry over– Lock in discounts on multi-year service agreements if you can

2. Simpler Licensing = Simpler Management– With unlimited elements you don’t have to work or waste time counting,

tracking or load balancing to stay in compliance– Price links directly to value

3. Apples to apples comparison on features…make sure you look at what’s included and what’s additional….

4. If you need a calculator or a dictionary to understand the licensing, it’s probably too complex!

5. Do your homework. There are vendors that provide real value with straightforward licensing.

Real Customer Example

• Introducing Brian Harrell, Network Engineer at the Judson Independent School District in San Antonio, TX

• JISD Facts– 20,000 students– 3,200 staff– 30 locations– 400+ network, servers and applications under management

– Initially selected Solarwinds – used it for a year and then switched to WhatsUp Gold. Let’s find out why.

Next Steps

• Visit WhatsUp Gold and try our new Cost Comparison Calculator

• Download our Licensing Practices in IT Management – A Primer

• See how WhatsUp Gold compares to Solarwinds Orion in our whitepaper Ipswitch WhatsUp Gold vs. Solarwinds Orion Comparing Product Offerings

Visit http://www.whatsupgold.com/compare/

• The 2nd Webinar in the Need to Know Webinar Series – on March 25, 2010 at 10 AM EDT

– The New Breed of SMB Infrastructure Management

• The 3rd Webinar in the Need to Know Webinar Series – on March 31, 2010 at 10 AM EDT or April 1, 2010 at 2 PM EDT

– Power Forward with the All New WhatsUp Gold 14.2

– Featuring WhatsUp Gold WhatsVirtual & WhatsUp Gold Failover Manager

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Questions?

www.whatsupgold.com

IpswitchWhatsUp Gold