Licensing

Licensing in a hosted environment is, for whatever reason, a moving target these days.  It seems that every provider offers services in a different way, and there is very little consistency in the market when it comes to the fees for and application of software licensing.  Even amongst the QuickBooks authorized hosting providers you can find dissent and disagreement with respect to the proper handling of software licenses.  The rules are actually pretty clear, however, if you would only read the EULA (end user license agreement) that comes with your software.  And, by the way, if you didn’t get a EULA or didn’t obviously obtain a license for a product that you’re using… well, that means something, doesn’t it?  It probably means that you should not be using that product.

Here’s an article on the subject from the April edition of  Practice Development News from InsynQ.

Licensing the Cloud: Hosted Desktops and Applications

The cost of managing and maintaining information technology in a business can be quite high, particularly if the business desires to support a remote or mobile workforce, multiple offices, or even a good disaster recovery and business continuity plan. Unfortunately, most businesses don’t actually recognize all of the costs of the business IT, often due to the fact that many good management and maintenance processes are simply not performed regularly.  With most small/medium businesses, fixing things that are broken is the primary goal of IT management.  With this approach, the true costs associated with a well-managed, secured, and maintained system could not be fully recognized.

When a business seeks to move to the cloud, or to a hosted and managed system with a quality service provider, the ROI and cost structures may look very different from what they’re used to.

In a quality service provider environment, there is an exceptionally high priority placed on network and systems management, security, administration and maintenance.  Further, equipment is typically rotated out of service more quickly than in localized IT environments, as the loads tend to be much higher and machines work harder more often.  Further, users tend to generate and retain more data, as they have less direct involvement with the chores related to managing that data (backups, etc.), and  may not be charged for each increment of data added to the system.  Even with the economy of scale created through server virtualization and high density shared infrastructure, the per-user costs of sustaining and growing the hosted systems are not insignificant.

Platform and server licensing, as well as Remote Desktop or Terminal Server licensing, are also factors in the hosted desktop service model.  Licensing, together with the infrastructure and management costs, create the foundation for subscription service charges from the provider.

Part of evaluating a quality service provider is considering how they license the service.  While platform licensing remains part of the service provider cost structure, application licensing is generally a cost to the client, but not always.  This is where many companies – subscriber organizations and service providers alike – get into trouble.

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