The three-pillar model
Used licenses for genuine freedom: breaking free of the cloud trap through strategic license management

The situation on the software market has radically changed: major software companies have systematically been pushing their customers into cloud subscriptions, leading to price hikes, longer contract terms and dwindling options. Doing nothing means risking losing control over your IT budget and facing limited technology options in the long run. Combined with the targeted use of second-hand on-premise software licenses, strategic license management is the most effective means to gain back one’s digital sovereignty and to ease the pressure on expenditures.

After its acquisition of VMware, Broadcom radically pivoted its licenses to a subscription-based model. For many customers, this went hand in hand with sometimes drastic price increases and no choice as to the contract duration. However, Broadcom is not an isolated case. Microsoft has also put up its prices significantly several times over the past years and forced its customers into subscriptions. The rationale is clear: subscriptions make license conditions easy to change dynamically – usually to the detriment of the customer.

Digital dependency as a business model

The fact software companies are favouring cloud models has less to do with the purported advantages of digitalisation and more with them systematically strengthening their market position. As businesses do not own software licenses in the cloud but merely rent them, any further use depends on whether customers accept the provider’s conditions. Once applications are deeply integrated into their processes, businesses will be very reluctant to switch. And this is exactly what software companies are banking on.

In addition to the potential financial burden, this also poses risks for their digital sovereignty. In the case of cloud subscriptions, how and to what extent software can be used is entirely up to the provider. A particularly sensitive issue is that under the US Cloud Act, US providers are required to grant access to customers’ data if requested to do so by US authorities. This is true even if this data is physically stored on servers in the EU. In view of the tense transatlantic relationships, this topic has gained in importance, making license management a key strategic factor.

Used licenses and software asset management: the key to independence

Not going along with every cloud migration without giving it a second thought and making targeted use of on-premise licenses is a way of gradually getting out of the vicious circle of dependency. Buying software licenses instead of renting them has three major advantages: you only pay once, you can claim the expense and you can use the application with no time restriction. This is true both for use in your own data centre or as a BYOL option in the cloud. Purchased licenses can also be resold second-hand once they are no longer needed.

Any resilient and future-proof IT system is based on three pillars: a license strategy suited to the requirements at hand, the purchase and sale of used licenses and professional software asset management. This approach proves particularly effective when implemented with a specialised partner that offers all three: consulting, license trading and license management. Experienced IT advisers can help you determine your needs precisely, assess available models carefully and reduce dependency while improving your cost structure sustainably.

Expertise, tools and the right partner for audit-compliant license management

While on the lookout, businesses and authorities should ensure the prospective partner has a team of SAM experts that know the intricacies of license terms of software companies like VMware and Microsoft. Modern license tools bring together order documents, licenses and installation files in a single, centralised location, facilitate coordination and offer an audit-proof base. Using upgradeable solutions, it is possible to manage both the current software pool and legacy used software, and to integrate versions from multiple sources. The LizenzPortal by LizenzDirekt, for example, is available as a more comprehensive package, providing the option for users to turn a simpler starter version into an extensive system for professional software asset management.

Another crucial aspect is the cooperation with third-party support providers such as Origina or Spinnaker. VMware customers working with used licenses can thereby access independent support for their virtualisation software and are no longer bound to Broadcom’s terms. The partner should also have direct access to outstanding services in all IT fields and collaborate with specialised lawyers to ensure compliant trading in used software.

Future-proof IT in a nutshell

Perpetual licenses are a decisive way of safeguarding digital sovereignty and ensuring cost control. A balanced mix of purchased licenses, used software, open-source solutions and cloud solutions from various providers will help make businesses become less dependent, mitigate their risks and optimise their budgets. Office LTSC 2024, for example, can still be used without cloud connection, and the VMware infrastructure can work with second-hand licenses and third-party support in the long run. From analysing your needs to procuring licenses through to ensuring audit compliance, there’s no time like the present to rethink your IT strategy, manage your software licenses strategically and work with an experienced partner to future-proof your operations.