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Managing software licenses in cloud – Part 1

Cloud is coming to China. I have been involved in some large enterprises in China, and cloud is not only a new concept but also is a way to reshape IT operations for customers.

Although customers are not talking about cloud technology, they are using flexible, cloud-based technology to manage their IT operations. Cloud will bring fast deployment, standardized infrastructure services, automated IT operations and cost-effective investments for large enterprises.

The enterprises in China are more willing to use private than public cloud technology. Since most of them have subsidiaries in the 31 provinces in China, and in the overseas market, the subsidiaries may consider the private cloud like an internal public cloud to supply computing resources.

However, subsidiaries are not only requesting the virtual machines. They would like to install the enterprise software and solutions on an internal public cloud. Managing software licenses becomes a new challenge for the IT department.

Licensing in public cloud

Public cloud, such as Amazon EC2, mainly provides open source software to avoid licensing problems. However, many software companies, such as Oracle, IBM and Microsoft will provide software in the cloud environment.

In an infrastructure as a service (IaaS) environment, the software producer will ask for fixed license agreement. For example, Oracle will ask the user of EC2:

For EC2 instance containing 1 to 4 virtual cores, the number of Oracle Database Standard Edition licenses required will be 1 processor. On an EC2 instance with 5 to 8 virtual cores, two processor licenses would be needed. On the other hand, if one were to use one 4 virtual core EC2 instance and 4 single virtual core instances (total of 5 EC2 instances and 8 virtual cores), 5 processor licenses would be requires i.e. one processor license for each of the EC2 instances.”[1]

In Windows Azure, Microsoft uses almost the same management mechanisms:

“SQL Server 2012 is licensed per core, which is considered the equivalent to virtual cores in Windows Azure virtual machine instances. The minimum number of cores that can be assigned to a virtual machine instance is 4. This means that Extra Small (A0), Small (A1), Medium (A2), Large (A3), and A6 instances must all be assigned 4 SQL Server core licenses. Extra Large (A4), and A7 instances would need to be assigned 8 SQL Server core licenses.”[2]

Moreover, the companies will also provide all-in-one solutions such as “Hard Partitioning with Oracle VM” on EC2 or Office365 from Microsoft. In this scenario, the software licenses will be bundled as a software as a service (SaaS) solution.

Licensing solutions

The simplest way to solve the problem is using open source software to replace the enterprise ones. You could see most Internet giants are using such solutions.

For traditional enterprises, it is not easy to rebuild their systems with the Internet computing frameworks. There are many requirements for license sharing within them. An introduction of the solution will be in part two of this blog post.

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