In Stay Sharp Episode 142, What Leaders Need to Know About Software Licensing, co-hosts Juliann Grant and Jonathan Scott welcome Paul Empringham, the VP of CAD, Simulation, and PLM at NYBS Consulting, an independent consulting and software asset management firm. Paul, whose career has ranged from designer to engineering systems manager and transformation manager, offers insight into why a thoughtful and analytical approach to software licensing is something you should be thinking about and acting on.
The Evolution of Licensing
Everything began with a perpetual licensing model. Paul explains, “You bought the license, you paid maintenance on top, and that gave you the support from the vendor as well.”
Paul Empringham, the VP of CAD, Simulation, and PLM at NYBS Consulting
That concurrent licensing model worked, with a certain number of licenses—Paul gives an example of 200 licenses for 300 designers—typically meeting the needs of larger teams of workers. Those were capital expenditures (CapEx), and companies paid a fee up front and then a percentage on top for annual maintenance. Plenty of vendors and customers still operate with that licensing model, he notes.
As software developed and became more critical to manufacturing organizations, the platforms also began offering more functionality. “Aerospace, defense, automotive really pushed the envelope here,” he says. “They wanted to start doing more simulation, electrical routing, sheet metal, CAM. We found that the big tools from the biggest vendors started pulling in these additional functions and features.” Of course, vendors wanted to charge more money for all of that functionality, but manufacturers realized they didn’t need them for the entirety of a project’s lifecycle.
As software developed and became more critical to manufacturing organizations, the platforms also began offering more functionality. “Aerospace, defense, automotive really pushed the envelope here,” he says. “They wanted to start doing more simulation, electrical routing, sheet metal, CAM. We found that the big tools from the biggest vendors started pulling in these additional functions and features.” Of course, vendors wanted to charge more money for all of that functionality, but manufacturers realized they didn’t need them for the entirety of a project’s lifecycle.
Optimizing Your Licenses
Paul’s engagement with customers is usually triggered by something like a renewal with a high price tag or a new executive asking usage questions. He explains that the often misunderstood business of license optimization starts with metrics. “We have to initially put some tools in place that just measure who’s using which licenses on which computers, where in the world, for how long,” he says. “We do that, and that gives us the overview of everything they’re using.” Those metrics lead to reporting on what an organization has purchased compared to what they’re using—meaning their effective license position.
Then it’s about evaluating how to enhance, improve, or optimize what’s there. Jonathan adds, “It’s not just about the tracking and figuring out for the next renewal. Some of it’s about actively managing as well.”
Other benefits of proper license optimization work include helping a company identify key or power users for each function, identify adoption or training gaps, or investigate compliance with end-user license agreements (EULA). Overall, it gives a holistic picture of an organization’s licensing, which they can then use for renewals and other contract work.
Licensing Dos and Don’ts
The Don’ts start with piracy. Don’t download a hacked or cracked license because you can’t wait for the real one—your files will be marked, you’ll get errors, and there’s going to be a huge cost to cleaning your models or data. And don’t use generic logins, as tempting as it might be to have “CADuser” or “admin” as a shared account. It’s going to make you non-compliant.
The Dos: Do pay attention to EULA compliance, though Paul admits non-compliance can easily happen by mistake. Do talk with your vendors about their plan for future licensing so you understand what you might need to consider in the future. And do absolutely talk with your software vendors about license remix. “Don’t be scared of having a chat with your sales team, with the vendors to say, ‘Look, we’re not using these. Can we switch these out for something else?’, Paul says, adding, “Everything’s negotiable. It just needs thinking about and the raw data behind it to see what you’re doing and what you’re not.”
Learn More About License Management and Optimization
The full podcast contains more discussion and details on a variety of topics, including the challenge of the “three-legged stool” of software and license decision-making in manufacturing organizations, why no engineering manager should hold an all-hands and send everyone back to their desks to design something at once, what software tools Paul recommends for license management and usage reporting, and more.
Be sure to check out Stay Sharp Episode 142: What Leaders Need to Know About Software Licensing and join us each week for a new podcast.
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