How does traditional software licensing apply in the cloud world?
Vendors and customers alike are struggling with the question of how software licensing policies should be adapted to the cloud. Packaged software vendors require up-front payments, and make customers pay for 100% of the software’s capabilities even if they use only 25% or 50%, Gens says. This model does not take advantage of the flexibility of cloud services. Oracle and IBM have devised equivalency tables that explain how their software is licensed for the Amazon cloud, but most observers seem to agree that software vendors haven’t done enough to adapt their licensing to the cloud. The financial services company ING, which is examining many cloud services, has cited licensing as its biggest concern. “I haven’t seen any vendor with flexibility in software licensing to match the flexibility of cloud providers,” says ING’s Alan Boehme, the company’s senior vice president and head of IT strategy and enterprise architecture. “This is a tough one because it’s a business model change.
