Traditional enterprise software licensing has become too complex and is pushing organisations towards on-demand and open source alternatives, according to IT directors.
An overwhelming majority (10) of silicon.com's 12-man CIO Jury IT user panel said software licensing has now become too complex.
Neil Hammond, head of IT at British Sugar, said the complexity is due to the differing licensing conditions between suppliers, the complexity within the agreements themselves and "trip" clauses that trigger a licence fee increase.
He said: "As much as five per cent of IT's efforts can be spent managing and administering licensing, once you take into account licence administration, auditing requirements, and financial management."
Chris Robinson, CIO at Staffordshire County Council, said: "It is certainly in the suppliers' interest to keep it complex in the ERP market, witnessed by the huge differences in discounts offered on licences depending on who the customer is and how good their internal negotiators are."
Simon Norbury, head of ICT at Westminster City Council, said: "I defy any medium-sized ICT organisation not to be in default with Microsoft."
This complexity is forcing organisations to look at alternatives. In the case of 192.com it is one of the drivers for a move towards open source.
Paul Broome, IT director at 192.com, said: "With upgrades, 'rental' licences, and licences tied to specific hardware it's crazy, difficult to manage and properly budget for. Microsoft-type licensing tied to specific hardware gets my goat, where any hardware change is like moving house but being forced to leave all your furniture behind as it's not acceptable use to relocate it in your new house."
On-demand software as a service-style arrangements are also becoming increasingly popular with IT buyers.
Kevin Fitzpatrick, CTO at Manpower, said: "Part of the attraction of on-demand and application service provider services is the simplicity and transparency promised."
But Ted Woodhouse, director of IT strategy at Leeds Teaching Hospitals NHS Trust, said the issue is not complexity but differential licensing costs.
"For example, what justification is there for 'academic discount', which can be anything up to an 80 per cent reduction, applying to a university but not to the NHS? It is differential pricing that seems to be the problem, not the complexity of the licensing itself."
Russell Altendorff, IT director at the London Business School, also disagreed with the assertion that licensing has become too complex. "It is the basic duty of a CIO to be legal and ensure compliance with best practice for managing this type of thing," he said.
Today's CIO Jury...
Russell Altendorff, IT director, London Business School
Neil Bath, IT director, Brewin Dolphin Securities
Alastair Behenna, CIO, Harvey Nash
Peter Birley, director of IT, Browne Jacobson
Paul Broome, IT director, 192.com
Michael Elliot, IT director, Hasbro
Kevin Fitzpatrick, CTO, Manpower
Steve Fountain, IT director, Markel International
Neil Hammond, head of IT, British Sugar
Simon Norbury, head of ICT, Westminster City Council
Chris Robinson, CIO, Staffordshire County Council
Ted Woodhouse, director of IT strategy, Leeds Teaching Hospitals NHS Trust
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