Software Licensing and Software as a Service

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Part of our Blurring the boundaries (2): how technology is changing the way we learn series

Software licensing is undergoing a change. The days of purchasing a licensed copy on CD ROM are ending as software companies tire of the need to continually produce and sell upgrades to generate revenue. With today’s computers continually connected to the web, it becomes easy for software manufacturers to keep an eye on who has their software, and for how long they have had it.

It began with the ability to realistically download software from the internet and the subscription based model - notably employed by the manufacturers of antivirus software. Software as a Service (SaaS typically pronounced 'Sass') takes this model one step further.

By running the software on their own servers, and providing remote access to subscribers, vendors are able to keep a tight rein on who uses their software, and so manage their businesses more predictably. For businesses this model offers an opportunity to remove software from capital expenditure and assets, and to treat it as an ongoing service cost - thus protecting themselves from the need to run large data centres and giving them the ability to scale up or down as markets fluctuate.

With Virtualisation (discussed below) providing ‘hardware as a service’ it is possible for a company to manage their whole IT estate as a subscription based external service.

SaaS - In Our View

While SaaS is certainly the growth area of software licensing, it is unlikely that it will ever completely replace the current licensing model. Where specialist or high performance software is required, delivery over the web is still too slow, and customer numbers too low.

Issues with the location and responsibility for sensitive data could also have an impact on the adoption of this kind of software delivery. This is where the use of a Service Oriented Architecture (SOA) approach when designing systems gives the flexibility to meet those requirements which benefit from SaaS without compromising the ability to retain sensitive or specialist applications and data in house.

SOA approach encourages the development of services - islands of functionality with a clearly defined purpose and a specified interface. These services are hooked together to form coherent business processes. The use of SaaS provides opportunities for cost savings for the education sector.

Purchasing on a scalable subscription basis removes the need to have software installed locally, and simplifies licensing arrangements. This should enable deals to be done at local authority or even national level, thus improving standardisation and integration between establishments, and allowing the financial benefits of economy of scale.

It is likely that commodity software such as office applications and financial or process management software will be delivered in this manner. Specialist academic applications may require local computing resource due to performance or bandwidth requirements or be too niche to be cost effective using this approach.

Also in our Blurring the boundaries (2): how technology is changing the way we learn series

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If you have any questions about the subjects covered in this white paper or you would like to find out more about how Oakleigh Consulting could help your organisation, please contact us on 0161 835 4100 or email us.

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