4 ways to keep your cloud licences compliant

4 ways to keep your cloud licences compliant

Cloud licensing is becoming increasingly complex, but following a few simple steps will help enterprises stay in compliance.

Published on 2nd August 2019

On Aug. 1, under the guise of easing management, Microsoft announced several significant licensing changes for its on-prem and cloud-based services. Starting with launch of its Azure Dedicated Host services and Azure Hybrid Benefits program, Microsoft changed its definition of outsourcing on-prem software licenses being hosted on some of its biggest rivals (Amazon Web Services, Alibaba, etc.).

After Oct. 1, the often-touted cost benefits of using a bring-your-own-licensing (BYOL) model for Microsoft software in the public cloud will fall, victims of monetization, and it’s striking fear in the hearts and budgets of enterprise IT. Let’s be honest, this isn’t an unexpected move by Microsoft — nor would it be for any of the major hosted providers. Licensing has become a highly complex dance as the cloud era matures, creating a challenge for enterprise data centers.

Basic Models for Cloud Licensing

Just a few short years ago, licensing in the cloud was far less complex. With four basic models and the ability to connect with a wide variety of vendors of choice, often the only concern was cloud platform compatibility. As market competition matured, licensing costs, metrics, and terms became as varied as the providers that market them. That isn’t to say the four basic models have gone away.

At the highest levels, infrastructure as a service (IaaS), platform as a service (PaaS) to software as a service (SaaS), cloud licensing typically follows these models (although vendors may have their own “names,” such as component, for them):

Cloud Licensing, Not That Simple

Sounds easy, right? Not really. Let’s uncover some additional licensing metrics with these questions:

As these are basic, non-vendor specific considerations for licensing, it’s easy to see how complex the cloud licensing environment is to navigate during procurement and how difficult it’s to remain compliant once deployed.

4 Steps to Maintain Cloud Compliance

But fear not! There are ways to keep on the right side of ever-changing license conditions to remain as compliant as possible. While none of this is really “new” to data centre pros, a few of them – especially the first and second one – bear repeating:

1. Restrict user software download permissions, and log all downloads

Whether a seasoned IT professional downloading software into a sandbox for environment testing or an analyst looking for an easy way to model data, users have become blind to click-through licensing agreements – and software vendors know it. A 30-day free trial to get the exact software the user wants right now? “Accept.” Failure to remove it in 30 days? You’re out of compliance, and many times, subject to a vendor audit.

2. Sync license renewals – all of them

It’s worth the time and energy expended to negotiate and pay the appropriate fees to sync up every available license – on-prem or in the cloud – to a targeted timeframe. From the data center to the desktop, in most enterprises, this can be a costly proposition and generate a large initial expenditure, but it will also ensure that no license is left behind to generate a large vendor penalty, loss of use, or hefty re-renewal payment.

3. Negotiate, negotiate, negotiate

From true-up provisions extending the amount of time to allow compliance without adding extra cost, to vendor license movement restrictions to limiting cores, use the leverage of the procurement process to mitigate as many risks as possible at the outset.

4. Audit your ecosystem, before your vendor does

Given the complexity and flexibility of licensing, and the ease with which new services can be spun up or down, make it a practice to run internal licensing and software asset management audits regularly. Whether you deploy an internally written script, engage an audit consultant, or purchase any number of applications to crawl your system, the cost of regular internal audits is significantly cheaper than being found out of licensing compliance.


Ultimately, navigating cloud licensing and its implications isn’t for the faint of heart. Microsoft’s shot across the bow of hosted/outsourced BYOL is just the latest in a long line of rapid, enterprise-affecting changes. As a result, oftentimes enterprises choose to rely solely on their vendors to present proper licensing metrics, appropriate features, and discount opportunities that align with enterprise cloud strategies and architecture. Recognising that this allows “the cat in the hen house,” IT leaders often feel as if their options are limited. As Microsoft has shown, these feelings just might be validated.


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