Firms need to switch spend from running IT to optimising new investments

CA kicked off its user event today with advice for IT chiefs and businesses on how to get through the current bleak economic climate, including the need to dramatically reduce the amount of IT budget dedicated to running the IT organisation.

At the opening press session of CA World 08 in Las Vegas on Sunday, Patrick Starck, corporate senior vice president and general manager for CA’s EMEA division, started off with the surprising notion that “nothing has changed” for firms despite the worsening financial situation and meltdown of the markets. However, he continued: “One fundamental thing has changed – the pressure that companies are facing.

Starck said that as a result of the recession, it is more difficult for firms to get investment and finance to sustain growth. “A few months ago it was a financial crisis, but now the economy is in recession mode," he advised. “A mistake that was recoverable a few months ago could kill a company right now.”

A key impact of the current situation will be the introduction of more regulation, according to CA. “All companies will have to face new regulation and update their systems to be compliant,” Starck said.

Starck cited three priorities for firms: reduce IT costs; optimise IT investments; and enable governance of risk.

“Sixty to 70 per cent of IT budgets are to run the IT organisation; 30 per cent is for new investment. No CIO could expect their budget to grow by two digits; if it grows by one digit that’s a great achievement,” he said. “But the 70 per cent should drop to 40 or 50 per cent to enable the right investment to be made in new technology.”
Bjarne Rasmussen, senior vice president, Sales Acceleration, CA EMEA, said the current economic climate meant that firms needed to find the right area of IT to invest in to save costs. “Executives want to know where to spend money optimally and the return on investment of money spent on IT.”

Rasmussen cited virtualisation as one way of optimising investment. “In a computer room with 10,000 servers, 7,000 of them will be doing nothing at any particular time. Virtualisation means you can put three virtual computers onto one physical server,” he said.

Proper IT governance is also crucial in the current situation.

“With some applications it’s okay if it has a 10-second response time and only runs three days a week as it’s only internal employees who access this; but that isn’t the case with a core banking application,” Rasmussen said. “A lot of companies have spare laptops everywhere and don’t know how much software they’re using, so they order extra or overuse and are in breach of their licensing.”

To aid firms in achieving better IT governance, CA announced it has teamed up with Cranfield School of Management on a research project to help put a value on corporate IT assets. The project began in September, with the results due at the end of 2009.

Joe Peppard, professor of Information Systems at Cranfield, explained that the research project will involve working with other business schools and universities around the world to assess best practice examples for measuring the value of IT; and carrying out case studies on organisations "doing interesting things in this area".

The decision by the US government to create the role of a IP tsar to keep an eye on intellectual property has been heralded as a move that the UK government could learn from.

The UK organisation that defends the software industry’s intellectual property, FAST IiS welcomed the American decision and added that it had been keeping the pressure on the British government to do more to protect IP.

In a statement, John Lovelock, chief executive of FAST IiS, said that the UK system was continuing to improve but there was still a need for the government to do more.

“For the UK to continue to prosper and profit from its outstanding creativity, it also requires Government to sponsor and support the education message of respect for IP for everyone from age eight to 80. Whether in school, university or commerce, IP has to be valued by everyone,” he said.

FAST IiS has been actively using the greater powers that came into force in April last year as part of the Copyright, Designs and Patents Act 1988, which came into force in April last year. Trading Standards are able to enter premises they suspect of holding counterfeit product.

The Business Software Alliance (BSA) has continued to keep the pressure on those failing to use legal software after announcing a handful of lsuccessful cases in its fight against unlicensed products.

Three of the cases have ended up being settled and a further one looks as if it could go to court as it pursues users that have failed to use licensed software.

In one of the cases a six-figure settlement was reached with a northern-based travel company after it was found to be using unlicensed versions of Microsoft software. On top of the settlement the company has spent a further £100,000 buying legitimate software.

Settlements have also been agreed with Procurasell, a company developing recyclable packaging, and with online marketing group, Webevents Ltd.

The BSA has also filed an application for a court order against Philips Collection Services, a debt recovery agency from Durham, which is alleged to have been using unlicensed copies of Microsoft and Adobe software on approximately 100 PCs.

"Not only do the settlements take significant chunks out of the companies' profit margins, they also send negative messages to staff and customers that these firms are willing to resort to unscrupulous measures to save money," said Najeeb Khan, Vice Chair of the BSA's UK country committee.

He added that the latest cases should act as an example to the rest of the market and indicate that the industry took the protection of intellectual property rights.

The Federation Against Software Theft (FAST) is a not far away from rolling out a forensic tool that will enable Trading Standards to search systems to find unlicensed software.

John Lovelock, chief executive of FAST, said that it was developing an application that would provide the Trading Standards officers that entered premises with the ability to check systems for products that didn’t tally with licensing documentation.

“Because Trading Standards is going into a business investigating a criminal offence it has to be beyond a shadow of a doubt [the evidence of wrong doing],” he said.

He added that a third-party was working with FAST to develop the tool and it hoped to have it ready in a few months to be able to arm Trading Standards with technology that could interrogate systems to reveal the true picture of software they were using.

Earlier this week FAST carried out its first raid in Becton, East London with Trading Standards using the powers laid out in Section 107A of the Copyright, Designs and Patents Act 1988, which came into force in April last year.

Under the powers in the Act Trading Standards are able to enter business premises they suspect of holding counterfeit product. The raid earlier this week was on a residential property and was made in conjunction with the Police, which provided the necessary warrants to search domestic property.

Speaking to MicroScope a couple of days ago Michala Wardell head of anti-piracy and licensing at Microsoft UK, said that it benefited everyone if the criminals were prevented from selling and using counterfeit goods.

“The more these dodgy traders are removed from the channel it will help keep a more buoyant channel,” she said.

The powers that were made law ion April 2007 under Section 107A have taken time to filter through as the enforcement bodies have got to grips with ways to use the law but there has been an increased amount of anti-piracy activity this year as FAST along with the Business Software Alliance start to use powers given to those protecting intellectual property by the government.

Thriving new business SAM Practice has been unveiled as one of four finalists at the Startups Awards 2008 in the ‘Service Business of the Year’ category, handing it the chance to win the £5,000 top prize.

Reading, UK, 16th September 2008: The shortlisting judges were impressed by SAM Practice’s concept and potential, placing the business among a handful of lucky finalists plucked from hundreds of entries.

SAM Practice is a leading independent Software Asset Management (SAM) service provider. This newly formed company, which has only been operating for 12 months, delivered results above expectations and in excess of £1 million in its first year of trading and at the same time saved its customers more than £16 million.

The Startups Awards 2008, organised by Crimson Business’ Startups.co.uk, in conjunction with Barclays, comprises of 17 categories, each showcasing the best new businesses in the UK. The overall winner will walk away with a £5,000 cheque.

The winners will be unveiled at a prestigious awards ceremony and three-course luncheon to be held at the Royal Garden Hotel in Kensington on Thursday 30th October 2008.

Jason Allaway, CEO, SAM Practice comments: “We are thrilled to be a finalist in the ‘Service Business of the Year’ category and very much look forward to the event in October. It’s great that all our dedication and hard work has been recognised by Startups.co.uk, and we’re delighted to be in with a chance of not only winning the category but also the much-coveted ‘Barclays Startups Business of the Year’ prize.”

Startups.co.uk is the UK’s largest independent online resource for budding entrepreneurs and the Startups Awards is one of the leading events on the small business calendar.

To be eligible to enter the Startups Awards 2008, businesses must have been trading for less than three years, be privately owned, and employ fewer than 60 people.

This year’s judging panel consists of some of the UK’s most successful entrepreneurs, including Chrissie Rucker, founder, The White Company; Alan Giles, chairman, Fat Face and Simon Calver, chief executive, LOVEFILM International.

The judges look at a wide range of criteria; in particular, business success either by increase in sales and unit volume, market research and identification of customer focus, organisational and team building effectiveness, strategic planning, overcoming obstacles and barriers to success, visionary leadership and social and community responsibility.

For further information about Startups Awards 2008 visit www.startupsawards.co.uk or telephone 020 8334 1680

-Ends-

Notes to editors:

SAM Practice

SAM Practice is a 30-employee strong organisation and has offices in four locations in the UK and one in New York. Over the past year SAM Practice has been working across multiple geographies around the globe and has been winning new deals in most key vertical markets. Over half of its business comes from its Managed Service offering, which is designed to implement the processes and procedures necessary to maintain an optimised licence position. In the year ahead, SAM Practice is looking to double its business and continue to drive value, savings and operational efficiencies for its customers.

For information on SAM Practice please contact: info@sampractice.com / 0845 634 5162

Startups.co.uk

The 2008 Startups Awards is organised by Startups.co.uk – the UK’s largest website for people starting and running their own businesses. Startups provides free help and advice to 160,000 new visitors every month. www.startupsawards.co.uk

For press information on the Startups Awards 2008 please contact: Ella Gascoigne on 02083341682 or at ellag@crimsonbusiness.co.uk

For further information:

Paula Elliott
C8 Consulting Ltd for SAM Practice
Tel: + 44 (0) 118 9001132
Email: paula@c8consulting.co.uk

Will McManus has been hit twice -- with software audits.

They hit him in the wallet. Nearly $10,000 on Microsoft Exchange mailbox licenses for which the company unknowingly hadn't paid. Even worse, close to $100,000 in license and legal fees to Autodesk Inc., maker of popular design software AutoCAD.

As CIO at Dynamic Systems Inc., an Austin, Texas-based mechanical contractor, he services 2,000 employees in seven offices and the field.

The experience wasn't fun.

"It's a little deflating, only because you are aware of the amount of time it's going to take," he said. "And there's no indication how zealous they're going to be in pursuing it. I have a department of six people and it absorbed an enormous amount of resources."

As far as preparation goes, McManus isn't alone. A recent survey found that 69% of IT leaders are "not confident" they are in compliance with software license agreements.

McManus' Microsoft license audit was more than three years ago now, but he said he remembers his staff spending weeks gathering the information Microsoft required.

The Microsoft audit began with a certified letter. McManus was required to show the size of his installed software base versus the number of Microsoft software licenses Dynamic Systems owned. He said the company turned out to be running too many mailboxes out of Microsoft Exchange. McManus attributed this to the employee turnover rate in some of the business units.

Juan Fernando Rivera, director of antipiracy for Microsoft in the U.S., said the company doesn't want to be punitive when conducting license audits. Instead, Microsoft uses its partner structure to disseminate Software Asset Management, the behemoth's license management protocol, to customers.

Rivera described Software Asset Management as "80% process, 20% tools," really a series of Microsoft-specific guidelines to help CIOs ensure they are compliant with Microsoft license agreements. The company offers a free tool to track Microsoft software on up to 250 PCs.

"We believe that customers, for the most part, want to do the right thing," Rivera said. "It's not about penalties. It's not about looking and charging for past usage and things like that.

"It's not punitive at all," he added.

McManus' experience with Microsoft reflects that attitude.

"When we were all said and done they were satisfied with what we had done, it just took a long time to put it together," McManus said. "That one was time consuming but relatively painless."

Not so with Autodesk. As it was, McManus had zero visibility on who was using AutoCAD. Instead, a department manager oversaw the program. When the audit was done, the company was out nearly $100,000.

A spokesperson for San Rafael, Calif.-based Autodesk wrote in an email that information about the audit procedure and how the company decides to initiate an audit is "not something we share."

But Autodesk does maintain a license compliance website featuring information on recent settlements with companies illegally using AutoCAD and other software.

Take Bickel Underwood Corp., a Newport, Calif.-based architecture firm publicly shamed to the tune of $73,300 in a settlement with Autodesk. The page also includes a write-up on the $124,000 Payless ShoeSource was forced to fork over in December 2006 after the company was found running unlicensed software made by six different companies, including Autodesk.

The Payless settlement was handled by the Business Software Alliance (BSA), a coalition of software companies that collects, investigates and acts on software piracy tips. Most tips to the BSA come from current and former employees of the offending companies.

License audits by the BSA start and end with attorneys. Companies are asked to conduct a complete software audit and provide proof of ownership, usually through a dated proof of purchase, such as an invoice.

If illegal software is found then, "first and foremost, the company needs to agree to get compliant with all that software," said Jenny Blank, senior director of legal affairs at BSA. That means paying for licenses or uninstalling the software.

The BSA then proposes a settlement amount. The exact settlement proposal is based on the value of the illegally installed software.

Blank suggested CIOs get ahead of the BSA by routinely conducting in-house software license audits.

"One of the first steps I would recommend would be to have management at the top level put together a policy and communicate it to the employees," she said.

"Get the work done and keep it fresh," she added. "You don't want to just do it once and put it on a shelf and never touch it again, because software is dynamic and is installed and uninstalled all the time."

McManus' $110,000 license audit convinced him it was time to put in for some license management software. He ended up with a product from Seattle-based Express Metrix LLC.

Previously, "we sort of had some real manual processes," McManus said. "Even as manual as filing cabinets and paper licenses and had real difficulty in both audits in justifying the number that we had installed versus the number that we owned."

With the management software, McManus says he has much better oversight of Dynamic Systems' licenses. That means not only does he know when he's using too many copies of a program, but he also knows when he has copies to spare. Plus, he said, it saves him a bundle in staff time, key in a small IT shop like his.

"We can see if people are loading software on their own or 'Did they have IT's permission to load?'" he said. "We're finding that this automation has made us much more productive and effective at taking care of what really is the company's property."

McManus said he did consider using free software management tools available for download, but they "stopped being effective at 75 seats or so."

Network giant Cisco has acquired email and calendaring software vendor PostPath for $215m, in a move seen as an attempt to compete with Microsoft in both email and online collaboration markets.

Cisco said PostPath's technology could interoperate with "many other email systems, as well as providing a browser-independent AJAX Web client, and maintaining compatibility with a number of mobile clients, including RIM's BlackBerry and Microsoft's ActiveSync." It will also be integrated into Cisco's 'cloud-based' Webex software-as-a-service (SaaS) offering.

Alex Hadden-Boyd, Webex marketing director at Cisco, in a blog post said: " PostPath offers Linux-based both client and server-based email and calendaring, uses innovative Web 2.0 architectures, and can be used by both large enterprises and SMEs.

"The technology has native compatibility with Microsoft Outlook and Exchange. "

The deal is subject to standard closing conditions, and PostPath employees will become part of the Cisco Collaboration Software Group (CSG), which also includes web collaboration vendor Webex and email security provider IronPort.

Download the PDF here

The Business Software Alliance (BSA) has applied for court orders against RedPC Services and Overclockers UK for suspected use of illegal software after both companies failed to complete a software audit.

The BSA said that satisfactory responses were not received after requesting the audit, making it necessary to request an order from the court instead. RedPC Services is an IT training firm and Overclockers UK is IT hardware vendor. In both cases the alleged unlicensed software use concerns Microsoft and/or Adobe products.

"The BSA and its members are happy to advise and support businesses that need guidance through the licensing process," said Sarah Coombes, senior director of legal affairs in EMEA for the BSA.

"These cases, however, called for an alternative approach. We tried to work with these businesses, but a lack of co-operation left us with no alternative but to pursue this through the courts.

"Companies need to understand that failure to adequately account for the software they use cannot be tolerated."

Rupert Lowery, managing director of Overclockers UK, told vnunet.com that, although he believed the BSA's actions to be rather heavy handed, the company is taking the claim seriously and providing the relevant information.

"We are very happy to help and co-operate, and that is what we are doing," he said. "We are investigating the claim and responding accordingly. Ultimately we expect to have no issue whatsoever."

SAM Practice LTD selected by LANDesk UK as premier SAM specialist for their upcoming Manchester and Reading SAM Events –‘Soothe the headache of SAM:- Integrating compliance measures within your IT processes’

SAM Practice will be presenting on ‘What the UK’s SAM specialists can offer you’ following additional presentations by Microsoft and LANDesk. This complimentary half day seminar will give you a unique complete view of  SAM best practice in today’s market. The morning events will be held in  Manchester on 24th June and Reading on 26th June 2008 and further information can be found at LANDesk SAM LINK