One of the sessions I sat in last week at Educause was regarding software licensing issues between higher education clients and vendors. I believe this session could have been an opportunity for some high drama, but the presenters kept the conversation positive and constructive. There are presentation bullet points available here and I encourage you to look them over if you are involved in purchasing from the school side or the vendor side. Here are my notes/recollections of the presentation:
Speakers: Sharon P. Pitt, Executive Director, George Mason University
Henry E. Schaffer, Professor Emeritus, Coordinator of Special IT Projects & Faculty Collaboration, North Carolina State University
Sarah R. Stein, Associate Professor Communication, North Carolina State University
Budget is an issue when it comes to higher education purchasing. Vendors need to make money, and open source isn’t always going to be the best option. Vendors and HE need to work together to come up with models that work for both of them. The “cloud” is bringing up both challenges and opportunities when it comes to software licensing.
- Cost: it won’t necessarily cost LESS for the license – but it might cost less for the overall infrastructure, especially hardware. It stretches not only the hardware purchasing dollar, but also lengthens the time hardware installation is useable when compared to desktop use.
- Students can access software anywhere they are – at school, at home, at any campus – anywhere they have broadband.
- Software in the cloud lends itself to software evaluation and decisions – especially when considering moving from a specific site (or department) license to a full institutional license.
- Different versions of software can be used by different people, which allows you to serve both cutting edge and slow adopters.
- Software as a service or in the cloud also allows institutions to really see how/when/where people are using it. You can also see which versions of the software are being used more (longtail environment).
- Virtual labs allow HE to be “agnostic” when it comes to device use.
- SW licensing criteria changes depending on the vendor. Some license by FTE, some by concurrent users, some by institution (or site) count.
- Any cloud software worth using helps institutions track usage detail and tells institutions how usage is comparing to licensing – institutions want to remain compliant.
- One interesting example: a vendor licensed content based on seats (concurrent users) at 50 users. When the school hit 51, the vendor sent a graceful email suggesting that the campus move to 75 users. This allowed the school to meet demand and remain compliant by anticipating users.
- CPUs don’t matter anymore. Usage is by seats – student could use 3 devices, reality is that it’s one student.
- HE is price sensitive but they are willing to pay for what they use.
- How do we make money?
- What happens if model changes?
- How do we auditing license use (standards)?
- HE sends mixed messages, even at the same institution.
- Multiple levels of licensing (when a vendor has to pay another company for a sub-license, that can affect prices).
- HE client must be educated on issues with any particular software licensing.
Advice for Vendors
- It’s important to have predictable costs for licensing because of the HE budget cycle.
- Bundles that don’t meet HE needs build resentment.
Example: A school has 800,000 students, an FTE of 250,000 and about 100 use the cloud concurrently, a few thousand in total use the software. HE clients do not want to pay for 250,000 users at this usage level. What makes sense for this example? What doesn’t?
- HE and vendors must work together to come up with what works and what doesn’t. Often, interactions with vendors are more fruitful when schools work together by state/organization or other affiliation.
- One challenge – often vendors will enforce an NDA on pricing making it difficult to share licensing costs with others in the HE community.
- Vendors need consistent feedback from HE to come up with licensing that works.
- Compromises must be affordable for HE but HE must pay for what they use.
- Generally this group preferred use licensing and concurrent licensing over access licensing. They will monitor and stay compliant.
- If HE cannot afford license because of unrealistic expectations of access licensing, they will find other products.
- HE wants to use your products! HE trains your future clients. Vendors and HE need to work together.
So, my thoughts.
My background is in sales and marketing for an HE focused software company. I am pretty darn pro-corporation! Just because someone makes money making tools for HE doesn’t mean they are any less passionate about education.
BUT I understand that HE institutions are bound by budgets and must choose the option which gives them the biggest bang for their buck. Corporations need to be fair. Why NOT offer concurrent user or actual usage-based licensing? It would give HE the opportunity to grow software use on campus while paying for no more than what they use. And it encourages HE to stay with your company rather than moving to an open source solution (not that there’s anything wrong with that!).
So what to do?
When I lived alone, milk was a problem. When I purchased a gallon, I never drank it before it went bad. But I was annoyed at buying a pint because it was so much more expensive when compared to buying a gallon. But I bought a pint anyway – I’m paying a premium for NOT buying in bulk. It’s a fair compromise.
I believe this is fair in software licensing too. Institutions would pay more per seat for fewer users, but they would only be purchasing what they actually use. This is probably why consortium licensing works so well for some institutions. It allows them to get “bulk” pricing while only purchasing what they need.
Just my two cents of course! I’m sure it could get more complicated. Can companies (especially smaller ones) survive making high-end cloud-based software at lower licensing levels? Will they need to put a minimum # on licensing? How will costs compare to open source options? These are all good questions.
I’m glad that George Mason and NC State started the conversation!