Over the past few months South African businesses have had a lot to get excited about. Yes the country’s economy is not soaring, but the recent launch of Microsoft’s Azure data centres, as well as the impending launch of a local presence from Amazon (AWS) bodes well.

This as the prospect of more opportunities, potential for more investment in the country and access to new customers, are all great signs for businesses and enterprises.

While a move to the cloud thanks to increased data centre presence is cause for excitement, it also brings up other unforeseen concerns.

One such issue is software licensing, as Matthew Poulter, software asset management business manager at First Technology National, points out.

Go new or repurpose the old?

“As you move into the cloud, the entire licensing model changes from an outright purchase for a fixed period of time to a flexible model or agreement that can be switched on and off as needed. This requires a change in mindset such as moving from CAPEX to OPEX, as well as budgeting, and utilising controls to ensure spend is optimised according to actual requirements,” explains Poulter.

“With traditional licensing, you had to buy infrastructure and then deploy the appropriate software license to run the solution you required for your business. Migrating to the cloud changes everything. Understanding how your licensing model changes is key, particularly when running a multi-cloud or hybrid cloud environment,” he adds.

As Poulter continues, one of the biggest questions for businesses making the move at the moment is whether to let existing on premise licenses lapse, and then purchase new licenses when moving to the cloud, or whether to convert their existing licenses.

In his experience, many businesses appear to be opting for the former in an effort to save money, but this option can actually end up being more costly.

“Software vendors are entirely aware of the fact that the technology world has changed and that the move to the cloud is inevitable. As a result, many of them are actually offering discounts or incentives to customers with active software license maintenance in place,” says Jennifer Meggersee, sales manager for software at First Technology National.

She also adds that depending on the licensing model you already have, there could be cost benefits to renewing or converting your existing licenses rather than letting them lapse.

Talk to the right people

“This is why it is important to engage with a partner that specialises in licensing and Software Asset Management (SAM) in order to establish the best options for your business,” Meggerse stresses.

The pair from First Technology National also highlight the complexity that the cloud creates, especially given the levels of flexibility that it affords.

In these cases, they say preparation and profiling are crucially essential before any move to the cloud is contemplated. It is imperative for businesses to understand their users and their needs, so as to ensure that the most appropriate license can be obtained to meet specific requirements at optimal cost.

“Having the correct license in place is key, otherwise the cost benefit of a cloud migration could become difficult to achieve, and you may run into functionality and compliance challenges to boot,” says Poulter.

Making the most of the opportunity

“You need to understand what you need, what products are available, and how you will obtain these solutions. There are also often various licensing options, including cloud-specific licenses and hybrid solutions. Tracking these various licenses can also become complicated,” Poulter warns.

With benefits such as decreased latency, data sovereignty and reduced costs, the establishment of local data centres is an exciting time for South African businesses.

Cloud will play an instrumental role in the digital migration journey and enabling local businesses to improve their models, be disruptive, heighten competitiveness and improve their bottom lines, Poulter and Meggerse state.

“Software licensing need not hinder this process and the right partner can fast track businesses to achieve their digitisation goals,” they conclude.

[Image – Photo by Taylor Vick on Unsplash]