How cloud drives changes to network licensing

Cloud computing continues to transform IT, forcing organizations to look at applications, development and networking in novel ways. The cloud brought with it new ideas and approaches about how to deliver value and drive efficiency.

NIST describes some of cloud’s key characteristics as the following:

On-demand self-service.
Broad network access.
Resource pooling.
Rapid elasticity.
Measured service.

These qualities have led organizations to embrace subscription-based, pay-as-you-go application licensing models. These models are made possible through the cloud’s ability to scale quickly and generate accurate service consumption data.
Cloud will continue to shape IT application management and licensing. Current subscription licensing models apply to end-user applications and network services, but future models will extend to software-defined networking (SDN) concepts.
Let’s examine how enterprises can manage network licenses for software that controls network traffic, security and monitoring.

Legacy licensing
For decades, perpetual licensing of both hardware devices and associated software ruled the day. Switches and routers have a basic — sometimes advanced — OS and a set of applications stored on firmware or flash memory. That software can be updated or reset to factory defaults, but it’s always specific to that piece of hardware. An organization with 10 switches then has 10 OSes and application platforms to manage — and 10 licenses that are good for the lifetime of the device.
It becomes more difficult to track licenses as the number of devices increases. In addition, software version control and patching are challenging and affect security. Security becomes more complicated because user access management is decentralized through port filtering or other rules. This can lead to inconsistencies that might appear in help desk tickets or security audits. Decentralized routing administration is even more complex.
Another issue with this legacy structure is hardware and software lifecycles that don’t sync. This is not cost-beneficial. To realize the benefit of a hardware or software version, organizations must often upgrade both components at the same time because they’re integrated into a single device.
Learning from other licensing methods
In the past few years, end-user application licensing has changed. Gone are the days of maintaining a unique license key for each installed copy of Microsoft Office or Adobe Photoshop. Modern application licensing relies on subscriptions.

One challenge for network management software vendors is determining how best to monetize their products in a world where services radically and quickly shift in the face of customer density, service availability and shared data center resources.

These subscriptions have the following attributes:

They’re easier to resize when the number of employees changes.
They’re easier to track for industry regulation and compliance.
They’re easier to track for predictable billing.
They move organizations toward Opex spending patterns instead of Capex for various parts of IT.

Microsoft Office 365 is one example of how end-user application licensing has shifted, and many other application vendors are following suit. Network management software is next, thanks in large part to SDN concepts.

An evolving licensing scheme
The transition in network licensing models reflects SDN’s fundamental composition: The decoupling of control and data planes. Older network hardware integrated these functions in each device, rendering them incapable of centralized configuration management.
The newer approach provides basic data plane functionality software on the hardware device — capabilities such as MAC address table generation on a Layer 2 switch — while offloading control plane services to a more centralized platform. Note that the simplified hardware components might cost less and require less attention than older devices because they contain only the data plane software for basic functionality.
Control plane software becomes a centralized management tool, capable of optimizing network functions across integrated on-premises and cloud-based networks. It accomplishes this through policy-based network management administered from a single console. Policy-based network management is easier, cost-effective, flexible and scalable.
One challenge for network management software vendors is determining how best to monetize their products in a world where services radically and quickly shift in the face of customer density, service availability and shared data center resources. Subscription licensing can resolve this challenge as well as provide tracking. Licenses are no longer perpetual nor do they apply to a single device with a particular firmware/software version.
To help organizations understand what licenses are in place and whether they are in compliance, network administrators can evaluate tools, such as blockchain, to manage license traceability and mapping.

Hints of the future
These changes to how companies manage network licenses are pretty radical, especially for organizations with older networks that have devices facing end-of-life. Adopting a subscription-based licensing model for the management software that drives switches, routers and other devices means changes to network budgeting, acquisition, administration and more.
Migrating from decentralized network device management to SDN requires careful design and planning, and that’s no different when managing network licensing and its associated expenses. Many of the best practices around subscription-based end-user software provide cues for managing the finances around network management licensing.

The shifting landscape
Cloud-oriented subscription-based licensing will continue to shape IT planning and spending. It’s easy to see how subscription licensing will become an integral part of network software deployments once organizations realize the benefits of SDN and the separation of the control and data planes.
Network devices will likely continue to ship with basic functionality for the data plane. But centralized network management software — or control plane — capabilities will continue to evolve.
Licensing for these network applications must reflect the cloud’s primary attributes of flexibility, scalability and metered use for pay-as-you-go cost management. The next article in this series will address these characteristics and provide key elements to plan for and illustrate what changes to expect.
Damon Garn owns Cogspinner Coaction and provides freelance IT writing and editing services. He has written multiple CompTIA study guides, including the Linux+, Cloud Essentials+ and Server+ guides, and contributes extensively to TechTarget Editorial and CompTIA Blogs.