© 2003 Deloitte & Touche – Not to be used or reproduced without Deloitte & Touche’s permission Software Asset Management Managing IT Investments Software Asset Management Microsoft Licensing Insights 11, 13 & 14 March 2003

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Software Asset Management - SAM Overview of topics covered:  What is SAM and what does it mean to me?  How to implement a SAM program and manage your software efficiently  Eliminate unnecessary IT spending – Microsoft Volume Licensing best practice

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Grants owner the legal right to use or access a software program Grants owner the legal right to use or access a software program Usage governed by vendors license agreement and copyright law Usage governed by vendors license agreement and copyright law Intellectual property copyright remains with the vendor Intellectual property copyright remains with the vendor What is a software license?

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Why invest in IT? Expedite achievement of business goals Work faster + Improve quality + Minimise cost = Competitive Advantage

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Software Asset Management Comprehensive approach to improving ROI Two focus areas: Minimise costs and investments; and Meet and exceed business requirements

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Total Cost of Ownership The Costing Model Only 12% of the total cost spent on s/w and h/w 18% 20%100% 24% 18% 2% 6% 12% Support Mgt HW/SW Dev Comms End user Down time TCO

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Early SAM Attempts Set of procedures to identify usage Ignored financial/contractual/technical details å Why did early attempts fail? SAM was seen purely an IT issue Lack of consideration of the needs of the organisation as a whole -> SAM should touch every part of your organisation

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Upper Management When administered intelligently: Promote communication and coordination Provide performance criteria Defines responsibility Force planning Key Players

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Purchasing & Accounting Procurement Record keeping Accounts Payable (AP) Q: Can AP determine whether to pay invoice? ? Is the vendor honouring all Terms&Conditions ? Maintenance contracts been approved ? Agreement cancelled Key Players

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission IT administration/help desk Negotiate better licensing deals Improves decisions on upgrades and support Assist with deployment Proactive not reactive Maximise help desk services Key Players

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission End Users Defines end user vs IT responsibilities Educate on IT policy and procedures Gives an insight into IT Strategy Promote consistency with the end-user Why did we upgrade? Key Players

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Why is SAM important? License Compliance Vendors normally view unintentional misuse sympathetically Must demonstrate compliance efforts Intentional non-compliance not tolerated The Cost  Public embarrassment  Substantial financial penalties  Personal liability for company directors

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Why is SAM important? Decrease Risks: Acquisition Risks ­Unauthorised purchase of licenses ­Licenses purchased but not readily locatable ­Overpayment of license fees

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Why is SAM important? Distribution/Deployment Risks ­Lack of control over where software is installed ­Unauthorised duplication of software Monitoring & Reporting Risks ­Software usage is outside license conditions ­Under licensed products ­Over licensed products

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission SAM Pitfalls Purchasing an electronic monitoring tool without a SAM program in place ‘Silver bullet’ solutions SAM efforts are likely to stall

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Recommended Approach Assess your own circumstances Look to a phased implementation Adopt the most appropriate elements as everybody is different: Small Business Multi National Public Sector Private Entity

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Developing a SAM program Phase One Planning and Budgeting Define responsibilities Phase Two Establish Procedures Procurement Deployment Management Phase Three Develop Policy Phase Four Employee Education Phase Five Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Planning and Budgeting Identify business objectives Assess infrastructure needs Identify existing resources Research available opportunities Capture within budget

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Planning and Budgeting A comprehensive budget should incorporate: – Hardware & software – Training – Development – Management – Support – Downtime Support Down time Management Training HW/SW Comm/Dev

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Define Responsibilities Contractual: Master - Enrollment holder Who is responsible for: Implementing SAM Planning & budgeting Monitoring compliance Developing SAM policy & procedures Appoint a software manager? ‘Sends a strong signal’

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Developing a SAM program Phase One Planning and Budgeting Define responsibilities Phase Two Establish Procedures Procurement Deployment Management Phase Three Develop Policy Phase Four Employee Education Phase Five Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Establish Procedures

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Procurement Through normal purchasing channels – How much does it cost to raise a PO? – What is the most cost effective process? Formalise the process - eliminate historical questions Avoid reconstructing license parentage - difficult without good SAM Buy from a respectable Microsoft Reseller Visit: &

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five CASE STUDY Decentralised construction company No clear procurement policy; purchases also on decentralised level. Purchase of FPP, Open Over-licensed on several applications, under-licensed on Office pro Procurement

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Q: How can we address this? A: Invoice verification Have all IT related invoices forwarded to IT dept prior to payment As process evolves develop a link with accts payable Procurement

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Deployment Access to software is limited Authorisation for loading is defined Product to be loaded is clearly stipulated Software register updated once installed Home usage is managed Disposal of old media controlled

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Management Pitfalls Use of spreadsheets or small custom built database Process almost guaranteed to fail as it becomes to complex and onerous

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Recommendation Look to a dedicated ownership management tool capturing: - What was originally paid - Recurring costs - How and where was it acquired - H/w & s/w interdependencies - OEM - Reference to software license library Management

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Establish good record keeping systems ­Hardware Inventory ­Software in Use Inventory ­License Inventory ­Media Inventory Management

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Management CASE STUDY European Media group Suspected of being uncompliant LAR had system problems 30% of licenses under wrong contract.

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Q: How can we address this? A: Reconcile PO to invoice and license confirmation Why adopt this type of approach? – Physical deliverable to control payment – Reseller focuses on processing as payment depends on it – More efficient than a macro level assessment – Identifies errors close to when they occur Management

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission What is my ‘Proof of License’ ? Acceptable ‘proof of license’ is determine by the method in which the software was procured. For example: ­Retail/OEM product: Certificate of Authenticity (COA) ­Volume licensing product (Select/Open): On-Line license confirmations   Purchase Orders   Invoices   Reseller confirmations What does not constitute Proof? Phase One Phase Two Phase Three Phase Four Phase Five

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Proof of License for Retail Products As of the Launch of XP Prior to XP Phase One Phase Two Phase Three Phase Four Phase Five

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Proof of License for OEM Products Operating Systems Applications Phase One Phase Two Phase Three Phase Four Phase Five

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Proof of License for Volume Purchases Open Select and Enterprise Phase One Phase Two Phase Three Phase Four Phase Five

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Historical Proof of License for Select (prior to e-License) Phase One Phase Two Phase Three Phase Four Phase Five

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Developing a SAM program Phase One Planning and Budgeting Appoint a S/w Manager Phase Two Establish Procedures Procurement Deployment Management Phase Three Develop Policy Phase Four Employee Education Phase Five Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Develop Policy Need to address: - Planning- H/w and s/w retirement - Acquisition- License Documentation - Installation- Version Control - Compliance- Auditing -.-. Policies should have threat of disciplinary sanctions associated with them.

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Develop Policy Signed by all employees and contractors Made a condition of employment Documented on the Intranet

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Developing a SAM program Phase One Planning and Budgeting Appoint a S/w Manager Phase Two Establish Procedures Procurement Deployment Management Phase Three Develop Policy Phase Four Employee Education Phase Five Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Employee Education Target education at all employees Program should: - Explain s/w code of ethics and SAM policy - Discuss s/w piracy and why it’s a problem - Explain the hidden costs of illegal software Combine with other IT related issues Backing up user data Internet and use Security

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Developing a SAM program Phase One Planning and Budgeting Appoint a S/w Manager Phase Two Establish Procedures Procurement Deployment Management Phase Three Develop Policy Phase Four Employee Education Phase Five Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five An assessment to determine compliance Internal or external Should be regular - at least annually Use of a discovery tool Provides second half of the data needed Redeploy assets not being utilised Remedy any under licensing Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Phase One Phase Two Phase Three Phase Four Phase Five Selecting a tool Limited list of tools Not an endorsement GASP 5 SuiteSMSExpress Software Manager ZenWorksPC ProfileMSIA (Microsoft) Self Assessment

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission MSIA Report Example

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission One Minute SAM Take Away SAM is a process not an event Should touch every part of your organisation Avoid ‘silver bullet’ solutions Look to a phased approach Financial, contractual and technical data just as important as usage data

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Software Asset Management - SAM Overview of topics covered:  What is SAM and what does it mean to me?  How to implement a SAM program and manage your software efficiently  Eliminate unnecessary IT spending – Microsoft Volume Licensing best practice

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Microsoft Licensing Specifics Software Assurance Client Access Licenses (CALs) –Per Server / Seat / Processor –Internet Connector –Core CAL Select The Open License program

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Software Assurance Focused on: Streamlining administration Reducing acquisition costs Correcting former inequities Product implementation and security Predictable budgeting Promoting program consistency

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Streamlining Administration Eliminates the need to maintain numerous license confirmations Replaces a confusing collection of upgrades –Version Upgrade – Competitive Upgrade – License – Product Upgrade – Software Assurance – Language Upgrade – L+SA – Upgrade Advantage

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses (CALs) Key Points: Needed to access server software with another device eg. PC, workstation or terminal Is not software! It ’ s a legal document that grants access to the services of the server Is a separate license and is not part of any operating system eg. Windows 95/98 or NT

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses Per Server Per Seat Per Processor Internet Connector Core CAL 5 options for licensing server clients:

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses Per Server Only Windows 2000 Server CAL Server License

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses Per Seat Server License Server License Windows 2000 Server SQL Server 2000 Exchange 2000 System Management Server 2.0 Microsoft Mobile Info Server SharePoint Portal Server CAL

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses Per Processor Host Integration Server 2000 Internet Security Acceleration Server 2000 BizTalk Server 2000 Application Centre 2000 Commerce Server 2000 SQL Server 2000 Microsoft Operations Manager Vendors Partners Customers Internet Firewall Internal Clients Processor License

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Client Access Licenses Internet ConnectorsInternet Connectors Internet Connector License Customers InternetFirewall Provides access to an unlimited number of anonymous users over the Internet

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Core CALs License server components across all desktops within the firewall Includes a CAL for: –Windows Server –Exchange Server –System Management Server –SharePoint Portal Server Core CALs sold with Software Assurance attached Clients will always be licensed regardless of the server version deployed

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission OEM Licensing No additional license needed to use older version operating system if OEM is Windows XP Pro However, end users may not: -Use multiple versions simultaneously -Transfer Windows XP Pro to a 3rd party Restrictions on renting and leasing removed from Windows XP Pro EULA Network installation now permitted – supports implementation enhancements in Windows XP

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Programs Benefits: Instant access to software Instant access to software Easy to understand Easy to understand Valuable investment Valuable investment Broad range of software titles available Broad range of software titles available Convenient license acquisition Convenient license acquisition eSelect electronic license delivery eSelect electronic license delivery Microsoft Select

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Open Subscription License 4 different Open License flavours: ­Open Business: Initial order minimum of 5 licenses ­Open Volume: Initial order minimum of 150 pts per pool ­Open Subscription License (OSL) See next slides ­Multi-year Open (MYO) See next slides

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Open Subscription License Requires minimum of 5 pc’s Facilitates standardisation: ­Microsoft Office Professional ­Microsoft Windows Professional upgrade ­Core CAL – can now select which components are covered During the time of the agreement your PC count may increase or decrease Annual payment Fixed rental price per PC at different Price Levels - based on your desktop count : 3 year rental period - buy out option at the end of the subscription Includes Software Assurance (L & SA) Multiple subsidiaries can purchase under the same subscription Faciliates ease of administration

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Multi Year Open - MYO Target Market ­Another option If you were planning to go for Open + SA ­Small / Medium Company wishing to standardise on one or more of the platform products – 5 to 250Pc’s Type of License ­Perpetual License ­Spread payments over 3 0% Finance ­SA Included ­Price cheaper after 3 years – can then buy SA only ­2 Types – Volume & Enterprise

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission eOpen eOpen - Electronic License Delivery Open License offers electronic license delivery, for tracking license confirmations eOpen allows you to: - View Open License information for one or more authorisation numbers - Create and retain personalised views of license purchase history information - View Open License purchases made in more than 180 countries

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission eOpen – screen shot

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission Questions you should ask yourself Questions you should ask yourself: – –How easy is it for your employees to copy software? – –Do you have standard applications in place? – –What software is being used? – –Do you have enough CALs? – –Do you have enough licenses for all the software in use? – –Does it all tally up (software licenses to software in use)? Consider: – –Software Assurance – –Open License Subscription Microsoft want to help

© 2003 Deloitte & Touche – not to be used or reproduced without Deloitte & Touche’s permission