You're in the cloud: but how much of your license fees are you wasting?

By Gareth Meyer, Chief Operating Officer, Ultima.

With the rush to put workloads in the cloud and enable remote working many businesses signed up to costly cloud licenses to make it happen fast. They served a purpose and helped keep the lights on and enabled the wheels of business to continue through lockdowns and their aftermath. Now those same businesses are still paying for their cloud licenses, but in the majority of cases they aren’t utilising all the tool sets and solutions tied to those licenses.

Ultima estimates that over 70% of businesses are not taking advantage of the full suite of tools available to them with their cloud licences, which amounts to a huge waste of money. The result is that they are missing out on many benefits that would help increase their ROI and improve business productivity and outcomes.

So how can you make sure that you’re utilising your licenses effectively and taking advantage of the full benefits of those licenses?

How cloud licensing works

Cloud licensing has developed a bad reputation because it’s viewed as the reason IT teams are not achieving the huge savings that the cloud promised to deliver with it pay-as-you-go model. But this all comes down to the way that an organisation manages its cloud licenses. For example, vendors like Microsoft sell their cloud licenses per-user which seems straightforward. But once you add a per-operating system (OS) Windows license, and often a per-user software license, too, in the form of Office, suddenly you’re facing significantly higher pricing. Especially in comparison to a dedicated hardware model. Citrix on the other hand is charged per set of licences which can be shared between users – from any location. This has obvious benefits for global enterprises as well as SMEs.

Challenge of tracking cloud license usage

But there are other charges to consider too. Workspaces such as Amazon WorkSpaces and Microsoft Azure Virtual Desktop have lots of different back-end integration options and setting up and managing these services can be complex.

For the IT Manager, the challenge is to ensure that users are fully adopting their software licenses and subscriptions. If customers aren’t using project licences, for example the Microsoft 365 E5 suite or Teams for communication and collaboration, this all adds up to a large unforeseen cost.

We’re now living in a SaaS world which equals flexibility in the apps and services that we deploy. Working with a cloud specialist can provide the capabilities to take advantage of this benefit and allow you to realise the true benefit of the cloud.

When it comes to cloud subscriptions it’s all about getting value add as part of your suite. MSPs are constantly enhancing what the customer gets when deploying that full suite. Cloud success managers will report on what’s being utilised and can steer a customer when they’re at key renewal points. They have the ability to remove licences if they’re not being used and the customer can simply request it again if they need it. There are also analytics bolt-ons you can add to make the software more user friendly, which means there’s less demand on on-premise requirements.

Utilising licenses effectively can also have sustainability advantages. There will be a carbon reduction in terms of reduction of platforms deployed so you’re not wasting 70% of your workspace.

Managing gateways becomes complex in the cloud

Managing gateways is another huge challenge for IT managers, especially when dealing with multiple apps across different vendors. For a start, there are security challenges as the process of managing how each API gateway is set up - each with its own security and governance policies – becomes very complex to track and apply. If you’re not monitoring and tracing consumption through one solution, it can become very cumbersome to problem-solve and review security changes.

When this service is managed by a specialist, it essentially takes an element of pain away from the IT department. The gateways are replaced with virtual gateways that allow the IT Manager to maintain an access level. An MSP will then proactively monitor any security issues the customer may face.

Organisations are looking for a single vendor

We’ve seen a 97% migration to Microsoft 365 E5 which shows the demand for working with a single vendor. Customer’s no longer want 50 different products that one technology package can deliver. But there is a big cost difference between Microsoft E3 and E5, so a specialist will look to understand what your needs are and will work through what the full suite offers the organisation.

Working with a single vendor and deploying the full suite means not having to implement a multitude of platforms. By working with a cloud management specialist, you can see in a single plane of glass what’s being consumed, replacing legacy PBX systems and calling systems with modern collaborative technology, whilst gaining a better employee experience.

How can the current skills shortage be addressed in the cloud?

As we know, one of the key issues surrounding poor cloud adoption is the lack of skills. Gartner’s 2021-2023 Emerging Technology Roadmap said that the current lack of skilled IT workers is foiling the adoption of cloud, edge computing, and other technologies. And this was based on 437 global firms – for smaller enterprises the situation is even worse as they don’t have the resources to attract, train and retain cloud staff.

Working with a cloud management specialist, they will access a customer’s estate from a reporting perspective. However, this won’t grant them access rights so there’s no security issue in the estate.

Using CX methodology, the specialist can deliver advice when implementing platforms and best practice to get them up and running. If there is a specific time or skills shortage within the organisation it may be worth seeing if your cloud management specialist can consult on a project basis to deliver you through your cloud transformation journey.

Cloud workspaces are here to stay

Workspaces in the past were largely on-premise estates which essentially hinder your ability to scale as it’s a physical infrastructure – there is a limit to how much you can grow. At a recent Ultima ‘workspace in the cloud’ event – organisations were asked what their future strategy for remote working was. 9/10 responses stated hybrid ways of working – some of which were 100% remote whilst some were 60/40 splits. Today you can’t deliver a hybrid working model on-premise as you need certain applications sitting there available.

Consequently, workspaces such as Microsoft Azure Virtual Desktop and Citrix that are available anywhere and at any time are here to stay. Cloud licensing isn’t the necessary evil many see it for. If licences are utilised effectively, monitored and managed it will lead to a smoother cloud transformation journey, provide better ROI and improve business outcomes.


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