Curated by: Sergio A. Martínez

It’s not a secret that IT environments are getting more complex by the day, with every new product and application nowadays needing deployment across multiple clouds, data centers, and architectures, which makes optimization through multiple licenses and states an ever-increasing challenge. And that’s without mentioning that our current path to digitalization was sped up considerably after the COVID-19 pandemic pushed our need for software solutions further away.

Optimizing for licensing versus optimizing for performance: A complex IT puzzle

This complexity is such, that according to Flexera’s 2021 State of IT Visibility report, “less than 25% of IT leaders have complete visibility into their IT estates”, which is a mind-blowing fact once we digest it properly; it means that up to 75% of our current IT environments have unknown areas that pose a challenge to the development and implementation of many software solutions.

But why does this happen? 

The truth is, organizations today are under the pressure to drive more value from IT investments, and as a result, leaders are always looking for ways to optimize their IT estates, creating a very specific challenge in today’s software development, creating a situation where a company has to choose between optimizing for licensing and optimizing for performance. And this is key for the success of any project.

Performance Vs. Licensing

Keeping Your Compliance: The other meaning for “KYC”

As leaders look for ways to optimize their IT estates, they are challenged with choosing between optimizing for licensing and optimizing for performance. Each one has implications for the other, and without a holistic approach, organizations must choose where to focus their efforts”, explains this article published by IBM. In short, an organization should look to integrate applications (that is, “optimizing for performance”); however, since most third-party software charges a licensing fee to use them at business level, carefully weighing options that fit within budget (or “optimizing for licensing”) could make or break a project.  

So while it is important to optimize your software options for performance, choosing the applications, platforms, or software that best suit your needs it’s also important, and a balance must be struck between the two, understanding the advantages and disadvantages they bring. On one hand, when optimizing for licensing, leaders need to consider the type of license that is best suited for their business needs, how many licenses they need, and how they can get the most from them. A license from a big corporation like Oracle, for example, can charge up to 22% of the total price in licensing, so having multiple ones without careful consideration can be quite a hit to the bank account.

On the other hand, when optimizing for performance, leaders need to focus on how they can improve the efficiency of their systems and make them more effective, making financial considerations less of a priority, although it’s rare when an organization can do this without immediate concerns. So to make the best decision, leaders need to carefully weigh options and choose the path that will help them meet their goals.

Controlling your IT states

Nearshore and FinTech: Easier than you may think

Traditional Software Asset Management (SAM) and IT Asset Management (ITAM) help organizations to understand where licenses are deployed, how software is being used, what versions of software are deployed, and if license use is compliant. This approach yields substantial benefits, but does not provide mechanisms to optimize on a continuous basis”, continues the aforementioned IBM article about some solutions currently implemented.

The thing is, current IT environments are so complex, that manual intervention is often required to understand a system holistically, especially when critical data gets ‘siloed’ in specific IT states, making it unlikely to have a complete view of the organization. After all, it’s easy for a growing company to look for solutions in the short term, and end with critical data concentrated in an external platform, creating issues to distribute it properly if it doesn’t play well with the rest of the IT environment. For example, cloud technology that might be challenging to troubleshoot if errors or other issues occur.

What many [companies] don’t realize is that a software usage metering tool is just the first step, not the end-all and be-all, of managing these expensive software assets. The wide array of features and functionalities of software usage metering tools are only valuable if you know how to properly use them to accomplish your software license optimization goals.

So to facilitate the task of implementing better automation into a processes, organizations need to be very smart about the tools, platforms, and systems they adopt into their IT environments, giving weight to the pros and cons of licensing a more uniform product, what the company is trying to accomplish product and/or service-wise, and the best way to achieve a good outcome.

Combining license asset data and application performance data with intelligent automation gives IT leaders the visibility needed to optimize their IT estates while ensuring they remain in compliance”, concludes the IBM blog.

A solution in smart collaboration

As more and more organizations are outsourcing their IT needs to remain competitive, looking to optimize their spending and remain compliant with the license contracts without losing visibility into the entire IT estate, an answer can be found in Nearshore collaboration. With a Nearshore partner, an organization can gain visibility into their IT estate while optimizing their technology investments, getting the best of both worlds: the ability to remain compliant and the flexibility to optimize your technology investments.

This kind of collaboration can help simplify this systemic complexity by providing a single point of contact for all of their IT challenges by developing applications and products suited for their own context. The reason is that Nearshore development enables better collaboration between teams thanks to a close geographical location, and as a result, it’s a great way to combat the complexity of today’s IT environments. 

By working with a Nearshore partner, you can get the benefit of their expertise in managing complex deployments by making it easier to coordinate and manage projects, a great solution for companies that are looking to simplify their IT environment. The reality is that, as traditional workforces evolve, organizations to start investing in digital transformation efforts to keep up, and while the balance between licensing and performance is still an important consideration, choosing to develop internal tools and applications to reach a digital workplace is becoming more feasible thanks to the Nearshore model, which can help organizations fill skills gaps and reduce costs, 

However, it’s important to choose a partner that understands your culture and values, so while collaboration tools can help remote teams stay connected and aligned, they need to be used effectively. In other words, the workplace (as well as the IT environments that come along with it) is changing, and organizations need to be ready for it. So if you’re looking for a way to stay competitive in today’s digital world, and considering your options between optimizing and licensing, maybe Nearshore outsourcing is the answer you are looking for.

The Key Takeaways

  • Choosing a software application to implement in your organization requires a careful balance between optimizing for performance and optimizing for licensing.
  • Many of the bigger cloud-based service platforms can offer all the solutions you need, but the licensing costs, plus the risk of siloing information in an external system, could pose some issues in the long run.
  • However, depending on your needs and the size of your organization, opting to develop custom solutions that hit a performance target without getting tangled in too many licensing issues is possible by collaborating with a Nearshore outsourcing company.

Scio is an established Nearshore software development company based in Mexico that specializes in providing high-quality, cost-effective technologies to help you reach new heights. We have been developing since 2003 and our experience gives us access not only to the knowledge but also the expertise needed when tackling any project. Get started today by contacting us about your project needs – we’ll be happy to help you achieve your business goals.