Stuart Charlton's session at Cloud World 2009 in San Francisco.

1. Software Licensing in the Cloud Stuart Charlton Chief Software Architect, Elastra Automating application Infrastructure

2. Objectives Put simply, given Cloud Computing,is there still room for a software product industry? Where are the problems with today’s licensing regime? What opportunities arise with cloud computing to improve the licensing situation? How could we resolve technical barriers to software licensing in the cloud? 2

4. Automated Provisioning

5. Elastic Infrastructure

6. Virtual Data Centers

7. Pay Per Usage

9. Redundancy

11. Composable Units

13. Optimize Resources

14. Decouple the Physical3

15. New Powers of Governance Software Units Compute Units WebLogic Oracle DB Groups & Chargebacks Groups & License Use Apps & Quotas Utilizations &SLAs Dashboards Encourage Efficient Use Accounting Specify Policy Which Apps Used Which Resources? Metering and Chargeback Graphic View of Data Center Design & Use Trends of Consumption DetermineQuotas for Appsor Groups Allocate Resources by Price & Capabilities Prioritize Resource Costs to Business Priorities Restrict Excessive Consumption 4

16. The Cloud Provider Continuum “Supplier Ecosystem” “Retail Ecosystem” Closer to theDeveloper/User Closer to theSysAdmin/Ops Platform-as-a-Service Infrastructure-as-a-Service 5

17. “On Demand” Strains Traditional Licensing Growing numbers of infrastructure & services Give people “on demand” freedom, they’ll use it! A wide variety of licensing models Customized licenses are common with enterprises Rigid license enforcement policies E.g. tied to a single IP address / machine Services of all shapes and sizes From low-level infrastructure to full software systems Consolidation of enterprise software vendors “Wait and see” approach with cloud computing 6

18. Package & Payment Models Spectrum: As a Service Low footprint Revocable As a Product Higher footprint Perpetual 7

19. Pricing Models Traditional models still dominate E.g. Oracle’s pricing on Amazon EC2 A trending shift to perceived-value pricing 8

20. Information Asymmetry Enterprise software is largely a “market for lemons” Seller knows more than thebuyer Increased popularity of: Proof-of-Concepts Detailed RFPs Open Source On demand access 9

21. Enterprise Licensing & Maintenance 21% Annual Maintenance Fees The “Wrap and Roll” Vendor wants to make its quarterly performance Company wants to reduce itsspend “Let’s discount maintenance for 2 years” … and do it over again 10

22. The Enterprise Acquisition Process RFP-led or Strategic Sourcing Lots of Front Loaded Risk-Mitigation Purchase for peak demand up-front Large capital outlays 11

23. Popular and Growing Alternatives “Adoption-Led Acquisition” Try and buy Pay after a period Open source Pay for support and/or complements like indemnity “Agile Acquisition” Co-develop the requirements and architecture Growing with large-scale acquisition (e.g. government) 12

24. Acquiring Software in the Cloud Supports a wider variety of adoption-led scenarios E.g. On-demand doesn’t need to be open source Reduced capital and lead times for agile acquisition 13

25. Tech Challenges to a On-Demand Licensing License description There are a wide variety of forms & sizes Customization is common and expected with enterprises License enforcement & auditing How one be sure license are enforced? …or at least audited? Especially with fewer human barriers to access 14

26. A Sketch of a Solution Hyperlinked Cloud Modeling Describing Software, Architecture, and Infrastructure … Along with Entitlements! Cloud Entitlement Modeling Participating Roles Digital Identity and Authorization A Cloud Entitlement Reference Architecture An Entitlements Language 15

27. Hyperlinked Cloud Markup Languages Modular, layered, open-world, “connective tissue” for automated applications CONCEPT IMPLEMENTATION MARKUP DEFINE ECML EDML EMML EXTEND ELML 16

28. Cloud Modeling Bridges Collaboration Gaps Enterprise architects IT OPERATIONS Change & Configuration Management Standard Designs Application architects IT management Policy-Based Architectural Designs Auditing, Metering, and Planning End-to-End CollaborativeIT Service Model Automated Planning, Provision & Configuration Dev/qa teams Deploy & Configure Systems Code, Resources, & Builds SYSTEM ADMINS Test System Staging System Production System Enterprise Cloud Private & Public Cloud Resources 17

29. Cloud Entitlements – Participating Roles 18

30. Digital Identity and AuthorizationEssential Building Blocks for Interoperable Entitlements (Kerberos) (PKI) 19

31. Digital Identity and AuthorizationPossible Approaches or Standards SAML v2.0 Web Services and Web Browsers WS-Federation and WS-Trust Primarily for Microsoft Windows and Azure OAuth RESTful delegated authentication, growing at IETF FOAF+SSL Emerging Semantic Web approach to identity Mutual SSL Authentication Basic scenario, long history,relies on PKI trust 20

32. A Cloud Entitlements Reference Architecture 21

33. Entitlements Modeling A uniform Rights & Duties foundation is possible E.g. Open Digital Rights Language Beware Patents (includes standardslike XACML!) Cloud could use targeted, minimal, extensions for payment & accounting ODRL v2 Core Model 22

34. A Minimal Licensing Entitlements Language Example Rights: Provision Scale Quota Example Duties: Usage Audit Subscription fee 23

35. Summary Traditional Software Licensing is Under Strain On Demand Models change prevailing assumptions of what is static A full shift to “As a Service” models is not likely But the enterprise software industry must adapt Change business practices and/or Adopt enhanced technology to resolve license complexity 24

36. Thank You Stuart Charlton stuartc@elastra.com Automating Application Infrastructure