The change in software use: cloud computing and used licenses

The IT industry is known for its rapid change - so the digital transformation also has a fundamental impact on the use of software. This makes it all the more important to look for cost-effective solutions that meet the growing needs for software.

Ongoing digitalization is fundamentally changing the way software is used. Above all, the introduction of cloud computing and the emergence of software-as-a-service raise the question of whether it is more advantageous to use software in the cloud or on-premise, i.e. installed on a stationary basis. This is not an easy question to answer, as both approaches bring their own advantages and disadvantages. Increasingly, an interesting alternative is emerging: the combination of both approaches.

Cloud computing: flexible but demanding

Users of cloud computing want to exploit the potential that the technology offers in certain cases. The ability to host software applications and data in a cloud creates flexibility and high scalability. Companies can thus deploy their resources in a targeted manner and adjust the capacities available in the cloud as needed. In addition, there is no need to maintain hardware infrastructures on site, which helps to reduce costs. Using the cloud enables easy access to data and software from virtually anywhere in the world and facilitates real-time collaboration.

Large enterprises in particular are adopting a cloud-first strategy, where the cloud is seen as the preferred approach to developing and deploying IT solutions. However, this strategy carries the risk of blind spots. Determining optimal licensing needs is challenging, and an incorrect assessment can lead to over- or under-licensing. The variety of payment models in the cloud, which vary depending on the type of use, also makes it difficult to control costs.

Often cloud providers are also software providers - so the decision for a software license often goes hand in hand with the decision for a cloud provider. If software from other providers is also to be used in the cloud, costs can quickly skyrocket. Another challenge in use: while on-premises software requires device-based licensing, cloud models involve user-based licensing with complex administration of the license via a cloud portal.

On-Premise: Legal certainty and price advantages

How can costs be kept as low as possible in this confusing web of licenses and prices? Part of the solution is pre-owned software. In addition to cloud computing, the demand for used software licenses has been growing steadily in recent years. Initial concerns about legal security have now given way and companies are recognizing the major price advantages of buying used licenses. Medium-sized companies are also considering the purchase of used software - often in parallel with the use of cloud subscription licenses. Many companies have an extensive IT infrastructure and want to leverage their existing investments. By installing applications locally, they not only retain control over their data, but can also protect it according to their own compliance requirements.

The generally growing demand for software applications and the price increase in the cloud segment contribute to the attractiveness of used licenses. Customers are becoming more aware of the high costs of subscription models and are recognizing the savings potential of used software. In addition, the used licenses can be traded in again at any time.

Used licenses can also be used in the cloud - with the only restriction that no subscription or rental models can be offered with the corresponding usage rights.

The best of both worlds: the hybrid solution

The most economical and beneficial way is to use hybrid licensing, which consists of used on-premises and cloud solutions. This is a strategy that future-proofs companies and makes them flexible and economically sound. Areas where locally installed software brings strategic and economic benefits can continue to be managed in-house, while areas where cloud products make more sense can be covered via cloud contracts. In this way, organizations can take advantage of the scalability and flexibility of the cloud, while retaining control over their sensitive data and allowing customization to be made.

On-premise or cloud computing? The strength lies in combining the two approaches. A hybrid strategy, using on-premise installation and cloud products as needed, offers the opportunity to meet the individual requirements of different areas while benefiting from the advantages of each.