Do you Trust your Usage Reports & CAD/CAE/EDA License Management Tools?

Introduction to License Management Challenges

Engineering software licenses for CAD, CAE, and EDA software are a significant investment, with costs ranging from $5,000–$10,000 per seat for CAD, $10,000–$20,000 for CAE, and $20,000–$50,000 for EDA, with some licenses reaching up to $100,000. Controlling these costs is a critical management priority. Effective license management requires accurate usage reporting and a robust tool to monitor and optimize license allocation. Inaccurate reporting can lead to overestimating usage, resulting in unnecessary purchases, or underestimating usage, causing shortages, denials, project delays, and unexpected mid-term true-up costs.

This white paper addresses the importance of accurate usage reporting for CAD, CAE, EDA, and related engineering applications (e.g., FEA, CAx, ALM, PDM, PLM, MBSE) and outlines the key elements of an effective engineering software license management tool. TeamEDA’s License Asset Manager with Usage Monitoring (LAMUM™) provides a comprehensive solution to these challenges.

The Importance of Accurate Usage Reporting

Accurate usage reporting is essential for optimizing the high costs associated with engineering software licenses. Overestimating usage can lead to purchasing more licenses than actually needed, wasting financial resources on annual maintenance or subscriptions. Conversely, underestimating usage can result in license shortages, denials, and project delays, potentially requiring costly mid-term adjustments. Getting it right from the start is crucial for managing these expensive assets effectively.

Unlike business applications, engineering software often uses floating license managers like FlexNet/Port@Host or over 15 other types, which traditional Software Asset Management (SAM) tools struggle to monitor accurately. Some organizations rely on manual methods, such as cross-referencing Active Directory group memberships with maximum license counts in license files or using Excel spreadsheets based on application managers’ intuition. These approaches are prone to errors and lack precision.

More mature organizations may develop in-house scripts or purchase specialized tools to monitor license daemons. However, creating custom scripts carries risks, including misinterpretation of data, which can overestimate usage by up to 150%. Such inaccuracies can lead to significant financial missteps. LAM tools like LAMUM, developed by TeamEDA 16 years ago, focus on delivering 100% accurate usage reports by monitoring license servers with a proprietary algorithm, ensuring reliable data for decision-making.

FlexLM Usage Reporting

FlexLM is the most widely used floating license manager, accounting for approximately 75% of CAD, CAE, EDA, and PLM software license checkouts. Accurate usage reporting with FlexLM relies on periodic execution of the lmstat command, typically every 10 minutes, to capture current checkout status. Properly interpreting and concatenating these results is critical to determining total checkout time. Incorrect interpretation can lead to overestimating usage, resulting in unnecessary license purchases.

LAMUM’s unique algorithm ensures precise interpretation of lmstat data, delivering 100% accurate usage reports.

Key insights provided by LAMUM in license optimization maneuvers include:

License Hoarding: Identifies engineers holding licenses longer than necessary.

Average Checkout Time: Tracks the duration licenses are held.

Concurrent Users: Reports the average number of concurrent users over any specified period.

Capacity Alerts: Notifies when all licenses are checked out.

Long Checkout Alerts: Flags licenses held beyond predefined limits.

Denial Threshold Alerts: Alerts when denials exceed acceptable thresholds.

For comprehensive asset management, LAMUM also tracks:

Vendor details and contacts.

License types (e.g., floating, node-locked, named-user).

Purchase and restriction types.

Responsible personnel.

Renewal dates.

Usage patterns and denial rates.

LAMUM provides on-demand “Current Checkout” reports by vendor daemon, feature/tool, or user, as well as detailed reports on reserved, borrowed, and queued licenses, enabling managers to make informed decisions.

Centralizing Entitlements and Contractual Data

Effective license management requires a centralized view of entitlements and contractual requirements. When purchasing new licenses or negotiating renewals, managers need historical usage data and forecasts to make informed decisions. Without centralized data, new managers may lack access to negotiation history, contractual documents, discount agreements, purchase orders (POs), payment schedules, or geographic entitlements, which may be scattered across IT systems or lost when personnel leave.

LAMUM addresses this by providing a centralized repository for all vendor and usage data, with configurable access permissions to ensure continuity. This allows new managers to seamlessly pick up where predecessors left off. LAMUM’s Renewal Tracking system includes automatic Renewal Alerts, recommending data collection 3–4 months before renewal (e.g., starting September 1 for a January 1 renewal).

This provides visibility into:

Current license inventory and usage.

Historical demand by engineer or group.

Future needs based on staffing levels and trends.

With this data, organizations can right-size their license inventory, eliminate unnecessary licenses, minimize denials, and negotiate better vendor deals. Some vendors allow quarterly remixing or rightsizing, and LAMUM’s usage and denial monitoring ensures readiness for these opportunities, potentially saving over 20% annually.

Ensuring License Compliance

Engineering software licenses can be node-locked, named-user, or floating (concurrent-use), with floating licenses being the most popular due to their shareability. Floating licenses may be restricted to LAN (local area network, e.g., a city, campus, or lab) or WAN (wide area network, e.g., country, continent, or global), with WAN licenses being more expensive. Node-locked or named-user licenses are less costly but less flexible.

Compliance with licensing agreements is critical to avoid costly software audits. For example, using geo-restricted licenses across state or international boundaries (e.g., sharing German licenses with an Indian server to resolve denials) can lead to non-compliance, resulting in significant penalties. LAMUM mitigates this risk by providing a holistic view of license assets, obligations, and usage through a proprietary three-point check algorithm. This ensures accurate tracking of:

License types and restrictions.

Vendor contracts and geographic entitlements.

Actual usage across servers.

By maintaining an accurate compliance overview, LAMUM helps organizations avoid audit risks and ensures adherence to contractual requirements.

Chargeback Reporting and Cost Allocation

Many organizations allocate licensing costs to individuals or groups based on usage, known as chargeback reporting. LAMUM supports both individual and group chargebacks by calculating usage as a percentage of total usage over a specified period. Managers can input license costs for a given timeframe, and LAMUM automatically distributes these costs across individuals or groups based on their usage percentage. This ensures fair and accurate cost allocation, enhancing financial transparency and accountability.

The Value of LAMUM for License Management

Managing engineering software licenses with tools like Excel spreadsheets can become unwieldy as license inventories grow. LAMUM simplifies this process by providing a comprehensive, accurate, and user-friendly solution.

Key benefits include:

Real-time visibility into license types, counts, and renewal dates.

Accurate usage and denial reports to optimize inventory and reduce costs.

Centralized management of vendor data, contracts, and POs.

Automated alerts for renewals, capacity issues, and denials.

Support for chargeback reporting and compliance tracking.

LAMUM’s proprietary algorithm and robust feature set make it an essential tool for engineering software license management, saving time, reducing costs, and improving productivity.

About TeamEDA, Inc.

TeamEDA, Inc., headquartered in Derry, NH, specializes in integrated software licensing management for engineering applications. With 16 years of expertise, TeamEDA’s LAMUM™ combines License Asset Manager with Usage Monitoring into a best-in-class toolset, ensuring accurate reporting and significant cost savings. Learn more at teameda.com.