Managing Engineering Software vs. Business Software

Introduction to Software Management Challenges

Managing software licenses effectively is a critical task for organizations, but the requirements for engineering software (e.g., CAD, CAE, EDA, PLM) and business software (e.g., Microsoft, Adobe, Oracle, CRM) differ significantly due to their unique characteristics and usage patterns. Treating them as interchangeable risks inefficiencies, compliance issues, and missed cost-saving opportunities.

This white paper examines the distinct management challenges of engineering and business software and presents TeamEDA’s License Asset Manager with Usage Monitoring (LAMUM™) as a tailored solution for engineering software license management, monitoring, and optimization. Addressing these differences for organizations can optimize their software investments and ensure operational efficiency.

Engineering Software: Characteristics and Management Needs

Engineering software, including Computer-Aided Design (CAD), Computer-Aided Engineering (CAE), Electronic Design Automation (EDA), and Product Lifecycle Management (PLM) tools, is essential for engineering departments. These tools are costly, with per-seat prices ranging from $1,500 to $100,000, averaging around $10,000. For 100 engineers, annual spending typically reaches $250,000 (approx.), making cost optimization critical. LAMUM can reduce these costs by 15–25% annually through effective management practices.

Key Characteristics

Cost: Varies based on functionality, value, and competition, with prices significantly higher than most business software.

Purchase Method: Typically sold on an annual subscription basis, with opportunities for annual remixing to adjust the number and type of licenses.

Licensing: Predominantly floating (concurrent-use) licenses, managed by daemons (license managers) like FlexLM (the most common, used by ~75% of engineering software), DSLS, Reprise (RLM), or LM-X. Floating licenses allow sharing, like books in a library, but are limited to a fixed number of concurrent checkouts (e.g., 5 licenses allow up to 5 simultaneous users). Exceeding this limit results in denials, which must be tracked.

Restrictions: Include Global or WAN (wide area network), LAN (local area network), node-locked, or user-locked licenses. Node-locked licenses are the cheapest, followed by LAN, with WAN being the most expensive due to broader access. Balancing cost and availability is critical.

Vendors: Engineering departments often deal with 20–30 vendors or resellers, requiring meticulous tracking of contracts, contacts, terms, renewal dates, and license keys.

Usage Monitoring: Essential for optimizing license use, preventing hoarding, and ensuring availability. Key reports include:

Current Checkout Reports: Real-time data on license usage.

Historical Usage Reports: Analyze trends and peak usage over time.

Top 10 Users Charts: Identify heavy users.

Denial Reports: Track true vs. false denials to assess availability.

User and Group Usage Details: Provide granular insights.

Zero-Usage Reports: Highlight unused licenses for potential savings.

Chargeback Reports: Allocate costs based on usage to charge back to departments, managers, cost centers, programs, or projects.

On-Demand and Batch Reports: Offer flexibility for click and view or delivery with weekly, monthly, or custom periods.

Management Needs

Handle Multiple License Types and Daemons: Support various license types (floating, node-locked) and daemons across multiple license servers and locations, including secured (firewalled, air-gapped) areas.

Prevent Hoarding: Monitor and report long checkouts and duplicate checkouts to promote efficient license use.

Automated Alerts: Include daemon-down, capacity threshold, long checkout, and feature license key expiration alerts to proactively manage issues.

Vendor Management: Centralize and share vendor information, contracts, and renewal data to streamline operations.

Compliance: Ensure adherence to license restrictions (e.g., WAN vs. LAN) to avoid audit penalties.

LAMUM addresses these needs with an extensive, web-based solution that tracks license usage, manages vendor data, and provides actionable insights through detailed reporting and alerts.

Business Software: Characteristics and Management Needs

Business software, such as Microsoft Office, Adobe, Oracle, CRM, and manufacturing applications, differs significantly from engineering software in cost, licensing, and management priorities, relying on subscription-based licensing, emphasizing compliance and inventory control over usage optimization. Annual spending can reach $2.5 million for large organizations due to enterprise-wide licensing needs.

Key Characteristics

Cost: Typically, lower per seat than engineering software, but the total cost is higher due to the larger number of seats. Enterprise packages (e.g., 1,000 or 10,000 seats, or unlimited) are common, with costs potentially reaching millions annually.

Purchase Method: Subscription-based licensing is prevalent today and based on cost per user from basic cloud-based offerings to premium desktop editions.

Licensing: Due to the dominance of subscription-based licensing, a named-user model by email address is mostly used.

Restrictions: Based on a named-user model authenticating with a username based on the named-user’s email address.

Vendors: Typically involve a few large vendors (e.g., Microsoft, Adobe) and no resellers, with contracts managed at a high corporate level, simplifying vendor information management.

Usage Monitoring: Less critical, as the focus is on ensuring every employee has access rather than optimizing usage.

Management Needs

Agents or Network Spiders: Network monitoring tools audit active subscriptions across devices to verify compliance with named-user models. This tracks user activations by email address, preventing unauthorized use and audit penalties.

Inventory Management: Inventory management tracks subscription licenses, user assignments, and renewal dates to avoid overprovisioning.

Compliance Reporting: Compliance reporting validates subscription assignments to mitigate audit risks and penalties, providing detailed reports on user activity and license status for seamless compliance.

Centralized Licensing: Centralized licensing manages cloud-based subscriptions via vendor portals, a unified dashboard for real-time oversight. This ensures compliance and optimizes license allocation.

Business software management focuses on compliance and inventory control rather than usage optimization, making tools like network spiders essential. Moreover, subscription-based business software requires robust compliance and inventory management.

Why LAMUM is the Optimal Solution for Engineering Software

Engineering and business software require distinct management approaches, and assuming a one-size-fits-all solution is a costly mistake. Business software management tools lack the specialized features needed for engineering software, such as:

Understanding different license daemon types (e.g., FlexLM, RLM, DSLS).

Generating current checkout, usage, and denial reports.

Creating checkout and denials heatmaps or concurrency graphs.

Analyzing zero-usage, averages, or denial patterns.

LAMUM, developed by TeamEDA over 16 years with 10,000+ hours of refinement, represents best practices in engineering software management and evolving based on customer feedback. Unlike business software tools, LAMUM is tailored to handle:

Multiple license types, daemons, and servers across various locations.

Detailed usage reporting, including heatmaps, concurrency graphs, and zero-usage reports.

Automated alerts for proactive management of denials, capacity, and expirations.

Comprehensive vendor and contract management for unlimited vendors/resellers.

Compliance tracking to ensure adherence to license restrictions.

Attempting to replicate LAMUM in-house is inefficient, requiring a significant amount of time, expertise, and resources that most organizations lack. The cost of development far exceeds LAMUM’s price, and ongoing maintenance, documentation, and developer turnover pose additional risks. LAMUM is easily implemented, cost-effective, and pays for itself quickly by saving 15–25% on engineering software costs.

For organizations seeking to minimize costs, ensure compliance, and optimize license availability, LAMUM is the definitive solution. It is not a business software management tool and should not be replaced by one, as their requirements are fundamentally different. Nonetheless, when it comes to engineering software license management, LAMUM comes in very handy and is a practical tool to utilize.

About TeamEDA, Inc.

TeamEDA, Inc., headquartered in Derry, NH, specializes in integrated software licensing management for engineering applications. With its proprietary License Asset Manager with Usage Monitoring (LAMUM™), TeamEDA combines asset management and usage monitoring into a best-in-class solution. With 16 years of expertise, TeamEDA delivers tools that maximize efficiency, reduce costs, and ensure compliance. Learn more at teameda.com.