Reduced government grants and funding, as well as diminishing private-sector budgets, continue to put the UK housing sector under considerable pressure, with this all being played out against the backdrop of increasingly rigorous regulation. As housing costs and the management of available stock continues to captivate the media, providers in both public and private sectors want to cut spending and increase efficiency wherever they can. Digital transformation has already been a priority in other sectors for some time and is now high on the agenda within the housing sector too. As boardroom focus shifts to how technology can deliver savings, housings providers and local authorities’ IT teams are now faced with new challenges.
Whether developing a fully-online repairs service, replacing legacy housing management systems, implementing self-service, dealing with GDPR, enabling remote working or migrating to the cloud, IT teams have a myriad of issues to deal with. Most of these technology challenges hinge on something few outside IT and procurement departments are even aware of – software licensing. In recent years, particularly with the growth of cloud-based services, licensing for software applications has become an increasingly complex (but critical) task. As organisations look to digitally transform, understanding how the integration of new technologies and services impacts their licensing position will be essential.
Why licensing and cloud can prove a tricky combination
Most digital transformation projects will have some element of cloud computing to them. As with most digital projects, cost remains a ruling factor in getting projects started as well as determining the speed of progression once underway.
There is also an added element for the housing sector to consider when weighing up cloud solutions; one other cost that needs to be factored in, but often isn’t, are the consequences cloud has on software licensing agreements. Many licensing terms on the computing infrastructures of housing providers and local authorities are more suited to the era when most deployments were on-premise, despite still being used commonly in the sector. For example, many End User Licensing Agreements (EULAs) prohibit the use of software in a third-party or public cloud environment, meaning providers can quickly find themselves non-compliant, having to repurchase licences at significant extra cost.
Moreover, moving to the cloud can alter the licensing position of custom-built applications. This is particularly relevant to housing providers as many will have bespoke housing management systems or may have already rolled out a self-service platform or an online repairs portal. A move to the cloud will not only have a potential impact on performance (an organisation with an application built in-house may need to re-architect it to perform correctly in the cloud), but where this application was previously ‘sitting’ on a single owned server, it is now likely to be in a dynamic environment comprising virtual machines across multiple locations, all of which have different licensing considerations.
Overcoming the obstacles
For many housing organisations, the software licensing and cloud complications outlined above are magnified by the size of their organisation and the different types of user the IT team provides services to – whether employees, contractors or tenants. With a substantial, nationally-dispersed workforce, the number of licences needed can often restrict large organisations. This means that, for IT teams, it can be tricky to justify to the board the potentially large outlay cloud migration can involve, especially in an era of belt-tightening.
However, there are steps that housing providers can take to ensure that overspending is removed and costs are comparable to make digital transformation a little bit easier. The extra flexibility and business-level SLAs major cloud system solutions provide should not be undervalued, nor should access to fully up-to-date versions of software.
Housing providers can conduct a full software audit to get a clear idea of the number and types of licences required and carry out pricing exercises to switch on-premise licences for cloud-based ones. In many cases this is best achieved by engaging with a third-party, experienced in decoding intricate licensing agreements. This solution is beneficial because complex software agreements can be a barrier for even the most experienced IT teams. Ultimately, we should treat software as a strategic asset in any digital transformation and cloud computing initiative.
Kate Maughan is head of member engagement for the Northern Housing Consortium, and Chris Bartlett is the business unit director for the public sector at Comparex UK.