When to Renew Software Licences at HPC Centres? A Mathematical Analysis

In this paper we study a common problem faced by many high performance computing (HPC) centres: When and how to renew commercial software licences. Software vendors often sell perpetual licences along with forward update and support contracts at an additional, annual cost. Every year or so, software support personnel and the budget units of HPC centres are required to make the decision of whether or not to renew such support, and usually such decisions are made intuitively. The total cost for a continuing support contract can, however, be costly. One might therefore want a rational answer to the question of whether the option for a renewal should be exercised and when. In an attempt to study this problem within a market framework, we present the mathematical problem derived for the day to day operation of a hypothetical HPC centre that charges for the use of software packages. In the mathematical model, we assume that the uncertainty comes from the demand, number of users using the packages, as well as the price. Further we assume the availability of up to date software versions may also affect the demand. We develop a renewal strategy that aims to maximize the expected profit from the use the software under consideration. The derived problem involves a decision tree, which constitutes a numerical procedure that can be processed in parallel.