Hi
Yes it will be encrypted on tapes with software encryption.
Software encryption encrypts at the Disk Agent level, so right at the begining. Data stays encrypted on the wire and then on tape. This correspond to the licenses you bough. So it protects your data during transport and on storage.
Hardware encryption encrypts data when it arrives in the drive. It protects your data only on storage, not during transport. This is not subject to license in DP.
You might also consider Encrypting Commands and Control. This is the commands from Cell Manager to clients and backwards. This protects the command traffic, not data. This is not subject to license in DP.
Regards
JM