A recent Flexera Software survey, prepared jointly with IDC, finds that a significant proportion of enterprises’ software spend is associated with unused software, commonly referred to as ‘shelfware’. More than half (56%) of the enterprises polled said that 11% or more of their software spend in the last 12 months is associated with unused software - clearly wasted expenditure.
An earlier survey, confirmed that software over-use, or non-compliance - is also creating waste in the form of software licence audit ‘true-up’ (software used, but not paid for) penalties.
While corporations are leveraging software to improve efficiency, shelfware and non-compliant use are IT blind spots. With software licences and maintenance typically representing one third of overall IT budgets, if optimised, corporations can save up to 25% of their software spend by eliminating shelfware and non-compliant software use.
Below is a list of the most common mistakes organisations make:
- Making ad hoc purchases - Lack of controls over software purchases is common and leads to over-buying when end-users buy software directly, rather than purchasing centrally under a volume purchase agreement.
- Not fully leveraging Global Enterprise Agreements—Over-buying occurs when, for example, software is purchased under a regional Agreement when the same software is available under a corporate global Enterprise Agreement.
- Not tracking installation and use - By not tracking installations of software and its usage, organisations unnecessarily pay maintenance.
- Not tracking and analysing detailed usage data for certain types of licences—Not optimising concurrent and named user licences due to lack of analysis to determine the optimal number and type for each user respectively, results in over-buying.
- Not tracking renewal dates - Failing to keep track of software licence agreements and renewal dates makes organisations vulnerable to lapses in maintenance, which can prove costly.
- Lack of communication between departments - IT operations often don’t work with procurement to ensure that software is installed and used in accordance with the entitlements, causing licence compliance issues.
- Not purchasing maintenance at the right time - The right time to purchase maintenance is when organisations are expecting to upgrade and a new release of the software is expected during the term of the maintenance agreement.
- Not ascertaining strategic requirements - Lack of a corporate policy to define/manage approved products and standardise results in support cost and curtails the benefits of economies of scale.
- Not applying product use rights - Product use rights define how software licences can be consumed. Without applying these, enterprises are unable to optimise licences and accurately ascertain if indeed more licences are required or not.
In light of these common mistakes, and the significant risk and cost associated with them, the following best practices are recommended for any organisation seeking to minimise software spend and maximise use of existing licences:
Define Software Licence Optimisation Policies
It’s critical to define and implement asset and licence optimisation policies throughout the business. This means that there must be specific policies on every aspect of licence management, with an aim to reduce costs and limit the business and legal risk related to the ownership of software.
Focus on the Major Software Publishers
Businesses should focus their software asset management and licence optimisation efforts on the highest value and highest spend applications—as these pose the most risk of software audits. A true-up with one or more of these represent one of the largest potential unbudgeted expenses if businesses find themselves out of licence compliance.
Carefully Monitor Virtual Environments
Software licensing is often under-managed in virtualised environments. The risk of licence non-compliance is greatly increased in virtual server environments because:
- It’s easy to create and move new virtual machines running copies of operating systems and software applications;
- Publishers’ licensing rules for virtual environments add significant complexity to the already complicated task of managing software licences.
Automating software licence optimisation is the only way to manage virtual environment licence complexity.
Understand Software Publisher Licence Rules and Product Use Rights
Software use rights can significantly impact an organisation’s licence position. Simply put, product use rights define where, how and by whom a piece of software can be installed and/or used. Businesses should take full advantage of use rights, including their rights to upgrade, rights of second use, virtual use, etc. Equally, it is crucial that software usage restrictions are understood to stay in compliance.
Fundamentally, the complexity of licence management is further increasing with virtualisation, cloud computing and mobility. Enterprises must adopt software licence optimisation as a discipline by implementing technology - it automates the process of collecting data and applying licence entitlement rules across vendors and licence models - to generate an optimised position.
Posted by Jill Powell, Client Services Director, Flexera Software
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