A License to Print Money (Lowering software license costs from waste)

This is a guest post by Sumir Karayi, CEO of 1E

In the United States alone, there is more than $12.3 billion worth of preventable and ongoing costs associated with unused software and shelfware.

My company, 1E, recently commissioned independent research on software waste in association with the International Association of Information Technology Asset Managers (IAITAM) and the Federation Against Software Theft Investors in Software (FASTIiS), surveying more than 500 IT professionals, each responsible for managing software licenses at companies with more than 500 employees – and what we found astounded us.

View a quick overview of the high-level findings here:

Audit Anxiety

Our research findings reveal that when managing software licenses and assets, most organizations in the United States focus on compliance, rather than on controlling costs.

This is particularly true given the potentially damaging results of failing a vendor audit – heavy fines, substantial back-charges and the threat of legal action. When coupled with the time and complexity involved in comparing the amount of software being used with the amount being paid for, it becomes easier for many organizations to over-provision licenses “just in case.”

However, by focusing solely on preparing for an audit, organizations are buying ever-increasing amounts of software, ignoring the very real danger that much of it will never be deployed, never be used and never add any value.

Unused Software

There are many scenarios that can lead to software licenses being installed but not used. Licenses may be allocated to users based on their department as opposed to their need, they may be bundled together by the vendor, or users may be given software for a specific need or role when they first join the company that is never reclaimed. Whatever the reason, unused software is a significant drain on IT budgets – on average costing organizations $415 per PC.

Shelfware, as its name suggests, is software that is left to sit, undeployed on the proverbial shelf in a forgotten corner of the IT department. But even though it remains undeployed, shelfware still incurs maintenance and support charges.

Through this research, we have found that shelfware costs every organization in the United States approximately $155 per user per year. The challenge with shelfware is that, though widespread, it can be hard to find in most organizations. Traditional systems management tools can only detect software that has been installed, so many organizations are aware of the problem of shelfware but unable to do much about it.

A Missed Opportunity

When asked directly, most senior managers accept that there is software waste within their own organizations. More than half admitted they had software waste and nearly one-third (29 percent) admitted that they have no way to quantify the problem.

More than 80 percent of respondents agreed that there was more than $100 worth of waste per PC. Additionally, the majority of organizations (77 percent) have never reclaimed any unused software licenses.

Uninstalling unused software and redeploying wasted licenses would significantly drive down costs and deliver a better return on investment from existing assets. Yet despite the obvious benefits of software license reclaim and the staggering cost associated with unused software and waste, three quarters of organizations have never done it.

Almost half (48 percent) of respondents said that they had considered actively uninstalling and redeploying licenses, but that they are unable or unwilling to take the next step. Reclaiming unused software would mean that many organizations would be able to avoid buying new licenses until they actually need them, which could have very real financial impact on the value they get from their software.

The Financial Imperative

As organizations are so concerned about software vendors’ audits and compliance, they often overlook the huge waste involved in shelfware and unused software. This anxiety, coupled with the complexity of software licensing, is generating significant inefficiency and waste. These costs are largely preventable, though unfortunately, few organizations truly realize how much money can be tied up in software waste and how much money they could be saving.

Unfortunately, merely detecting unused software and shelfware across a myriad of systems, locations, PCs and servers presents a very real challenge for most, never mind reclaiming and reusing those licenses. In fact, 71 percent of those surveyed felt that software asset management is overly complex. This is perhaps not surprising, given the complicated nature of software license agreements, bundled license and maintenance deals and the general vagaries of product names, versions and editions.

My company, 1E, provides IT efficiency solutions that help organizations identify, financially quantify and eliminate software waste. By leveraging innovative efficiency tools, organizations are empowered to only use – and pay for – the software and licenses they truly need.

These findings reveal that the problem of waste is likely to get worse if organizations don’t focus on managing their software assets more efficiently. There is a clear financial imperative for every organization to do so.

To learn more, please click here or contact us directly.