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WHEN it comes to managing software licences and assets, most
companies focus on compliance rather than cost-cutting.
Organisations are
over-licensing, buying more and more software to err on the side of
caution. This can be an extremely costly mistake.
On the face of it, very few organisations have software
asset management strategies in place, exposing the company to considerable
financial risk. As long as software is bought and licensed legally, it’s
forgotten.
Very few organisations stop to detect unused software or shelfware
(that is never deployed to begin with) across the myriad of systems, locations,
PCs and servers- never mind reclaiming or reusing them.
Bundled deals, licence options and virtualisation have all
contributed to the complexity of software asset management.
Organisations are struggling to reconcile the software they have actually deployed with the software they have licensed.
Very few seem to know how much money and waste is
being tied up in their software and how much they could save by efficiently
managing their software licences.
Add to that the fact that software vendors
are becoming increasingly vigilant, clamping down through regular vendor
audits which result in heavy fines, substantial back charges and the threat of
legal action. (Virtually all agreements with software vendors stipulate that
they will have the right to audit at least annually.)
Fearing being caught with unlicensed products, many
organisations respond by buying even more software, ignoring the very real
danger that it will never be deployed, used or add value.
This results in
unnecessary costs as companies are still paying maintenance fees for software
they aren’t using or purchasing additional licences rather reallocating
existing ones.
Analysis conducted on a number of local organisations showed
that at least 20-40% of licences deployed are not being used – and definitely
not reclaimed.
In the USA alone, this represents $12.3bn in preventable and
ongoing costs, with a typical enterprise with 10 000 users using $4.1m
worth of unused software on PCs, costing $1.1m annually on ongoing
maintenance.
Disorganisation is another concern, particularly not having
a handle on what software is deployed in your organisation and how many
licences of that particular piece of software are deployed.
Typically,
organisations will purchase a number of licences, known as their licence
entitlement. However, when more than the
entitlement is deployed, they have to pay extra for the additional
usage.
This represents not only a
financial risk but also a reputational risk - to all intents and purposes,
this is construed as licence theft if not disclosed and procured.
CIOs should be asking themselves on a regular basis: what
do we own? What are we using? And of course, hhat do we really need?
By deploying licence metering and implementing tools like
1E’s AppClarity that provides the ability to reclaim unused applications in an automated fashion as well as a user-centric approach, companies can curb
their unnecessary costs dramatically.
Software asset management tools should also be deployed and
maintained to ensure that licence entitlement and deployment remain in synch.
The software efficiency report of 2011 showed that 52% of enterprises used spreadsheets to record software licences, 12% used paper-based filing systems and 12% used nothing whatsoever. Keeping track of licences is the key to remaining cost efficient.
In the end, there is no excuse for not having a software
asset management strategy in place – there is technology that will do it for
you.
This is a quick and effective way of eliminating software waste in the
company, while still safeguarding the organisation against a vendor audit.
*Tim James is the owner of sustainableIT and the distributor of 1E.
- Fin24
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