Recently 3 banks discovered software license over-spending of £50m, using iQuate’s network inventory tool set.  But in an industry where over-licensing is as common as under-licensing,  these savings are just the tip of the iceberg.

Over-licensing of software is common

There is a surprising volume of under-used and over-licensed software to be found in every organization. The result is that a majority of organisations are over-paying for software, often to the tune of 6 and 7 figures annually. Many more are running the risk of vendor software audits and consequent exposure to hefty back payments and fines.

Over 41% of UK businesses admit to wasting £1,000’s
every year through software over-licencing (IDC)

Managers target for software savings

Under pressure to cut costs, managers have turned their attention to bloated software budgets. Rather than waiting to be audited by a vendor, they are taking the initiative to first reconcile and then proactively cut licensing costs.

While vendors are anxious to draw attention to high levels of under-licensing the reality is that over-licensing is common in most organisations. Indeed, our experience shows that the likelihood of over-paying for licenses is greater if not equal to the likelihood of under-paying. Many are doing both.

Why is overspending so common?

How do so many organisations overspend on licenses? Well, here are some of the main reasons:

1. A shopping list approach to buying software – with  different business unit managers allowing end users to select the software they want regardless of needs, justification, or budget.

2. Hardware gets retired, but the software licenses remain, with Gartner research suggesting that 20% of software licensing charges being incurred for assets no longer in use.

3. Licensing slide – daily activities throughout the organization can give rise to unanticipated license costs, for example:

- Software is downloaded, for example Oracle on a trial basis
- New users are added to an end application
- Applications are ported to new machines with different processors

4. Concerned about the risk of a software license audit, managers over-compensate and tend towards over-buying licenses so as to avoid surprises

5. Software is bought, particularly in the context of major migrations, but for one reason or another does not get implemented as planned across all machines.  This maybe because of oversight, budget cuts, or because hardware upgrades are required.

Findings the savings

License and support cost savings in respect of under used and over-licensed software achieved by large organisations are typically 6 and 7 figure sums.  But where to start?

The first step is to develop an accurate picture of what software is installed and used on a machine by machine basis. Use it or lose it is the moto, as managers reconcile licenses with usage, users and machines.

Expensive software such as, Adobe and CAD, is top of the list for cuts, however so too are cheaper, but more universally used software, such as; Microsoft Office.

New tools are required

Tackling the issue of over-licensing software requires better IT inventory data, data that is simply not available to most managers, despite investments in SAM and ITAM over recent years.

That is why a new range of dedicated tools to dynamically audit and inventorise software and hardware is increasingly being employed. iQuate’s solutions are among the best-in-breed of these tools, proving managers with a new level of detail, accuracy and speed in terms of their IT inventory data.