How to Save Money on Your Software Licensing
Software licensing is ridiculously confusing, and its hyper complexity is not slowing down anytime soon. This confusion can easily lead to overspending, which equates to more money in the software vendor’s pockets, taken at the expense of your company’s software budget. How does overspending on software licensing occur and what steps can you take to cut software licensing costs?
At MetrixData360, we have helped hundreds of companies save millions of dollars, so we will show you the steps you can take to mitigate any potential areas of overspending in your software licensing environment.
Have A Clear Life Cycle for Assets
Not having a clear system that retires old assets is one place that is often a source of overspending for many companies. Employees leave the company, but they still have accounts and their old desktops are put in storage, but those old devices are still showing in certain environments as active. These old assets can become a source of artificial inflation for a company’s license requirements.
These retired assets could easily still be visible in your Active Directory, which is where the software auditors will look in the event of an audit. This will make it appear like you owe far more than you actually do while also being quite a drain on your company’s budget.
One of the reasons for this inflation lies in the lack of systemization in place for tracking assets. Old employees drop off their computers to the IT department but new hires head to procurement to ask for new desktops (and the licenses that go along with them).
A lack of proper organization for this process fails to account for the possibility to redeploy licenses and will leave you ill-prepared for both a software audit and a contract renewal.
Having an inventory tool in place will greatly assist in the monitoring of assets, which brings us to our second point.
Have a SAM Tool in Place – and Someone Who Can Read It
Software Asset Management tools are essential if you have a large software estate and you need to keep track of everything that’s deployed. Software Asset Management tools specialize in inventory and licensing, and are an indispensable means to cut software licensing costs.
Demonstrating to your software vendors the systems you have in place to track your software deployment will give you a greater appearance of control.
However, SAM tools cannot grant you instantaneous and easy, always-available visibility into compliance gaps and overspending. Depending on the SAM tool you’ve installed, your SAM tool might struggle with the following:
- Multiple licensing metrics
- Detecting development or test products that are not yet in full production
- Cloud licensing
- Failure to account for duplicates (they might accidentally count new software and older version of that software that has not been fully removed from your environment)
- OEM and Retail Boxes Purchases (SAM tools are often confused by such purchases)
Want to know more about where your SAM tools are leaving you open to compliance risks, check out our article Why Do Software Asset Management Tools Stink at Software Asset Management?
All of these complications can leave your SAM tool lacking in some areas, which may make you resort to buying another SAM tool or it will force you to fill in the missing gaps of information manually.
Both these tactics mean you’re wasting time and money on the SAM tool you purchased. That is why it is important to have someone who can actually manage your SAM tools and analyze the data it produces. This can be done through hiring an in-house software asset manager or hiring an external partner.
Don’t Guess Your Projected Usage in Contract Negotiations
If a company does not have a firm grasp of their software usage when their contract is up for renewal they will inaccurately estimate how much they will need.
Due to lack of visibility into requirements, many companies end up licensing simply what their sales reps suggest in contract negotiations, instead of licensing what they actually need. Sales reps have quotas to meet, they are not in the business of saving you money.
Also, make sure that the value of the software that you’re interested in deploying is not outweighed by the cost of maintenance. We’ve seen companies crippled with the cost of running programs where support and maintenance costs continue to grow year after year. If you have a good handle on the software you use, you can also align the cost of maintenance to match your actual usage.
Move to the Cloud Carefully
The Cloud poses a tempting offer for many businesses thanks to its flexibility, its storage capabilities, and its seeming ability to remove the difficulty of managing both the hardware and software on-premises.
Now you need only pay for what you use like a utility bill. It is often the case, however, that companies begin the transition to the Cloud only to stop halfway through because the costs of moving there was much more than the company anticipated.
Unexpected costs come from the following areas when moving to the Cloud:
- Your department spins up projects without shutting them down after the project has been completed.
- Everyone in your company is allowed access to your Cloud estate. We once had a client accidentally pay $80,000 in the span of two months because one of their junior IT had turned on an expensive storage option that was collecting data for the whole company.
- You assume your licenses can be taken to the Cloud when in reality vendors might allow it, they might not or they might allow for only a partial move.
- You assume your licenses neatly translate to the Cloud when in reality, license metrics behave differently in the Cloud, often in a way that will leave your servers under-licensed and your company exposed to the heavy penalties of an audit.
Having a process in place that controls who has access to your Cloud estate, understanding your expected usage and having a strong understanding of your licenses along with their potential mobility to the Cloud will help to ensure that your transition is a smooth one!
Perform Internal Audits Constantly
Regular upkeep of your software licensing and usage should occur on a monthly or bi-weekly basis. The two main benefits of performing internal software audits are that it reduces the number of inactive licenses in your environment and it ensures your ability to maximize the efficiency of your current licensing position.
It can also help counter many of the issues that crop up due to Cloud migration and data gaps in your SAM tools.
Getting a handle on your data will also allow you to be ready in the event of an audit. Having quality data to challenge the auditor’s findings will be a massive advantage for your company during the auditing process and the settlement that will occur after.
Start Saving on Your Software Licensing
Being able to cut software licensing costs will mean money back into the IT department for smarter and more innovative investments. This can be done by tracking the life cycles of your assets through the successful deployment of an inventory tool (along with someone who can effectively read it), through having a clear understanding of usage during contract negotiations, carefully considering your migration to the Cloud, and by conducting internal audits to ensure compliance.
At Metrixdata360, we can help you cut down your costs to save you from unnecessary drains on your budget and potentially heavy audit penalties. Don’t put off saving money, get your free consultation today!