Overspending on software? The real costs and options

We recently calculated the costs and compliance risks of under-licensing software. But using more licenses than you’re paying for shouldn’t be your organization’s only concern. Almost every customer we come across is also over-licensing products in some situations. That is, they have purchased more licenses than they actually need.

How does this happen? Let’s say one of your employees retires or moves to a different company. She returns her computer (and the software licensed to it) to her IT department, which shelves the assets for future use. The next week, your company hires someone to fill the role. But, when that person is ready to set up her work station, she doesn’t go to the IT department. She goes to the procurement department, which purchases new licenses for her to use. Or, in another common scenario, the organization downsizes and the software gets “lost” in the confusion of the moment. The result is unnecessary outflow of cash and an unused stock-pile of licenses.

While this might not seem like a big deal at first glance, the costs of licensing over-compliance can negatively impact budgets, projects, reputations, and careers. Over-licensing software doesn’t have the same immediate, negative impact of under-licensing or an audit, but it can slowly drain resources from more productive uses. And the problem tends to self-perpetuate: Buying too many licenses in the first place very often results in buying too much maintenance year after year.

When idle licenses are uncovered, certain questions invariably arise: How much did the unused licenses cost, and what other projects were cut or had their budgets slashed in order to cover the expense? Who sanctioned this purchase? Why don’t we have better records on what we own and what we are using? And lastly, now that we have identified all these unused licenses, what do we do with them?

Organizations that have a surplus of unused software licenses have four options: Continue Reading…

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