Expense Reduction Series - Software Licensing (And it's About More than Expense Reduction)

As more business software is available under a greater variety of licensing and delivery schemes, you would think that expense reduction for software licensing would be less of an issue.  After all, greater variety generally equates to savings, thanks to greater competition.

Unfortunately, that’s not the case. If anything, the demand for software licensing expense reduction is greater than ever, along with the need to implement Software Asset Management (SAM) plans and processes.

Software License Complexity

Software licensing has never been more complex or more open to misuse and misunderstanding. (We’ll get into software license compliance in a minute.)

The right to use a particular software application may be granted under an End User License Agreement (EULA), an enterprise-wide license agreement or some variation. The purchase may be transacted through vehicles ranging from complicated volume purchase agreements to monthly subscriptions for Software-as-a-Service (SaaS), also known as cloud computing applications and services.

Add further complexity, courtesy of the IT environment:

• Business employees using some combination of desktop computers on a network, laptops, tablets and smartphones. 
• Access to enterprise software, personal productivity software and mobile applications.
• Don’t forget the access itself, with an alphabet soup of wired and wireless networks. 
• Also don’t forget organizational size and structure, along with increasing mobility and work-from-home arrangements. 

Software License Costs 

All this complexity comes at a cost.

Every application, small or large, includes a software license that must be purchased and managed. Applications come from different vendors with different purchasing agreements and terms. And increasingly, employees using a credit card can acquire software applications directly, whether it’s a web application or a mobile app from the Apple or Google store.

While software-as-a-service is touted as an affordable software solution, all those dollars and cents add up quickly when thousands or hundreds or even tens of employees are buying them, sometimes in monthly subscriptions that linger on long after a need is met.

Software License Compliance

According to Gartner, 65% percentage of clients were involved in publisher-initiated software audits in 2011, a slight increase from 61% in 2010.

Gartner recommends the implementation of Software Asset Management (SAM) programs and other processes to mitigate the risk, financial and otherwise, of non-compliance. The risk involves not only the additional software license costs, but preparation time, potential legal action and lack of negotiating power.

More Complex Software Licensing = More Pressure for Expense Reduction + Greater Need for Software Asset Management

Clearly, expense reduction is not the only software licensing concern. With the potential for costly and damaging liabilities, more businesses are coming to us for advice and protection. We give them one-stop shopping and greater peace of mind by helping them remain in software licensing compliance, negotiate the best purchasing terms, manage various agreements and minimize the complexity.