Eliminating Unnecessary Software Licence Costs

The discussion on software licences often centres around software usage without adequate licensing. Over-licensing is seldom given the same emphasis, and organisations often find themselves:

• Buying new software licences while existing licences remain idle. Reallocate unused software licences and assess actual needs before purchasing new ones. Examples of redundancy include licences for staff members who have:
  • Changed roles and no longer need access to the software.
  • Left the organisation.

• Renewing yearly support contracts based on the current number of licences, while overall software usage has dropped. Reviewing software usage before renewing support contracts could significantly reduce costs.

• Unused software installed – an external vendor software licence audit could identify the need to purchase a significant number of new licences. The business might have 100 staff using a particular product and has correctly purchased 100 software licences. However, if the audit reveals 150 installations, the vendor could demand payment for the extra 50 software licences. Removing software from systems where it is no longer required will reduce this risk and financial exposure; a case of cost avoidance rather than cost reduction, but equally important.

• Reorganise responsibilities to reduce licence requirements – distributing work inefficiently across a broad cross-section of the business increases the overall licence requirement. For example, 300 staff with access to software, but 150 use it for less than 5 minutes per day, or where software is allocated ‘just in case’.

When undertaking these activities, consider the cost of change, including licence unit costs, support fees, and the number of licences required.