The move to hybrid working models and the complexity of the IT Estate hides redundant software and SaaS services, often self-sourced, leading to escalating costs and increased risk. Industry research shows that organizations routinely waste money by paying for redundant, unused or duplicated Cloud resources (Analyst estimates put potential Cloud cost overspending and over licensing costs at approximately 30-35%). Coupled with a lack of clarity around inventory, license liability, usage and even asset location, accurate management of ongoing costs has increased the challenges of managing software licensing costs.
The conventional approach of purchasing licenses as needed has proven to be both expensive and inefficient. This is where data-driven insights and proactive license management come into play, offering a strategic pathway to substantial cost savings.
Insights to Help Gain Control, Optimize, and Reduce Software Licensing Costs
Significant Savings Through Intelligent Usage Metering
The journey towards optimizing software licensing costs begins with identifying unassigned or inactive licenses. These hidden expenses can accumulate over time and strain an organization’s budget. By implementing carefully curated license management strategies, that are built on granular intelligent usage metering, such as license redeployment, re-harvesting, and re-assignment of inactive licenses, organizations can significantly reduce costs. This proactive approach ensures that licenses are put to good use, minimizing waste and maximizing value.
Navigating the Pitfalls of On-Demand Licensing
The tendency to acquire licenses on an as-needed basis can result in over-licensing. Without understanding actual usage patterns, organizations may end up purchasing more licenses than necessary, leading to inflated costs. Traditionally, understanding license usage was a manual process, often reliant on custom usage reports. This disconnected approach between visibility and cost ownership can dilute the urgency of addressing such over-expenditure.
Avoid Surprises
Often, over-licensing issues come to light only during annual true-up processes or Enterprise License Agreement (ELA) renewals. These revelations can be shocking, as departments and business units realize the extent of the costs they face. The lack of visibility prevents them from reclaiming licenses that aren’t being utilized. This reactive approach can be costly and inefficient.
Identify and Eliminate Bad Practice
Publisher’s license management systems typically offer basic usage data, which may not provide the necessary insights to reduce spend. Over-provisioning and suboptimal usage by users can incur additional costs in usage-based license models. It’s crucial to have detailed data that reveals over-provisioned users and identifies areas of bad practice.
Eliminate Over-Provisioning and Right-Size Entitlements
Enterprises often find themselves in reactive mode, addressing license issues only when faced with audits. This can result in assigning the highest subscription levels by default, leading to unnecessary expenses. Rightsizing entitlements, based on evidence and insight from accurate active usage metering, can swiftly deliver substantial savings. It’s crucial to match licenses with actual user needs and usage patterns.
Actively Upgrade or Downgrade Licenses?
License optimization isn’t solely about downsizing or eliminating licenses; it’s also about enhancing utilization. Users can be trained to make full use of paid applications, boosting productivity. Likewise, identifying cases where upgrading licenses would yield better results can contribute to the organization’s financial health.
The Proactive Approach is the Smart Way to Go
By utilizing active usage metering and proactive strategies, IT departments can avoid carrying unused licenses and overspending on unnecessary licenses. Establishing clear standards for license assignment and involving business units in evaluating usage leads to better cost control.
Arm Yourself with Data – Accurately Right-Size Requirements Ahead of Enterprise License Agreement Renewals
Accurate license usage analysis is essential for effective Enterprise License Agreement (ELA) negotiations. Detailed usage data allows IT leaders to right-size agreements with vendors, preventing overspending. Intelligent usage metering offers insights beyond simple metrics, helping organizations identify inconsistencies and negotiate renewal terms that align with actual usage.
Drive digital adoption to optimize both cost and business outcomes
Driving the adoption of standardized solutions not only improves productivity but also reduces the burden on IT departments. Centralized monitoring and maintenance of company programs and processes allow IT teams to operate more efficiently.
This focused approach not only creates additional bandwidth for helpful resources and enhanced user training but also leads to long-term decreases in helpdesk service desk incidents. Furthermore, standardization results in eliminating the expenses associated with maintaining multiple software programs.
Use Digital Employee Experience (DEX) metrics to enable smarter hardware refresh cycles
Renewing hardware based only on age is a huge expense, for any organization, but delaying renewals solely to reduce expenses, can have negative impact on employee experience and employee productivity. Intelligent DEX analytics that provide comprehensive data and insights that combine key data points from usage and performance with user experience analytics are key.
Intelligent analytics and KPIs that measure employee usage and correlate actual user experience to device health and performance, help IT teams drive smarter refresh cycles that extend the lifespan of an end-user device when appropriate, with an ability to determine whether devices need replacement, upgrade, or no action at all.
Overall
In the modern business landscape, optimizing employee focused IT costs, such as software licensing costs, is not just a desire—it’s a necessity. Organizations can no longer afford to overspend on licenses that remain unused or underutilized. By embracing data-driven insights from DEX analytics dashboards, businesses can take control of their licensing costs, maximize value, and make informed decisions that align with their budgetary constraints. The journey to cost-efficient software licensing starts with a commitment to visibility, accuracy, and strategic optimization.
