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Driving down the Cost of IT with Software License Optimization

By Peter Björkman | December 19, 2013

According to recent research from IAITAM (the International Association of IT Asset Managers), the number one priority for ITAM in 2014 is to drive down the cost of IT. 

Hardly new; hardly surprising. But the fact that we see something similar practically every year does suggest that many organizations don’t think they are optimizing their costs. In fact, the same research put ‘software license optimization’ and ‘software audit readiness’ at positions six and seven respectively.

In some ways, it is interesting that these three goals have been called-out individually, since in many ways they are intrinsically connected. With software accounting for upwards of 30% of the overall IT spend each year, there’s good reason to look at costs, optimization and audit-readiness.

So how can ITAM professionals deliver the desired cost savings while at the same time optimizing software licensing and preparing for an audit?

Here are a few examples:

  1. Asset visibility – it’s a well-worn phrase that ‘discovery comes first’, but with good reason.  The simple fact is that IT managers can’t manage what they can’t see.  And this has never been more true than with today’s multi-platform networks. Before anything else, organizations must have full visibility of the hardware and software assets deployed across the network.
  2. License re-harvesting – not every application that is installed on a PC or server is used regularly.  Where software is installed but not used, it is not delivering any value to the organization.  Regularly monitoring the network for unused software allows ITAM managers to uninstall unused applications and reclaim the licenses so that they can be re-allocated to other users. The primary benefit to the business in this scenario is that the organization makes better use of the existing license ‘pool’ and avoids the cost of purchasing unnecessary licenses.
  3. Vendor management - In a similar vein to license re-harvesting, understanding what software is actively being used on the network is essential to effective vendor management.  Whether it is negotiating a new three-year contract, renewing support and maintenance agreements or haggling the price of an upgrade – it is far easier to get value for money when the end user organization knows exactly what it needs and what value it derives from the software assets.  Guestimations never go in the customer’s favor!
  4. Agreement optimization – organizations often enter into volume licensing agreements on the promise of not just simplified license management, but also the ability to leverage the latest and greatest technologies.  Yet many organizations fail to take full advantage of the entitlements that come with volume licensing.  Understanding what’s in use versus the actual entitlement highlights opportunities to upgrade or deploy new technologies that could improve productivity and potential cost less.
  5. Enterprise applications – vendors like Oracle and SAP are notoriously easy to over-spend on. Worse still, it’s easy to over-spend without even knowing why or how.  Establishing full visibility of the enterprise applications and databases that are installed, together with the associated costly options and management packs can help drive down costs (and avoid compliance penalties).  For example, simply checking that a deployed Oracle database is a Standard, rather than Enterprise, edition could easily save $120,000 on just one server!
  6. Cross-charging – it is becoming increasingly common for individual business units to ‘pay’ for the IT they use (which in some cases reduces the ‘cost’ of IT to the central business). But cross-charging is only possible when IT has full visibility of what assets are being used by which business units, together with some form of financial information. A good software license management solution can make cross-charging a reality.

Ultimately, it’s unlikely that ‘driving down the cost of IT’ will ever slip off ITAM’s top-ten list. But by managing software assets and entitlements more effectively, perhaps there will be more time to focus on business priorities such as the adoption of new technologies or investing in outdated infrastructure.

Likewise, there’s a strong argument to suggest that optimization and audit-readiness should never be outside the top-ten – but with greater visibility and automation, the task of achieving these goals should be made significantly easier.

To read more about how managing software assets can drive down costs and compliance risks while optimizing asset availability, download the free white paper “SAM in an imperfect world”.

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