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Get ready for software price hikes in 2016

By Axel Kling | August 24, 2015

In its recent “Worldwide IT Spending Forecast”, updated on June 30th, Gartner is predicting that global expenditure will decline by 5.5% in 2015. The report is quick to attribute the ‘appearance’ of the decline to the rising US dollar, and points out that in real terms IT spending will rise by 2.5% to $3.5 trillion through 2015.

Nevertheless, the analysts state that a likely result of the rising US dollar is that software publishers (among the many IT vendors) will raise their prices to protect their margins and revenues.

That’s well within their rights, of course, but how many end user organizations will see their IT budgets increase to counter the same change in US value? 

I think to say ‘few’ would be an over-statement. So, in real-world terms, software licenses are about to get more expensive, and there’s nothing end user organizations can do about it. Except of course to manage what licenses they already have – and those that they might want or need to purchase in the coming months and years – much more closely than perhaps they’re already doing.

That’s where Software Asset Management (SAM) comes in. Some IT professionals are familiar with the concept of managing software licenses to avoid compliance troubles, but increasingly the business value of proactively managing current and future licensing needs is overtaking the grudging acceptance that compliance is a must. For most organizations, that realization of optimization goals is still some way off. 

What’s more, SAM today doesn’t just focus on the software across the organization’s desktops and laptops: Datacenters, cloud applications and mobile devices all need to be included in a unified multi-platform SAM program if the organization is to realize the full value of software optimization. We know from our own activities with customers that the average cost of unused software on a desktop PC is in the region of €300/ US $335.

That current level of over-spend probably far outweighs the price hikes we’re likely to see over the coming 12 months (and certainly outstrips the cost of a SAM solution like Snow License Manager), begging the question as to why you would wait to save such dramatic costs? After all, it looks like you’re going to need more budget for next year’s unavoidable software costs than you might have planned for.

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