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How to Save Money on Your Software Licenses

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How to Save Money on Your Software Licenses

September 02, 2016
By Paula Bernier
Executive Editor, TMC

There seems to be a lot of inefficiency and wasted dollars out there in the business world when it comes to software licenses. Like anything else, if no one person or system is tasked with monitoring and managing this kind of thing and actually takes the time to do that in a holistic way, things get overlooked.

“Tracking license entitlements can be difficult,” notes a June 17 Flexera Software blog. “You need to manage volume licensing agreements from many vendors, all of which have different terms and conditions. There are also OEM licenses that are included with hardware purchases. These are not included in any volume agreement and are not tracked by the software vendors. And exacerbating the issue are the single copy and retail software purchases. These may go through enterprise procurement processes and be tracked, or users may install themselves, in which case the entitlement may go unknown.”

But businesses are increasingly waking up to the fact that they could potentially be saving big on their software licenses. That helps explain why the software asset management industry is forecast to be worth billions of dollars globally by 2019. According to Matt Fisher, vice president of global marketing a Snow Software, software asset management includes license allocation, license optimization, problem resolution, software compliance and audit management, software reharvesting, and vendor management and negotiation.

To get the most out of your software licenses, and ensure you are only paying for the software you need, Apropos suggests businesses negotiate for discounts, align their negotiation efforts, and leverage third-party software to avoid overpayment.

Negotiating for discounts on software licenses can pay off big, according to Apropos, which suggests that discounts in this realm have run as high as 70 percent for deals of more than $2 million and up to 50 percent for smaller deals. For best results, it adds, do negotiations early in the quarter, when sales reps have more room to offer discounts and are more likely to view discounted deals as a pipeline to future business.

For more bargaining power, Apropos suggests that organization combine the different teams at their organizations so they can negotiate a larger deal all at once and better position their companies for the best volume discounts.

Meanwhile, leveraging third-party software can ensure your organization is always in compliance with licenses, says Apropos. That way, it says, you’ll avoid any unforeseen license-related charges related to non-compliance.

Such software can also alert you to duplication to ensure your organization isn’t paying for licenses for individual users more than once. That can happen when single users are identified multiple ways in record-keeping systems. Also, sometimes businesses are paying for multiple versions of the same application, but because they have purchased it from different sources and the application is part of different agreements, no one realizes it. Again, third-party software can uncover such situations and weed out these inefficiencies that needlessly waste company dollars.

Making sure your organization is only paying for software that it actually uses is another surefire way to lower software licensing costs, according to Apropos. To encourage that, the company suggests that businesses assign software license costs to individual business units to assign more accountability for those expenditures and drive more efficient usage.

And, of course, make sure somebody is using each license you’re paying for, Apropos advises, and cancel maintenance agreements for those licenses that are not in use, and do not renew the licenses the next time around.

Edited by Alicia Young

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