The hidden pitfalls of unmanaged software

On the face of it, very few organisations have software asset management strategies in place, exposing the company to considerable financial risk. As long as software is bought and licensed legally, it's forgotten. Very few organisations stop to detect unused software or shelfware (that is never deployed to begin with) across the myriad of systems, locations, PCs and servers - never mind reclaiming or reusing them.

The complexity of software asset management

Bundled deals, licence options and virtualisation have all contributed to the complexity of software asset management. Organisations are struggling to reconcile the software they have actually deployed with the software they have licensed. Very few seem to know how much money and waste is being tied up in their software, and how much they could save by efficiently managing their software licences. Add to that the fact that software vendors are becoming increasingly more vigilant, clamping down through regular vendor audits, which result in heavy fines, substantial back-charges and the threat of legal action. (Virtually all agreements with software vendors stipulate that they will have the right to audit at least annually.)

Fearing being caught with unlicensed products, many organisations respond by buying even more software, ignoring the very real danger that it will never be deployed, used or add value. This results in unnecessary costs as companies are still paying maintenance fees for software they aren't using or purchasing additional licences rather reallocating existing ones. Analysis conducted on a number of local organisations showed that at least 20 to 40% of licences deployed are not being used - and definitely not reclaimed. In the US alone, this represents USD12.3 billion in preventable and ongoing costs, with a typical enterprise with 10 000 users using USD4.1 million worth of unused software on PCS, costing USD1.1 million annually on ongoing maintenance.

Disorganisation is another concern, particularly not having a handle on what software is deployed in your organisation and how many licences of that particular piece of software are deployed. Typically, organisations will purchase a number of licences, known as their licence entitlement. However, when more than the entitlement is deployed, they have to pay additional for the additional usage. This represents not only a financial risk, but also a reputational risk. For all intents and purposes, this is construed as licence theft if not disclosed and procured.

Questions to ask yourself

CIOs should be asking themselves, on a regular basis: What do we own? What are we using? And, of course: What do we really need?

By deploying licence metering and tools implemented like 1E's AppClarity, which provides the ability to reclaim unused applications both in an automated fashion, as well as a user centric approach, companies can curb their unnecessary costs dramatically.

Software asset management tools should also be deployed and maintained to ensure that licence entitlement and deployment remain in synch. The software efficiency report of 2011 showed that 52% of enterprises used spreadsheets to record software licences, 12% using paper-based filing systems and 12% use nothing whatsoever. Keeping track of licences is the key to remaining cost-efficient.

In the end, there is no excuse for not having a software asset management strategy in place - there is technology that will do it for you. This is a quick-and-effective way of eliminating software waste in the company, while still safeguarding the organisation against a vendor audit.