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Gartner's tips for significant savings on software spend

By Shannon Williams
Fri 22 Jul 2016
FYI, this story is more than a year old

For companies to look to reduce software license spending, they best follow three best practices just released from analyst firm Gartner.

According to research, organisations can cut spending on software by as much as 30% by implementing three software license optimisation best practices.

Gartner says the keys to reducing software license spending are application configuration optimisation, recycling software licenses and by using software asset management (SAM) tools.

Hank Marquis, research director at Gartner, says achieving software savings is a complex exercise, but the potential savings are just too large to ignore.

"Automated software license optimisation is a relatively new discipline and most organisations are at lower levels of maturity,” Marquis says.

"The variety of license entitlements also makes it tough for IT leaders to spot savings, especially in environments with many software publishers and titles,” he explains.

“But it's worth pursuing, as spending reductions contribute directly to the bottom line as gross profit."

According to Gartner's latest global IT spending forecast update, organisations will spend $332 billion on software in 2016.

In more than 800 Gartner client inquiries regarding SAM tools between May 2015 and March 2016, organisations with mature software license optimisation processes that were automated using SAM tools reported reducing software expenses, on average, by 30% within the tools' first year of operation.

According to Gartner, organisations can cut software spending using three best practices.

Optimise Software Configurations

Software from large publishers has complex use rights and is costly. The default configuration for most software is normally the most expensive for clients as well. This blend of complexity and high cost offers your best chances to cut spending.

IT leaders must look for savings in the configuration of software, especially data center software.

"Such changes appear simple in hindsight, but they are not obvious, and your savings could be in the millions of dollars," says Marquis.

Recycle Software Licenses

Recycling software licenses is the recovery of unused license rights for reuse to avoid new license purchases. License recycling will reduce software spending as well as support and maintenance costs.

Recycling requires strong process control. However, with many IT organisations at low maturity levels, most could cut their software spending by maturing their recycling and license optimisation processes and building them into their daily IT operational activities.

Recycling requires metering to spot unused, underused or misused software. For example, a user may have a piece of software installed but never actually use it — or perhaps the user only requires a viewer. SAM tools, and some client management tools, can provide this functionality.

Use SAM Tools

It is hard to optimise software spending because licenses are so complex, Marquis says.

“Optimising complex licenses manually is labour-intensive; it requires specialised knowledge and does not scale,” he explains.

Larger enterprises will need a SAM tool. A SAM tool can automate, accelerate and improve manual processes. It can pay dividends over manual alternatives, and can often pay for itself.

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