According to an analysis by Gartner, global IT spending is projected to total $3.8 trillion in 2021, an increase of 4% from 2020. Of all product and service categories, enterprise software is predicted to see the biggest increase, jumping 7.2% this year.
While the boom in IT investment isn’t surprising, it begs the question: how much of this software is fit for purpose? And conversely, how much is going to waste?
A study by software lifecycle automation company 1E revealed that the total cost of purchased, deployed and unused software within the US alone is a staggering $6.6 billion. Understanding the principles of software license management is key to effectively managing expenditure and reducing wastage.
How does software license management work?
Software license management (SLM) is an umbrella term for the processes, procedures and tools used within an organisation to manage its software licenses throughout the entire software lifecycle. This includes a strategic approach to purchasing, deployment, maintenance, utilisation and disposal.
SLM is important because it helps organisations ensure cost-efficiency and usefulness at every stage of the software lifecycle. For example, it helps IT teams determine how many and what types of software licenses they need to buy to fit the needs of the user base, and ensure those licenses are put to good use (utilisation) once purchased. SLM also ensures an organisation is meeting its compliance requirements for software licensing agreements.
Key considerations for software license management
So how do you effectively manage all the moving parts of software license management to reduce costs and maximise efficiencies? Here are four key considerations.
1. Know the common types of software licenses
It’s important to understand the common types of software licenses to determine usage allowances and ensure your compliance. The most common license types include:
Per device: This means that the software can only be deployed on a single machine, which could be a workstation or a server. Non-compliance can occur if users try to access the software on multiple devices, or if it’s deployed to a test environment on a separate device.
Per use: The type of license means that a single individual is given login credentials for the software and must confirm their identity to access the application. Sharing credentials across multiple users can lead to non-compliance issues with per use license agreements.
Per network: This type of license allows usage for all devices on a specified network. Non-compliance issues can crop up if users try to access the software outside the network, such as when working from home.
2. Provide education around software usage
Even with a clear software license management policy in place, organisations still need to ensure that employees understand the risks of non-compliance and what’s allowable when it comes to software usage. Providing education and training from the outset will help ensure effective utilisation of software licenses and avoid non-compliance issues.
3. Monitor usage
Continually reviewing software usage for each application and license will help reduce costs by eliminating wastage, while enabling IT teams to act swiftly in adjusting their approach to software license management as requirements change.
4. Find a reputable software licensing partner
There is a multitude of factors at play in software licensing, which can quickly lead to operational headaches and blown-out costs if not properly managed. Finding a trusted partner provides assurance your software licensing management approach is cost-effective and fit for purpose, so you can focus on more important tasks.
At Area9, we maintain a comprehensive license and warranty database for you, ensuring you’re always made aware of changes and renewals, while payment is made simple with everything collated on the one invoice. To discuss your software licensing requirements, get in touch with our team.