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Federal Government's Rising Software Licensing Costs Parallel Similar Problems in Private Sector

By Christopher Mohr, TMCnet Contributing Writer

To say that managing software licenses for large organizations is a complex task would be the ultimate understatement. Software can be licensed by the seat, number of concurrent users and number of server processors. Site, multiplexing and clustering are also ways to license software. These are challenging enough to track without including mobile use and software run in the cloud.

The costs of being out of compliance can be staggering. After a software audit, companies may be subject to having to purchase additional licenses and paying for back maintenance costs to cover the level of licensing they should have had to begin with. The Business Software Alliance has arrangements with many vendors to conduct audits and levy fines as well.

Over-compliance with software licensing can be just as costly as non-compliance. Many companies have gone overboard in erring on the side of avoiding a software audit. While there might be some advantage to avoiding such stress, paying for software that isn’t used is wasteful. Nowhere is this problem greater than it is in the U.S. federal government.

The Government Accountability Office (GAO) has released a report that describes the problems many federal agencies have had with money wasted on software licensing costs. It concluded that centralizing license management, developing an inventory system, analyzing license data and training were needed to reduce wasteful license spending.

These recommendations would also serve the private sector well. Managing licensing is so complex that there should be staff dedicated to it. Software asset management tools alone are not a solution. No two companies will have the same combination of software licensing; its management does not lend itself well to one-size-fits-all automation.

Since the federal government does not presently have the infrastructure in place to manage software licenses properly, it’s also likely that most private-sector enterprises don’t either. It may be impossible to create an infrastructure that is perfect and air-tight, but having nothing is not the answer either. Too much money is being wasted on non-compliance and over-compliance of software license management to dismiss it as simply a cost of doing business.