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Stop Wasting Money: Enterprises Must Invest in Software Licensing Management

By Alisen Downey, TMCnet Web Editor

As the year comes to a close and enterprise businesses revisit their budgets, one area they may realize is hemorrhaging money is software. Why is this? Software licensing solutions providers Flexera Software recently teamed up with industry-analyst IDC (News - Alert) to better understand the burden software licensing places on companies. Through their research, the firms found that one of the primary sources of lost dollars was “shelfware,” which refers to compliance risk and software applications that were purchased but never used.

Alarmingly, Flexera and IDC found that 85 percent of organizations surveyed also possessed software license agreements that were non-compliant, and nearly all enterprises (96 percent) admitted to owning shelfware. While many enterprise companies may fall into dangerous complacency regarding their non-compliant software licenses, they should be warned: nearly two-thirds of enterprises (63 percent) were audited by their software vendors in the last 18-24 months. For businesses surveyed by Flexera and IDC, this led to 56 percent of them having to face "true-up bills" that amounted to, in some cases, $1 million or more. Why even risk such a financial blow over something that is, in fact, preventable?

For starters, managing software licenses can be a complex beast, which the Flexera team knows all too well, as it assists customers with this task every day.

"Enterprise software counts among the most difficult of assets to manage for any organization,” said Jim Ryan, chief operating officer at Flexera. “The sheer diversity of software titles, the complexity of licensing terms, the evolving environments in which the software will be run, and constantly changing workforces represent just a few of the challenges."

In hopes of providing enterprises with more effective software license management solutions, Flexera has teamed up with KPMG LLP, a U.S. audit, tax and advisory firm. The alliance will offer more holistic software asset management and license optimization services for customers, leveraging KPMG and Flexera's combined strengths in such technology. Customers will now have access to services and processes that will help them improve their operational capability, effectively manage their software license estate, help optimize spend and—most importantly—reduce license compliance risk.

"Effective license management requires top-notch people, processes and technology,” Ryan added. “Flexera Software's market-leading Software License Optimization solution and KPMG's high-quality service offerings provide a one-stop-shop for organizations seeking to reduce waste and risk in their enterprise software investments to help ensure they're only buying what they need and using what they have."

One of the greatest benefits of effective software license management is that it saves companies money that can be put to better use elsewhere. “Currently, companies spend as much as 25 percent of their IT budgets on software and find themselves under increasing pressure to identify and eliminate waste and risk around this critical corporate asset," explained Paul Baguley, principal for contract compliance at KPMG. "KPMG has a dedicated network of hundreds of software licensing and Software Asset Management professionals around the globe, and our alliance with Flexera Software allows us to help clients effectively manage their IT software budgets and more accurately plan for future needs."

In such a tenuous economy, it is crucial for enterprises to keep their spending lean and efficient. While software is necessary to enterprise-level operations, with software licensing solutions it doesn’t have to be a necessary evil.