Are You Spending Too Much on Software?

Are You Spending Too Much on Software?

Software license management helps you find the right balance of licensing as much software as needed, but no more.

It is hard to imagine running a business today without software. From desktop applications, like word processors and spreadsheets, to back office systems, like relational databases and content management systems, software is an essential component of most business processes.  There is no argument we all need software in our organizations – the key question is how much and what kind.  If we do not have the software we need, then we run the risk of inefficient operations or worse.  If we license too much software or use the wrong kind of software we may find ourselves paying too much.  Finding the right balance of licensing as much software as needed, but not more, is one of the challenges addressed by software license management.

 Software License Management

Software license management (SLM) is a process for controlling software costs while maintaining compliance.  SLM practices and systems help answer three driving questions:

What software is owned?

What software is used?

And who is using it? 

With answers to these questions, administrators and managers can optimize the allocation of software licenses, choose the most appropriate licensing model, and avoid potential costly non-compliance.

To answer the question of whether you are spending too much on software, we must first start with an inventory of software assets.  You could, of course, send support desk staff to visit every desktop or remotely connect to every computer and manually catalog all the software on each system, but fortunately there are better ways.

Free tools, such as the Microsoft Software Inventory Analyzer (MSIA), can scan computers on a network and generate reports on the Microsoft products installed, as well as the number of licenses and the license types in place.  MSIA is designed for small networks (less than 250 devices) and only detects Microsoft products.  Other free products, such as Spiceworks software inventory management tool, can collect data on all software on a device, including Mac OS X and Linux systems.  Large enterprise can scale their software asset management operations with applications such as IBM Tivoli IT & Software Asset Management system.

Deployed Software and Licenses

Software asset management tools can help you understand what software is deployed in your organization. That information should be compared to your licenses in place. This is often much more difficult than it should be.  Licensing information may be distributed in multiple places throughout the organization.  For example, IT might manage all Microsoft desktop software licenses but other departments might manage their own licenses for specialized software, such as computer aide design or mathematical modeling systems use in engineering.  In some cases, a single unit within the organization might manage licensing information but the information might be tracked in multiple systems or even ad hoc spreadsheets.  This lack of centralization makes software license management more difficult and error prone.

Ideally, software license information should be tracked in the same application as software asset inventory information.  This allows for ready comparison between the number of software assets deployed and the number that are licensed.   Combining deployment and license data will allow license managers to identify cases in which there are more licenses than deployed instances or more deployed instances than licenses. In the first case, an organization may be paying more than necessary for software licenses.  At the very least, licenses should not exceed the number of deployed instances.  In the second case, the organization is not in compliance and the data from the software inventory can be used to correct the problem.

Dan Sullivan is an author, systems architect, and consultant with over 20 years of IT experience with engagements in systems architecture, enterprise security, advanced analytics and business intelligence. He has worked in a broad range of industries, including financial services, manufacturing, pharmaceuticals, software development, government, retail, gas and oil production, power generation, life sciences, and education.  Dan has written 16 books and numerous articles and white papers about topics ranging from data warehousing, Cloud Computing and advanced analytics to security management, collaboration, and text mining.

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