Many organizations can cut spending on software by as much as 30 per cent with some basic software license optimization best practices.
According to analyst Gartner, global software spending is set to hit $332bn this year, and the key to reducing software license spending are application configuration optimization, recycling software licenses, and the use of software asset management (SAM) tools.
Achieving software savings is a complex exercise, but the potential savings are just too large to ignore, according to Gartner's research director Hank Marquis.
"Automated software license optimization is a relatively new discipline and most organizations are at lower levels of maturity. The variety of license entitlements also makes it tough... to spot savings, especially in environments with many software publishers and titles."
And, as Marquis points out, it's worth making this a priority task because any spending reductions achieved will go straight to the bottom line as gross profit.
Gartner suggests three best practices:
Optimize configurations provided by the software publishers
This, Gartner points out, usually has complex use rights that add to the cost. In this area, one of the key problems is the use of default configurations: the analyst says that while the complexity of the software licenses can make doing something about it time-consuming and complex, it's worth doing because it offers your best chances to cut spending. In addition to this, IT managers should "look for savings in the configuration of software, especially datacentre software," Gartner said. According to Marquis, "such changes appear simple in hindsight, but they are not obvious, and your savings could be in the millions of dollars."
Recycle software licenses
Recovering unused software for reuse is another possible way to reduce costs. However, Gartner believes that many IT organizations "at low maturity levels" could cut their software spending by looking at the way they currently buy software, ensuring that they are controlling it and getting the optimum use of the licenses. In Gartner-speak, "maturing their recycling and license optimization processes and building them into their daily IT operational activities".
Use SAM tools
It is difficult to optimize software spending because licenses are so complex and the whole process is labor-intensive. Because it requires specialized knowledge and does not scale, larger companies need a SAM tool which can automate the process. Gartner believes "it can pay dividends over manual alternatives, and can often pay for itself".
It seems that the vendors of SAM tools are going to be the big winners in all of this. Gartner says that between May 2015 and March this year, more than 800 of its clients made inquiries regarding SAM tools.
Those organizations "with mature software license optimization processes that were automated using SAM tools" reported reducing software expenses, on average, by 30 per cent within the tools' first year of operation.