You're wasting up to half of your software budget – but which half?

Organisations large and small are wasting their IT budgets by not managing their software licences, according to new research.
Written by Steve Ranger, Global News Director on

Businesses are failing to get a grip on their software spending, buying bundles of software they don't really need and getting confused by complicated licensing terms.

Nearly a quarter of enterprises (23 percent) responding to a recent survey said unused software accounted for up to 10 percent of their software spending in the last twelve months.

Another 25 percent said they wasted up to 20 percent of their software budget, while 14 percent said that their so-called 'shelfware' could account for as much as 30 percent of software spend, and 10 percent said the wastage could account for up to 40 percent, according to IDC research sponsored by Flexera Software.

A separate survey of small and medium sized businesses in the UK and Germany found very similar levels of wastage: while a very organised 12 percent of small businesses said all their software was used, 43 per cent said somewhere up to 10 percent of software was lying idle.

Another 28 percent said they didn't use between 11 and 20 percent of their software, 11 percent admitted to not using 21 to 35 percent — and a rather extravagant five percent said as much as half was unused.

In Germany nearly three-quarters said less than 10 percent was wasted, according to the survey by management software company Solarwinds, which noted: "Simplicity is essential and avoiding bundled products which include unnecessary elements will ensure businesses get the best value for money."

According to the IDC report simply counting the number of licences an organisation owns only tells part of the story because product use rights (such as upgrade rights, downgrade rights and secondary use rights) complicate usage.

"Only by optimising the software licence estate — reconciling product use rights with actual usage — can enterprises hope to buy only what they need and use what they have," it said.

But according to the survey, 30 percent of respondents do not reconcile software usage data with product use rights. Just over half (53 percent) do, but only for key, high-value vendors — only 17 percent practise software licence optimisation across their entire software estate.

Nearly half (44 percent) of enterprises surveyed added they expect software budgets to increase over the next 18 to 24 months.

Editorial standards