Is Under Licensing or Over Licensing Worse?

  • Is Under Licensing or Over Licensing Worse?

    A customer admitted that, for simplicity, every new user got the same ‘gold disk’ selection of applications on their laptops. In the case of job specific software, these were added on an ad-hoc basis. When usage metering was done on the software supplied on all the devices, it was found that some applications were only ever used by 15% of staff. In effect, the customer has been licensing compliant, but the cost had been exponential.

    Often businesses are over-compliant simply because they have more licenses than they need. While if organizations buy fewer licenses than they use, they are under- compliant. Software compliance risk can take several forms: (1) Operational risk – insufficient software license allocation and utilization which leads to uninformed business decision making. Also an audit disrupts your business and can take months to complete without license management technology to support the process (2) Financial risk – undisclosed liabilities, inaccurate budgeting and over expenditure on software licenses and if you’re not careful, can cost you big (3) Legal risk – contravention of software license agreements and an inability to meet corporate governance requirements.  Organizations prefer to over-pay upfront to outsmart the audit risk. So, while they aren’t losing a ton of money at once for failing an audit, they are losing it slowly

    It may not hurt at first, but over time being over-licensed costs more than failing an audit. When you fail an audit, you buy just enough licenses to close the gap, and often vendors demand you pay back-maintenance for the licenses too. It’s expensive, but the problem is a one-time cost – that can also be reduced or completely eliminated with SAM strategies. Companies who over-license to guarantee compliance also pay long-term for maintenance they don’t need. That adds up – and keeps adding up because the problem isn’t fixed.

    It means neither under licensing nor over licensing is good for the business. We need to make it right. Many organizations purchase wrong number of software licenses than they need because they have no way of knowing who is using what and as a result, over-compensate and over-estimate software license requirements.

    Does it matter to you? Of course, yes, with accurate software usage metering you could not only identify unused software and turn this into cash which could go straight back into your IT budget but also get rid all of compliance risks related.

    At the Business Software Centre we specialize in software efficiency. Our software usage metering solution – Rentsoft Meter – measures software usage by the minute for every user. It is quick and easy to conduct an assessment and provide your organization with a tailored Software Efficiency Rating chart along with ways to save money if you are not meeting benchmark efficiency levels. We commit that you will get 25% saving within the first 12 months.

    Is Over Licensing or Under Licensing worse?

    Is Over Licensing or Under Licensing worse?

    Admin

    Comments (2)

    • Maarten Karnekamp

      I would say: a little bit of over licensing is not that bad, but under licensing and over licensing in large amounts is very bad.

      Reply
    • Roger Williams

      Given the opportunistic way that some software vendors stiff customers for very large fees any software costs pale into insignificance to the fees charged by those vendors. Can be no coincidence that some of these vendors have very high growth , large profits and a share price that keeps on going up. I could name them but that would be breach of confidentiality. But its the same old dozen or so that keep cropping up.

      Just make sure you are over licensed with the right vendors would be my advice.

      Reply

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