Supporting growth and innovation during times of economic uncertainty means CIOs are under pressure to do more with less. Investment in technology, specifically software, has been a failsafe way to ensure that their businesses continue to be lean, but remain efficient. However, a new Flexera Software Survey, prepared jointly with IDC, highlights that over 56% of the enterprises polled said that 11% or more of their software spend in the last 12 months is associated with un-used software, commonly known as ‘shelfware’.
According to IDC, the market for packaged software was about $325 billion in 2011i, suggesting that the global overspend on purchased, but unused software could be staggering.
“Corporations adjust quickly to economic realities, and in this economic downturn they’ve become expert in leveraging software to offset leaner staff,” said Steve Schmidt, Vice President of Corporate Development at Flexera Software, developer of Software Licence Optimisation solutions. “But they’ve developed a blind spot – investing heavily in efficiency-creating technologies like software without really understanding how to ensure that this critical asset is being optimally used. Consequently, an unacceptable proportion of that expenditure is wasted.”
Alarmingly, the survey also reveals that these businesses are well aware that they are bloated with expensive shelfware. A third of all respondents indicated they are either dissatisfied or very dissatisfied with their current method for managing software licences and usage (almost half of large companies over $1 billion in revenues reported dissatisfaction).
Moreover, respondents admitted that they did not have the systems in place to ensure optimised use of software. For instance, due to the complexity of software licences and tracking licence usage, simply understanding the number of licences purchased and used is insufficient. Product use rights (i.e. upgrade rights, downgrade rights, secondary use rights, etc.) contained in the software contract detail how software licences can be used, by whom, in what circumstances and on what devices. Only by optimising the software licence estate – i.e. reconciling product use rights with how employees are actually using the software – can organisations hope to buy only what they need and use what they have. Whether enterprises take into account product use rights in the management of their licences is critical to eliminating wasteful purchasing.
According to the survey, almost a third of respondents do not apply product use rights to optimise their software use – resulting in significant shelfware problems.
As companies grow in size, merge or increase investment in software, the possibility of software licences being ‘shelved’ increases. 44% of survey respondents indicate that their software budgets are likely to increase over the next 18 to 24 months. A simple internal audit is the stepping stone to determining unused licence spend, but working towards complete licence optimisation should be a key goal for enterprises.
“The lesson is clear. Leveraging high tech assets like software in order to drive efficiencies and cut costs is critical for any company,” said Schmidt. “But software is a complex asset to maintain and organisations have to be smart about it. If they’re not up to the task of implementing the processes and technology to optimise their software use – they likely will be wasting much of the efficiency gains software enables by creating shelfware bloat.”
Click here to access the complete survey results.
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