Industry Watch: It's worth it to track software spending
August 15, 2009 —
(Page 1 of 3)
In difficult economic times, software organizations make difficult decisions. Should they trim the workforce to trim costs? Should they reduce the number of projects to maximize their efforts in areas with the greatest return? Should they shutter a location to consolidate people and equipment into fewer sites?
Some of these decisions can be based on hard data. IT managers can easily find out how many people they have on their payroll, or the costs of running multiple projects, or how much they pay for rent, or what the value of a property is that they might want to sell. Others are educated guesses, such as the ROI of a software project.
There is another, often overlooked, area that can generate significant savings within an organization: software license management. Licenses come in all shapes and sizes, from user and concurrent licenses to more flexible pay-as-you-go subscription terms.
According to Howard Hastings, IT asset management evangelist at CA, companies tend to prefer simple volume licensing because it’s simple to implement. They have 1,000 workers, so they need 1,000 licenses. But what happens when 20% of the workforce is laid off? Do the companies recoup that money? Often, the answer is no; they may still be paying for 1,000 software licenses.
Hastings said software inventories often don’t give enough information to help companies manage their money. “Whether the software is used or not, if it’s found [in an inventory], it counts. Especially in larger organizations, there’s no real way of knowing if the software is preloaded under OEM, or part of a volume license, or even an evaluation copy that can no even be activated,” Hastings explained. "This is information that’s hard to get.”
In fact, he said, his experience indicates that two-thirds of the companies he talks with don’t do anything at all to manage software, because of the difficulty of doing so. “They’re throwing darts at a wall,” he said.
There are a number of factors conspiring against solid accounting of software. PCs and server boxes can be counted. But what lies inside is often almost intangible, Hastings said. Individuals think their “personal computer” is just that, even though it’s owned and maintained by the company.
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