Savings Too Large to Ignore as Global Software Spending Forecast to Hit $332 Billion in 2016
Many organizations can cut spending on software by as much as 30 percent by implementing three software license optimization best practices, according to research from Gartner, Inc. The keys to reducing software license spending are application configuration optimization, recycling software licenses and by using software asset management (SAM) tools.
Hank Marquis, research director at Gartner, said achieving software savings is a complex exercise, but the potential savings are too large to ignore.
"Automated software license optimization is a relatively new discipline and most organizations are at lower levels of maturity, said Mr. Marquis. "The variety of license entitlements also makes it tough for IT leaders to spot savings, especially in environments with many software publishers and titles. But it's worth pursuing, as spending reductions contribute directly to the bottom line as gross profit."
According to Gartner's latest global IT spending forecast update, organizations will spend $332 billion on software in 2016.
In more than 800 Gartner client inquiries regarding SAM tools between May 2015 and March 2016, organizations with mature software license optimization processes that were automated using SAM tools reported reducing software expenses, on average, by 30 percent within the tools' first year of operation.
According to Gartner, organizations can cut software spending using three best practices.
1) Optimize Software Configurations
Software from large publishers has complex use rights and is costly. The default configuration for most software is normally the most expensive for clients as well. This blend of complexity and high cost offers your best chances to cut spending.
IT leaders must look for savings in the configuration of software, especially data center software.
"Such changes appear simple in hindsight, but they are not obvious, and your savings could be in the millions of dollars," said Mr. Marquis.
2) Recycle Software Licenses
Recycling software licenses is the recovery of unused license rights for reuse to avoid new license purchases. License recycling will reduce software spending as well as support and maintenance costs.
Recycling requires strong process control. However, with many IT organizations at low maturity levels, most could cut their software spending by maturing their recycling and license optimization processes and building them into their daily IT operational activities.
Recycling requires metering to spot unused, underused or misused software. For example, a user may have a piece of software installed but never actually use it — or perhaps the user only require a viewer. SAM tools, and some client management tools, can provide this functionality.
3) Use SAM Tools
It is hard to optimize software spending because licenses are so complex. Optimizing complex licenses manually is labor-intensive; it requires specialized knowledge and does not scale. Larger enterprises will need a SAM tool. A SAM tool can automate, accelerate and improve manual processes. It can pay dividends over manual alternatives, and can often pay for itself.
Gartner clients can read more in the report "Cut Software Spending Safely With SAM."
Software cost optimization will be discussed at the Gartner Application Architecture, Development & Integration Summit 2016 taking place July 25-26 in Sydney. Follow news and updates from this event using #GartnerAADI.
Application, customer and employee trends will be discussed further at the Gartner Application Strategies & Solutions Summit 2016, December 6-8 in Las Vegas. Follow news and updates from this event on Twitter using #GartnerAPPS.
Gartner, Inc. (NYSE: IT) is the world's leading research and advisory company. The company helps business leaders across all major functions in every industry and enterprise size with the objective insights they need to make the right decisions. Gartner's comprehensive suite of services delivers strategic advice and proven best practices to help clients succeed in their mission-critical priorities. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has more than 13,000 associates serving clients in 11,000 enterprises in 100 countries. For more information, visit www.gartner.com.
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