| | By Mick James
About the only thing
that’s certain about the
economy at the moment is
uncertainty – and the
need to conserve cash,
which can lead to some
difficult questions
about headcount. Should
companies preserve their
skill base in case
there’s a bit of an
upturn early next year –
or cut now before things
get worse?
So I’m always
interested in hearing
about ways to save money
that don’t involve
people losing their
jobs, and was surprised
to hear that there was
much to be done in the
area of software
licences.
For most companies
the main area of
business risk around
software licensing is
seen as compliance. It’s
pretty easy for your
installed base to
outgrow what you’ve
actually paid for and
that can be expensive if
you’re found out. But
with growth off the
agenda, most companies
would also assume that
this risk is taken to
the back-burner.
Not so, according to
James Rowlands of
software efficiency
consultancy Liken, which
is taking a new approach
to software asset
management.
“In the old days it
was all about inventory
and licence management –
about seeing what you’ve
got and plugging the
gaps,” he says. “But | |
|
| | about a year ago we
realised that compliance
was not where we need to
be at the moment – cost
savings are all people
want to talk about.”
The problem with
inventory-based
approaches is that they
only match licences to
an installed base – not
to what people are
actually using, which
can lead to unnecessary
expenditure.
“Most of the people
that operate in that
space are not
independent,” says
Rowland. “They are the
big resellers, and it’s
well recognised that
that kind of asset
management creates the
need to buy more
licences.”
Liken uses a number
of software tools that
monitor who is actually
using what on their
desktop – even down to
the amount of physical
activity from keyboard
and mouse – and then
compares that to the
software inventory.
“It’s the usage
monitoring that balances
the inventory
management,” he says.
“You might find that you
don’t need so many full
licences of Acrobat for
example.”
With the software on
a machine being worth an
average of five times
the cost of the
hardware, overlicensing
can add up to a
considerable cost – but
one that is not often
visible.
| |
| |
| | anything, then for
goodness sake don’t pay
maintenance on it.”
In portal
environments the costs
can be even higher.
“A trader in a
financial business
usually inherits a
package of six to eight
applications accessed by
a web portal and, as
often as not, only uses
three or four of them,”
he says. “A Bloomberg
licence alone is £15,000
a year – you can fine
tune those licences to
what each trader
actually needs.”
Similarly in server
environments, such as
Oracle, this approach
can give an independent
assessment of what is
being used, rather than
simply relying on the
vendor for the
information. But given
that many licences are a
one-off purchase, many
organisations may
believe that the
opportunity offered by a
review is small, but
that’s not the case.
“A lot of large
companies operate on
effectively a ‘run-rate’
of buying software,”
says Rowlands. “It
always surprises people
how much they’ve bought
and they don’t realise
how the clock is ticking
and how much is being
bought constantly.”
This ‘run-rate’ can
even continue when an
organisation is actually
shrinking.
“If you are | |
|
| | downsizing it’s a bigger
issue,” he says. “You
almost certainly have
surplus licences, but
because you don’t have a
handle you can get new
machines deployed and be
paying for new licences.
In the worst case
laptops get back into
circulation, data
cleansed and reimaged
with new licences
because people aren’t
informed.”
Rowlands reckons the
savings can easily be in
the region of £250 to
£300 a seat, so for a
2,000 person
organisation that could
easily be a £500,000
opportunity. His company
is always happy to do a
free “proof of concept”
on a small portion of
the estate, but the
biggest challenge is
getting to the right
decision-maker.
“The biggest problem
is that people see it as
an IT problem not a
financial problem or a
purchasing problem,” he
says. “We try to target
the CFO but the CFO just
knows that it’s software
and tries to point it in
the direction of IT. But
if it’s a £500,000
saving the last thing
you want to do is to see
that stay in the IT
department.”
I couldn’t agree more
– £500,000 could keep a
lot of people in work
for a long time. I can’t
help but wonder how many
other opportunities like
this there are out
there. | |
|
| |
“Bought software
seems to disappear down
a drain,” says Rowland.
“It’s not logged as an
asset and depreciated
over two years, but it
tends to exist over four
to six years. One thing
we do for people is due
diligence – they want to
put a value on the
software assets they are
buying, to know what
people are actually
using and it’s clear
that until the last
couple of years this is
something people don’t
have a grip on.”
For example, large
companies will often
have an enterprise
licence for the full
suite of Microsoft
Office, paying for a lot
of software that is
never used.
“Only a tiny
proportion of users will
be using MS Access, for
example,” says Rowlands.
“So there’s scope to
renegotiate – in many
cases, if you’re using
the right technology to
assess usage, Microsoft
will accept that it
isn’t being used and
negotiate a lower price.
Even if you don’t
actually uninstall | |
|
Previous Page 
