When it comes to licensing costs, knowledge is power

If you're running a business of any size, chances are you're a Microsoft customer. But unless you're an expert negotiator, there's a good chance you're paying too much for Microsoft licenses.

This applies to all the other software vendors equally, particularly those that play in the datacentre space. As companies invest even more in software, software asset management has become a crucial business function. However, high-priced talent and a broad vendor portfolio make it hard to do right.

Managing software licensing has become extremely complex, especially when you add in Software-as-a-Service (SaaS) and cloud environments. It requires tracking procurement, licensing and updates, and often partnering with multiple vendors ― which can quickly evolve into a tangled, inefficient web.

Decisions, decisions

With so many licensing options and variations, it is almost impossible for organisations to make the right decisions to help them get the most out of their digital estate. Entire books have been devoted to Microsoft licensing, and analyst firms even offer “boot camps” to help customers better understand Microsoft's licensing schemes.

While this was complicated enough in purely on-premises environments, the advent of cloud and Software-as-a-Service (SaaS) offerings have increased the complexity. Most companies aren’t aware of how much they are actually spending, and Shadow IT is adding to the problem as the consumption meter on the cloud is always running.

Tracking assets across this rapidly expanding environment can be a costly, risky venture. Companies waste an estimated $167 billion annually on unnecessary software costs, according to Gartner. While many invest in external resources for audit purposes, instead of just relying on in-house capabilities, they are still not seeing the results they need. Some companies are therefore starting to look for second and third opinions.

However, too many organisations offering Software Asset Management solutions are affiliated with vendors and LSPs. This leads to even greater confusion and a number of different opinions as to what the best option for your business is.

Know your options

The biggest mistake that organisations of all sizes make is they don't try to negotiate their licensing agreements. This makes sense, though, because most companies aren’t able to pinpoint what they currently have, much less what they actually need.

Software asset management is an enormous undertaking for any business. Tracking how much software exists within a company, which employees use it, what the contract dictates, whether the company is compliant, when renewals take place, and how much is being spent on software is challenging, to say the least.

Advisory services can free up internal resources for big picture thinking, rather than trying to make sense of various licencing regimes. Advisory services should go further than just figuring out what a company has installed, enabling the organisation to better interpret its digital estate in the context of business goals. This allows for the creation of a technology plan that can help the business reach its objectives in the most cost effective and optimised way possible.

Advisory services should ensure that a company is making the most of its technology stack, ensuring every application is being utilised correctly, that the business is not paying for too many seats, and that it can pass all audits. Most importantly, when a company is armed with the knowledge of how the business uses its software and applications, it can start making strategic decisions alongside gaining cost savings.

Money talks

While every business is different, and deserves a personalised and tailored approach, there are some industry standards that can help ensure cost efficiencies. Using industry discount averages is a good starting point to establish whether a company is over-spending.

The savings that come from optimisation can be huge, ranging up to multiple millions of dollars. However, this requires an in-depth understanding of the company’s licensing history, its current estate, the number of employees, and the applications these employees use. It also requires the expertise needed to ensure that today’s decisions will serve in the future.

With cloud investments growing, any optimisation conversation should look beyond the bill of materials and include SaaS and cost optimisation in the cloud. By better managing application use, improving spend, and reporting on value, the business can turn its technology stack into a strategic tool to help meet its goals.

Once the business has a better understanding of the software it currently uses (or doesn’t use), it can effectively strategise for the future. Leveraging specialist advisory services, organisations will not only gain a better handle on their spend, but prevent shadow IT and any risk issues that come with it. Knowledge is power and having an in-depth understanding of a company’s digital estate allows it to find new opportunities while better managing costs.

Contact us today to start saving time and money by optimising your digital estate.

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