Enterprise Software

Report: Unused enterprise software is costing businesses a fortune

As much as 38 percent of enterprise software is going to waste. That accounts for billions of dollars a year, and it's probably affecting you too.

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Image: Brandon Vigliarolo/TechRepublic

1E recently released a report on software usage and waste, and its findings probably won't surprise anyone who spends a lot of time managing business software: The average large enterprise is wasting approximately $7.4 million every year on under- and unused software. While that number will be smaller for companies with less than the 30,000 seats that they use as their average the numbers are still high.

If you make IT decisions, you know that enterprise licenses aren't cheap—every single seat is worth anywhere from hundreds to thousands of dollars. The report's findings highlight a need among businesses to better manage software licenses, potentially saving millions a year.

How much waste is being generated?

1E's study was done in the US and UK, and it found that approximately $34 billion in yearly licensing waste is being generated. 30 percent of applications go completely unused, and a further eight percent are used less than once a month.

SEE: Four Microsoft licensing missteps that could cost you big bucks (Tech Pro Research)

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Image: Brandon Vigliarolo/TechRepublic

Using the example of a 30,000-seat company, the report goes on to mention that over $2 million could be saved every year if licensing were controlled more precisely.

What's being wasted?

The graphic below, featuring the top 10 most wasted enterprise licenses, reveals a lot about where businesses are spending unnecessary money. Camtasia, for example, is going unused in 67 percent of installations, with Crystal Reports nipping at its heels with 63 percent.

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Image: Brandon Vigliarolo/TechRepublic

Waste varies based on industry, too. The education world wastes approximately 47 percent of enterprise licensed software, and (surprisingly) the government sector wastes the least at just 28 percent.

All in all, the average industry is wasting somewhere between 35 and 39 percent of the licenses it purchases.

How can businesses stop licensing waste?

Almost every business is using some kind of specialized software, and there's a good chance it doesn't come cheap. Any organization that uses enterprise licensing needs to ask itself whether the software is being used enough to justify the costs.

Audits should be performed regularly to determine how often applications are being used. That data can then help determine whether to reduce, increase, or maintain the level of licenses purchased for the next year.

SEE: Best practices for software license management (TechRepublic)

Take advantage of licensing pools when they're available. You may have 13 people who work in AutoCad, but you might only need seven or eight licenses at any given time. Those licenses can be checked out as needed, saving money with little to no impact on users.

While reducing license waste won't result in immediate savings it will make a difference over time. The report gives three specific areas of savings when licensing is tightly controlled: fewer renewal purchases, a reduction in maintenance, and a reduction in the risk of vendor audits.

The report is worth reading in detail—you may just find an area where you could save tons of money a year.

The 3 big takeaways for TechRepublic readers

  1. 1E reports that 38 percent of enterprise software licenses are going unused, resulting in billions of wasted dollars a year.
  2. Some applications are being wasted in as many as 67 percent of installations.
  3. Proper auditing of employee program use needs to be done to ensure software, and money, aren't being wasted.

Also see

About Brandon Vigliarolo

Brandon writes about apps and software for TechRepublic. He's an award-winning feature writer who previously worked as an IT professional and served as an MP in the US Army.

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