What’s the problem?
In today's fast-paced and technology-driven world, software licenses play a crucial role in the functioning of corporations. However, it is alarming to note that a significant portion of these licenses goes unused or remains unutilized. On average, about 30 percent of software licenses purchased by corporations are never deployed or put to use. This statistic alone highlights the need for organizations to address this issue and find effective solutions to mitigate the problem.
While many organizations have recognized this trend in their desktop space and have implemented IT Asset Management (ITAM) practices to manage their software licenses efficiently, they often overlook a similar problem in their IT infrastructure space. This includes essential components such as wireless access points, switches, routers, security products, and collaboration tools. It is crucial for organizations to understand that having an ITAM program in place for their IT infrastructure is just as important as it is for their desktop software.
Software license management in the networking space is no longer a luxury; it has become a necessity. To ensure that organizations make the most out of their software investments and optimize their expenditure effectively, a mature and comprehensive ITAM program is essential. By implementing robust practices and processes, organizations can ensure that all software licenses are utilized to their full potential, eliminating unnecessary costs and maximizing their bottom line.
In conclusion, it is evident that the problem of unused software licenses is prevalent across various aspects of an organization's technology infrastructure. To address this issue, organizations must prioritize the implementation of ITAM practices not only for desktop software but also for their IT infrastructure components. By doing so, they can make informed decisions, optimize their software investments, and ultimately drive growth and success.
Why now?
Why has software usage in the IT networking space become top of mind for organizations these days?
Up until five years ago or so, organizations did not need to worry about how and if they were utilizing their software. For years, OEMs only assigned about five to seven percent of the cost of their product into the software. If an organization wasn’t fully utilizing the software they had purchased, they weren’t concerned about the wasted spend, as it was negligible. Furthermore, OEMs in the IT networking space did not have a formal process for auditing and keeping track of software. Software consumption was something that happened in the background; hardware was the main focus.
Software became more important around five years ago with the introduction of Service Defined Networks (SDN), collapsing product lines, virtual products, etc. Instead of five to seven percent, 25 percent to sometimes 100 percent of the cost of products became tied up in the software as opposed to the underlying hardware.
This has only increased over the past five years. If organizations do not deploy and use the licenses they have purchased, it means that they are wasting more money on software than ever before.
It also means that there’s the potential for higher operational costs to ensure that licenses are attached to the appropriate devices.
Where is the Opportunity?
If an organization is wasting around 30 percent of their software spend, there is a considerable amount of value that is potentially lying dormant in their asset install base. By adopting an IT Asset Management practice or building up their current practice to include software for their IT infrastructure, they can find the software they previously purchased for older projects, move them around appropriately and re-harvest their value.
So the question is not, “How can you afford to do software asset management for your IT infrastructure space?”, the question is, “How can you afford not to?”.
Flexera 2022 State of ITAM Report
RAY ALLEN is the critical infrastructure and networking industry’s leading IT Asset Management solutions provider, specializing in automation, integration and the transformation of data-driven lifecycle management into future-ready business strategies. Using next generation proprietary platforms and services, we enable the world’s largest networking vendors, service providers and resellers to increase revenue and drive operational efficiencies while delivering maximum customer value.