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Savings too big to ignore

Gartner says organisations can cut software costs by 30 per cent using three best practices

The analyst’s latest global IT spending forecast update predicts that organisations will spend $332 billion on software in 2016.

By implementing three software licence optimisation best practices – application configuration optimisation, recycling software licences and by using software asset management (SAM) tools, Gartner says many organisations can cut spending on software by as much as 30 per cent.

IT leaders must look for savings in the configuration of software, especially data centre software. “Such changes appear simple in hindsight, but they are not obvious, and savings could be in the millions of dollars,” said Gartner Research Director Hank Marquis.

Gartner also advocates licence recycling as a means to reduce software spending as well as support and maintenance costs, warning that recycling requires strong process control. However, with many IT organisations at low maturity levels, most could cut their software spending by maturing their recycling and licence optimisation processes and building them into their daily IT operational activities, the analyst stated.

The use of SAM tools is the third best practice Garner suggests organisations adopt. The report ‘Cut Software Spending Safely with SAM’ points to the fact that it is hard to optimise software spending because licences are so complex. Optimising complex licences manually is labour-intensive; requires specialist knowledge and does not scale. Larger enterprises will need a SAM tool, which can automate, accelerate and improve manual processes, this according to the analyst can pay dividends over manual alternatives, and can often pay for itself.

In more than 800 Gartner client enquiries regarding SAM tools between May 2015 and March 2016, organisations with mature software licence optimisation processes that were automated using SAM tools reported reducing software expenses, on average, by 30 per cent within the tools’ first year of operation.

Marquis said achieving software savings is a complex exercise, but the potential savings are too large to ignore. “Automated software licence optimisation is a relatively new discipline and most organisations are at lower levels of maturity, he said. “The variety of licence 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.”

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