Gartner Says Organisations Can Cut Software Costs by 30 Percent Using Three Best Practices
Announcement posted by Gartner 20 Jul 2016
Savings Too Large to Ignore with Software Spending in Australia to Hit $10.6 Billion in 2016
Many organisations can cut spending on software by as much as 30 percent by implementing three software license optimisation best practices, according to research from Gartner, Inc. The keys to reducing software license spending are application configuration optimisation, recycling software licenses and by using software asset management (SAM) tools.
Hank Marquis, research director at Gartner, said achieving software savings is a complex exercise, but the potential savings are just too large to ignore.
"Automated software license optimisation is a relatively new discipline and most organisations are at lower levels of maturity, said Mr. Marquis. "The variety of license 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."
According to Gartner's latest global IT spending forecast update, organisations will spend $332 billion on software in 2016. In Australia, software spending will total A$10.6 billion in Australia; and in New Zealand, NZ$1.4 billion in 2016.
In more than 800 Gartner client inquiries regarding SAM tools between May 2015 and March 2016, organisations with mature software license optimisation processes that were automated using SAM tools reported reducing software expenses, on average, by 30 percent within the tools' first year of operation.
According to Gartner, organisations can cut software spending using three best practices.
1) Optimise Software Configurations
Software from large publishers has complex use rights and is costly. The default configuration for most software is normally the most expensive for clients as well. This blend of complexity and high cost offers your best chances to cut spending.
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 your savings could be in the millions of dollars," said Mr. Marquis.
2) Recycle Software Licenses
Recycling software licenses is the recovery of unused license rights for reuse to avoid new license purchases. License recycling will reduce software spending as well as support and maintenance costs.
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 license optimisation processes and building them into their daily IT operational activities.
Recycling requires metering to spot unused, underused or misused software. For example, a user may have a piece of software installed but never actually use it — or perhaps the user only require a viewer. SAM tools, and some client management tools, can provide this functionality.
3) Use SAM Tools
It is hard to optimise software spending because licenses are so complex. Optimizing complex licenses manually is labour-intensive; it requires specialised knowledge and does not scale. Larger enterprises will need a SAM tool. A SAM tool can automate, accelerate and improve manual processes. It can pay dividends over manual alternatives, and can often pay for itself.
Gartner clients can read more in the report "Cut Software Spending Safely With SAM."
Software cost optimisation will be discussed at the Gartner Application Architecture, Development & Integration Summit 2016 taking place July 25-26 in Sydney. Follow news and updates from this event using #GartnerAADI.
Application, customer and employee trends will be discussed further at the Gartner Application Strategies & Solutions Summit 2016, December 6-8 in Las Vegas. Follow news and updates from this event on Twitter using #GartnerAPPS.
About Gartner
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyse and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 8,100 associates, including more than 1,700 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.
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Hank Marquis, research director at Gartner, said achieving software savings is a complex exercise, but the potential savings are just too large to ignore.
"Automated software license optimisation is a relatively new discipline and most organisations are at lower levels of maturity, said Mr. Marquis. "The variety of license 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."
According to Gartner's latest global IT spending forecast update, organisations will spend $332 billion on software in 2016. In Australia, software spending will total A$10.6 billion in Australia; and in New Zealand, NZ$1.4 billion in 2016.
In more than 800 Gartner client inquiries regarding SAM tools between May 2015 and March 2016, organisations with mature software license optimisation processes that were automated using SAM tools reported reducing software expenses, on average, by 30 percent within the tools' first year of operation.
According to Gartner, organisations can cut software spending using three best practices.
1) Optimise Software Configurations
Software from large publishers has complex use rights and is costly. The default configuration for most software is normally the most expensive for clients as well. This blend of complexity and high cost offers your best chances to cut spending.
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 your savings could be in the millions of dollars," said Mr. Marquis.
2) Recycle Software Licenses
Recycling software licenses is the recovery of unused license rights for reuse to avoid new license purchases. License recycling will reduce software spending as well as support and maintenance costs.
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 license optimisation processes and building them into their daily IT operational activities.
Recycling requires metering to spot unused, underused or misused software. For example, a user may have a piece of software installed but never actually use it — or perhaps the user only require a viewer. SAM tools, and some client management tools, can provide this functionality.
3) Use SAM Tools
It is hard to optimise software spending because licenses are so complex. Optimizing complex licenses manually is labour-intensive; it requires specialised knowledge and does not scale. Larger enterprises will need a SAM tool. A SAM tool can automate, accelerate and improve manual processes. It can pay dividends over manual alternatives, and can often pay for itself.
Gartner clients can read more in the report "Cut Software Spending Safely With SAM."
Software cost optimisation will be discussed at the Gartner Application Architecture, Development & Integration Summit 2016 taking place July 25-26 in Sydney. Follow news and updates from this event using #GartnerAADI.
Application, customer and employee trends will be discussed further at the Gartner Application Strategies & Solutions Summit 2016, December 6-8 in Las Vegas. Follow news and updates from this event on Twitter using #GartnerAPPS.
About Gartner
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyse and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 8,100 associates, including more than 1,700 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.
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