How to master the art of software licensing

Coming to terms with software licensing takes time and resources. But failing to ensure software is properly licensed can lead to penalties and excessive software costs, finds Stephen Pritchard in our latest Business of IT special feature.

The position becomes even more complicated when technologies such as virtualisation and cloud computing are added into the mix. In some cases, running such environments needs different licences; sometimes it needs additional licences and in some cases, it might not be allowed at all.

Under licensed, over licensed

The risks around software licensing are not only that a business is under licensed. Over licensing is almost as big a problem. Although businesses will not be fined for over licensing, they will be paying more than they need for their software. They will also, as a rule, pay more too for maintenance and support. Much of the potential saving in licensing costs identified by IDC stems from removing redundant or duplicate licences from the network.

As Patrick Gunn, vice president at Flexera Software, a vendor of licence management tools, points out, a third of overall IT costs go on software. Over licensing and inefficient software purchasing can quickly make a large hole in any budget.

As well as fairly obvious overspends, such as continuing to pay for maintenance on retired or less-used applications, or failing to reuse or in some cases retire licences for staff who have left the business, Gunn points to other causes.

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