What options do you have to save software costs?

software costs

If you’re using software, you know it comes with a large amount of different “costs”: costs related to the initial purchase of your software licenses (CAPEX), costs for your renewal of support and maintenance (OPEX), costs to move your on premises deployments to the SaaS, PaaS and/or IaaS deployments. All these costs can be significant. But is there something you can do to achieve cost savings? Even though each publisher has its own particularities, the below list may help you to find an option to save costs based on your business’s requirements.

Choose the right licenses – Don’t overspend on software functionalities that you don’t use. For example, SAP offers different Named User licenses such as Professional User, Limited Professional User and Employee. The rights granted differ for each metric. Many times, companies purchase or allocate an expensive license such as Professional User license to an individual who only uses it for the operational functionalities of a Limited Professional or an Employee. If this sounds familiar, you can make sure that next time when you renew or purchase licenses, you evaluate the users’ needs beforehand.

Choose the most cost efficient licensing model – Some software publishers offer different licensing models to accommodate their end user’s needs. For example, Microsoft SQL Server can either be licensed on a per server + CAL or per core licensing model. Or licensing CALs per device versus users. You should check which one is more cost efficient for your company, both now and in the future.

Swap licenses – Some software publishers allow their end users to swap/exchange shelfware licenses they have for new licenses at no additional costs. This can be a huge cost saving if you use licenses on a project basis. Tip: make sure your agreement includes the option of exchanging licenses next time when you renew it or make a large transaction.

Reuse/recycle licenses – If you find yourself in the need to purchase new licenses check first if you can harvest or re-allocate any of your existing licenses that you already have in place. Maybe some of your employees left the company and you can reassign their licenses to new hires. Or some computers broke and the Windows licenses that were installed on them were purchased as FPP (Fully Package Product) and you can just reassign those licenses to new computers. Make sure you’re always on top of your business’s needs before spending money on new licenses.

Check your licenses’ rights – Many products have other licenses or features included with either a full or restricted use right. Before ordering new licenses check if your current licenses don’t cover your needs.

Termination of support – You should evaluate on a regular basis the necessity of support and take an educated decision to renew or terminate your support maintenance. Bear in mind though, that once you terminate your support you can typically bring it back only under support maintenance (reinstate it) with maybe even higher costs.

Choose the right level of support – Software publishers sometimes offer different levels of support at various prices. Maybe the expensive “enterprise support” you currently have is more than you need, and you could do just fine with the cheaper “standard support”. Or is a third-party support vendor maybe an alternative? Make sure you are always aware of your organization’s needs and choose what is most beneficial at each moment in time.

Eat what you need not all you can eat – Don’t get yourself trapped in an agreement for more licenses than you need just because the sales person puts on the table a big discount. Ask yourself if this is something you need now or in the future or how will the support maintenance fees for the licenses you purchase today develop over the next 5 to 10 years. Is this still a good deal?

Businesses differ as much as software publishers. Therefore, there’s no universal solution to save costs on software. The above is not an exhaustive list and there’s much more to consider when it comes to making decisions regarding a company’s software estate. My view on the best approach is to asses, plan and have the right knowledge that will help you to define and execute the right strategy to save costs.

Since 2015, Roxana is a Software Entitlement Specialist focused on educating clients on licensing issues with Oracle, SAP and Microsoft. In her role, she works with customers to assist them in understanding and improving their software environment by reviewing their software license agreements and provide them advice regarding legal and financial risks. With a legal background, she also helps customers identify legal weaknesses in their contracts and optimize them.