How to avoid spending on licenses you don’t use

avoid shelfware licenses

There is a common “habit” among many companies to pay support fees on software licenses that are not used. This software is called shelfware. Despite not used, these licenses still require annual maintenance fees. Most of the times, end users are not even aware of this and therefore fail to address the possibility of reducing shelfware maintenance costs during negotiations with software vendors. As software maintenance costs typically increase every year, the financial impact of shelfware will steadily increase.

In an attempt to protect their support revenue, software vendors have contracts, policies and clauses that complicate disposing shelfware — for example, Oracle has its repricing policy and reinstatement fees, SAP has its all-or-nothing support policy and Microsoft requires Software Assurance to gain server mobility rights. Such support policies don’t insist on extended maintenance after the first year, but they make it very challenging and usually financially unattractive to cancel an existing support agreement and therefore reduce maintenance costs.

End users that own shelfware licenses, but continue to buy products from the same vendor without trying to trade in their shelfware are ignoring significant leverage potential. For example, an SAP user that wants to move to the SAP Hana platform can negotiate a significant cutback on the shelfware. In Oracle’s case, this potential leverage applies to Engineered Systems such as Exadata Database Machine and Exalogic Elastic Cloud, or when moving to the cloud.

Shelfware is a major issue for many organizations – but how do you avoid falling into the shelfware pitfall? Do you know how and when to dispose of your unused licenses?

Read our latest white paper to gain insight into shelfware and your options to avoid spending a consistent part of your budget on software licenses you don’t use.

This article was published on 09-01-2018