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REDUCE, RECLAIM AND RECYCLE YOUR SOFTWARE TO DELIVER DRAMATIC COST

REDUCTIONS AppClarity identifies unused software and enables you to remove and reallocate it,

radically cutting costs and reducing waste

GEOFF COLLINS

RICHARD CUDD

MARTIN ANDERSON

1E

APRIL 2011

ABSTRACT: This whitepaper sets out why 1E believes that organizations could save millions of dollars by managing

their software licenses more efficiently, reallocating them across the business to reduce waste and dramatically

cutting costs by removing licenses they don’t need altogether.

© 1E 2011 2

Contents

The ticking time bomb ............................................................................................................................................... 3

Reduce, reclaim, recycle ............................................................................................................................................ 4

Risk versus reward..................................................................................................................................................... 6

A different approach ................................................................................................................................................. 8

References ................................................................................................................................................................ 9

© 1E 2011 3

The ticking time bomb

“There’s a software license time bomb armed, ticking, and buried deep in the

foundations of many a Global 200 firm’s elegant IT architecture.”

Defuse Software License Time Bombs with Software Asset Management, Forrester, July 9 20101

As large firms rely more and more heavily on software applications to manage even the most mundane parts of their

business, they face a daily challenge. Defusing the ticking time bomb in their midst - one that could explode at any

moment when they are audited by a software vendor.

With the number of audits from software vendors on the rise, many organizations have come to believe that buying

their way out of trouble is often the safest solution. 61% of Software Asset Managers, surveyed in recent research

conducted on behalf of 1E by Opinion Matters, said that compliance and reducing business risk are their main

drivers.2

On the face of it, over licensing on software that is critical to your business may seem like a sensible option,

especially when the alternative could be heavy fines, substantial back-charges and legal action - not to mention

potentially damaging press coverage.

By focusing entirely on compliance, more and more organizations in the US and UK are accepting that they will need

to spend ever increasing sums paying for software. The problem comes when we consider that much of that

software is destined to be configured and deployed to every users’ machine, but then remain there evermore,

forgotten and unused. This is an enormous waste of money.

Nearly two thirds of organizations polled by Opinion Matters suspected that they had unused software on their

machines.2 Even more worryingly, over one third of those organizations admitted that they had no way to quantify

the problem.2 These figures are supported by research conducted on behalf of 1E by Vanson Bourne in 2010 that

suggested that nearly three quarters of users believe they have unused software on their PCs.3

So every year you buy more and more licenses and incur higher and higher maintenance costs just in case a vendor

wants to conduct an audit, but now you’re buying them for software you’re not even using.

So what about the cost of all that unused software? 88% of the license managers in those organizations surveyed by

Opinion Matters estimated that it was more than $100 per PC, with one quarter estimating that it could be as high as

$999 per PC.2

© 1E 2011 4

Reduce, reclaim, recycle

Software Asset Management (SAM) has been the traditional tool by which many organizations have tried to defuse

the license time bomb, by identifying any gap between the licenses they have and the licenses they are paying for.

But traditional SAM is passive - it only identifies the gap in preparation for a vendor audit. What it doesn’t tell you is

the amount of licenses you actually need. Traditional SAM tells you how much extra you might need to pay, but it

doesn’t tell you how much you are wasting and where you could save money.

Actively identifying and reporting on unused software, on the other hand, can automate the correlation of

installation, ownership and critically need. It provides a central resource for on-going compliance while responding to

and reducing liability in the short, medium and long term. It gives you better control of your software estate by

identifying what you have installed, what you own and what is actually used. It then helps to reduce waste by

removing unused licenses from users PCs, either permanently or to be redeployed across the enterprise.

SAM will only ever identify software that is being used, and whether or not that software is licensed.

By identifying unused software, direct removal of waste or redeployment become possible. This is shown below:

Licensed Unlicensed

Used

Value

Liability

Unused

License waste

(redeploy)

License waste

(remove)

Organizations employing this strategy can maximize software utilization and efficiency, removing the risk of non-

compliance while reducing overall IT costs by as much as 30%, with a typical return on investment within the first

year by cutting software license waste.4

Sounds great doesn’t it? In many organizations, actively identifying unused software can represent one of the few

remaining ways that substantial IT savings can be realized. But just 9% of the organizations taking part in the Opinion

Matters survey said that they uninstalled and redeployed software on a regular basis, with 14% saying they had done

so in the past, but only for one or two applications.2

© 1E 2011 5

Given the amount of money that could potentially be saved, it seems clear that actively managing software assets

offers substantial savings. So what’s stopping everyone else?

The biggest obstacle is usually fear. 19% of respondents said that they had considered removing unused software,

but that they were concerned about negative user reaction. A further 18% said they thought removing unused

software was too risky for their business and 11% said they didn’t think they had the right tools in place.2 That’s

nearly half of respondents saying that they had looked at and considered removing unused software but that they

were unwilling to take the next step. If each of those organizations has just 1,000 users, that fear could be costing

them nearly $1 million per year.2

© 1E 2011 6

Risk versus reward

“ Following a few simple steps can radically reduce risk and simplify processes to pool license entitlements

among authorized users, ensuring compliance at all times with contractual

obligations and a more effective return on software investments.”

Defuse Software License Time Bombs With Software Asset Management, Forrester, July 9 20101

If the biggest obstacle to tackling software waste boils down to fear, let’s look at those concerns in a little more

detail.

1. Negative user reaction

No organization wants to be seen as draconian by its users and employees. Many users think of their company-issued

PC or laptop as ‘theirs’, so license managers, IT Directors and CIO’s worry that any move to remove software

applications from a user’s PC will be seen as unnecessarily intrusive.

But research would suggest that many users are well aware of the problem of unused software on their desktops.

Over one third of users questioned last year as part of the 1E Help Desk Efficiency Report said that they believed they

had five or more applications installed on their machine that they never used.3

What if you could demonstrate to every user how much unused software there is on their machine and then show

them how much that unused software is costing their organization every year?

In a climate of economic uncertainty, showing your users that you take cost control and efficiency seriously by

identifying and removing unused and expensive applications can actually help to improve relationships with your

employees. Remember that many of them are more worried about their jobs and pensions than they are about the

software on their desktop.

There are several other ways to allay user concerns. For example, you could provide them with an opt-out

mechanism, automating the reclaim of licenses across the enterprise while giving every user a choice as to which

applications they get to keep and which get removed.

You could also offer them the ability to find, select and download applications they need on demand using an

enterprise app store. So if, in a few weeks or months’ time, a user finds that they need access to an application that

has been removed, they can reinstall it themselves. Users are less likely to be concerned about the removal of

software from their machine if they can get those applications back in a matter of minutes.

2. Too much risk

One of the most common risk-related concerns is in managing applications that are only used once or twice each

year, for example to run an end of year performance report.

© 1E 2011 7

Depending on how the uninstall of licenses is managed, an automated reclaim of unused applications could

conceivably result in this software being removed from a user’s machine, thus leaving them unable to do their job. At

a cost of say $400 per year per application, the savings generated by the removal of those applications would seem

more than trivial if, when that user next tries to run that report they find the application has been uninstalled

without their knowledge.

With user centric software reclaim strategy these concerns can be managed either by allowing your users to decide

what gets reclaimed and what doesn’t (as discussed in 1 above), or by simply ring fencing named applications so they

are never ever removed from the machine.

3. The wrong tools

Many organizations worry that using traditional Systems Management or Software Asset Management tools is not

only time consuming but frequently devoid of any identifiable ROI.

In most cases, traditional tools focus on compliance and license liability - they tell you how much you have installed

versus how much you have licensed - so you can ensure you are compliant in the face of a vendor audit. They almost

never tell you where those licenses are, how they could be better deployed or how much money you could save by

removing them altogether.

Unfortunately, even if traditional tools could identify unused software, many of those unused applications won’t be

packaged in your Systems Management platform to allow automated uninstall. The process to recover unused

licenses can become as cumbersome and time-consuming as the process of finding them in the first place.

Even here, there is a straightforward answer - using an active, user centric software reclaim policy. One that is

capable of identifying what software you have and where and how it is being used before helping you to then reclaim

and redeploy your applications.

In short, one that is capable of making a real difference to your business.

© 1E 2011 8

A different approach

“Once the software license time bomb is stable, it’s time to defuse it permanently, guaranteeing

compliance and license costs containment by automating the process flows for allocating and releasing

license entitlements from a dynamic license pool to ensure the firm is always contractually compliant but

avoid purchasing licenses in excess of its requirements.”

Defuse Software License Time Bombs with Software Asset Management, Forrester, July 9 20101

AppClarity from 1E will make that difference.

Uniquely focused on software waste, AppClarity delivers compliance without complexity by filtering out irrelevant

data to show just licensable software and organizing it by financial impact or vendor so you can quickly focus on

reducing your software spend.

By making sense of what software you have, why you have it, and where and how it is being used, AppClarity allows

you to make informed strategic and operational decisions. For example, setting policies to silently reclaim and

reallocate licenses from one user to another if an application has not been used for a set period.

AppClarity enables your organization to make immediate reductions in software costs by analyzing all your

applications and providing you with actionable results, reducing your spend within one month. By identifying the

software you actually use, then automatically removing what you don’t need, AppClarity financially quantifies all

unused software, across all applications and across all machines.

AppClarity is also user centric. It can be set to offer every user a per application opt-out option, either assuming that

a reclaim will be okay as long as the user does not object or waiting for a prompt from the user as to what to do next.

It also highlights the cost of every software license to the user, because users are often more willing to return a

license to software they no longer use when they realize it might be costing the organization $400 each year.

Deploying AppClarity alongside other 1E products like Shopping™ delivers a solution that further enhances license

control by offering the opportunity to rent applications on a short term basis to users. Using rental ensures that

short term needs do not become long term liabilities. It also allows users to find, select and download applications

they need on demand. If, for example, a user has not used an application in several months and it has been

reclaimed by AppClarity, when they need it again they can find it, download it and begin using it again within minutes

through Shopping.

At first glance, reclaiming and reusing software licenses seems complex and daunting. But with the right tools and

processes in place, it can yield massive savings without any of the perceived the risks.

© 1E 2011 9

References

1 Defuse Software License Time Bombs With Software Asset Management, July 9, 2010. Available from:

http://www.forrester.com/rb/Research/defuse_software_license_time_bombs_with_software/q/id/57085/t/2

2 Software Efficiency Report 2011. Opinion Matters survey on behalf of 1E, 2011

3 Help Desk Efficiency Report 2010. Vanson Bourne on behalf of 1E, 2010

4 Saving money through software asset management? Computer Weekly, 13 December 2010