Companies today are doing everything they can to cut costs.
From layoffs to forced furloughs and salary reductions, large and
small firms alike are scrambling to find a way to wring out just a
few more pounds in savings. For IT departments, that often
translates into delayed projects and purchasing freezes. But while
many companies are embarking on what they believe to be cost
cutting initiatives, they are actually missing a big chunk of what
they could save,writes Richard Muirhead, CEO atTideway.
Figures from the Office of National Statistics show that UK
unemployment rose by 281,000 to 2.38 million in the three months to
May 2009. While that represents a cost savings in terms of
headcount - what about the cost savings in terms of IT assets? The
truth is that many companies that were forced to make employees
redundant to meet cost cutting mandates probably don't realise they
have a serious mismatch between IT assets they previously purchased
and staff that are still around to use them.
Typically about 5% of hardware is orphaned in corporate
datacentres. Each of those servers has associated administration,
software licence, facilities, power and cooling costs. Perhaps more
startling, Forrester Research estimates that more than one in five
businesses that have had software audits are holding on to unused
software, and the average company spends 10% of its software
maintenance payments on shelfware. Add these up and we're talking
real money.
Most businesses historically rely on tribal knowledge and ad hoc
IT record-keeping to track hardware assets and software licences.
But with this crucial information in the hands of a few
individuals, orphaned machines and unused licences can slowly pile
up and security can be jeopardised. When redundancies hit, that ad
hoc tribal knowledge may even walk out the door.
Any IT cost cutting programme should include software licence
management to identify and eliminate unused licences in the
datacentre. In fact, most firms could quickly reduce software
maintenance costs by around 5% simply by identifying over-licensing
and eliminating extraneous product instances. Not surprisingly,
licence management and optimisation are now becoming attractive to
IT executives as a means to lower overall software spend and reduce
compliance risks.
Before a company can embark on a software licence management
programme, they first need to understand what is actually being
used in the environment. That may seem difficult in these
challenging times. Fortunately, leveraging tools that provide deep
visibility into where and how software products are deployed will
let firms easily and quickly run a single, high-value internal
software audit. Armed with that information, they can optimise
their hardware assets and software licences and structure an
end-of-life programme to improve efficiency and identify additional
cost savings opportunities.
As an example, a major European power utility used Tideway to
reduce its Oracle licence renewal exposure from £3.2m to £850,000
simply by getting a better understanding of their licence
position.
Your licences are lonely. They're sitting out there taking up
space and eating up money. Can you really afford to leave them
there?