How Not to Waste a Penny of Your Software Budget

IT managers, chief digital officers (CDO) and software licensing managers bear responsibility for multi-layered IT architectures and software landscapes that are no longer just about high availability and efficient maintenance.

Instead, the evolution of the role of IT in the company going forward is coming increasingly into focus. From infrastructure to the integration of various software applications – so many aspects are intertwined that cost optimisation is as crucial as it is difficult.

To create some wiggle room for new action, you should, therefore, not only spend your budget but also optimise the cost structures themselves. This is because you should never give away or waste a penny of your software budget.

The Last Quarter Is Ideal for a Budget Review, Planning and a Review of Licence Inventory

Many controllers will punish you if you are too thrifty. Cost savings in one year lead to lower budgets the next year. Once the last quarter has begun, licence managers should urgently check their licence inventories to ensure that they do not waste any remaining budget funds and spend them really wisely. After all, software licences that are not needed or are far too expensive ultimately mean that you are wasting money.

When looking at the company’s licence inventory, there are many issues that can lead to noticeable optimisations such as:

• Do we have all the licences we need?
• Are their licences in our inventory that are no longer supported by the software manufacturer (e.g. Office 2007, Exchange, Visio)?
• Would our licence inventory pass an audit?
• Could we replace upcoming acquisitions of new software with used software licences?
• Are we over-licensed? Are there licences we should sell?

Our Recommendation: Incorporate Used Software Licences Strategically

If the review reveals under-licensing, it is often best to invest the remaining budget in used software. While they offer the same functions and features, used software is up to 50% cheaper than new software.

In addition, the purchase of used software does not incur any ongoing monthly usage fees. This will result in savings for next year as well.

Boost Your Budget by Selling Redundant Licences – Pay Attention to These Four Requirements

Cutting back on purchases is one way to optimise the IT budget. Another way is to turn your previous purchases back into cash. This does not only apply to hardware such as notebooks or department printers, but also standard software. All you have to do is pay attention to these four basic requirements:

1. The redundant licences were first placed on the market in the EU or EEA
   In the EU, the principle of exhaustion applies to used software. This means that goods placed on the market in the EU or EEA with the consent of the rights holder can subsequently be traded freely in this region. The manufacturer’s distribution rights have been “exhausted” after the initial sale and the resale of the software is, therefore, legal.
2. Only purchased software can be transferred
   This means that you cannot resell software from ongoing leasing or subscription contracts.
3. Licences from volume contracts can also be partially sold
   There has been legal clarification on this matter too. The licences in a volume contract are each regarded as individual usage rights that can be transferred independently. You can, therefore, retain some licences and sell another. Client server installations are an exception to this rule.
4. Licences are made unusable before sale
   The seller may not, of course, continue to use the licences to be sold. The seller must uninstall the software from their computers before the sale and confirm that they will no longer use the licences.
   Unused software licences are a good option to boost your IT budget. Since 2005, we have been a reliable and experienced partner for our clients when it comes to selling their unused software licences. We will respond quickly with a good offer for your unused software.

Legal Certainty When Buying Used Software: The Great Advantage

Our used licences are not only cost-effective, but also audit-ready. Licences sold by PREO are taken through their paces in a rigorous due diligence process conducted by our legal department. As a result, they will pass every software audit. This is what our “Safe3 System” for audit readiness stands for.

A crucial point here is that PREO’s customers receive detailed information about the rights chain. In the case of transfers, this includes the documentation

1. of the type of contract from which the software originates (including contract numbers),
2. who the previous owners of the software were
3. and confirmation that they have properly uninstalled the software.

This also includes update history details. And if that is not enough security for you, our transfers are also insured against transfer errors. The insurance covers any financial losses up to 10 million euros.

Even in large companies, IT managers are increasingly relying on used software to use their software budgets effectively and ensure that not a penny is wasted.

Would You Like to Optimise Your Software Costs?

If you would like to find out how you could optimise your software costs, our licensing experts will be happy to help at no cost and without obligation.

Phone: +44 20 363 016 59