Date:
16 Oct 2024
Author:
PREO AG
Licence Management
Successfully Managing Cost Development, Security, and Compliance
With the growing number of software offerings and their availability, the options for licensing and their complexity are also increasing. The result: opaque licence structures and rising business risks in terms of cost development, vendor audits, data security, and software compliance. Even for medium-sized companies, keeping track of the current inventory is often a challenge. This ranges from standard programs for individual work or production areas, to operating systems and complex server and database structures, up to new AI applications. Without proper Software Asset Management (SAM) tools, it is almost impossible for IT managers or software asset managers to ensure a comprehensive inventory, continuous updates, and regular analysis of the existing and used software assets. Only a transparent licence inventory can be managed in a legally secure and compliant manner, allowing for active management to identify issues early and take effective corrective action if needed.
In addition to using SAM tools tailored to the company’s licensing needs, it is advisable to implement structured approaches and processes within the company to maintain an overview of both existing on-premise licences and the wide range of cloud solutions and licences. In this blog post, we take a closer look at these aspects.
Greater Licence Transparency Through the Implementation of a SAM System
Efficient Software Asset Management (SAM) is nearly impossible without the support of a SAM system tailored to the company's needs, in order to centrally capture, manage, monitor, and optimize all information related to software licences. Key functions of such a system include:
- Recording and managing the entire licence inventory from both on-premise and cloud software.
- Automated updates and alerts when support expires or compliance risks arise.
- Continuous monitoring and analysis of software usage to determine whether licences are actually being utilized in day-to-day business operations. Identified unused or idle licences can potentially be redeployed elsewhere in the company, rather than licensing new software. In the case of purchased on-premise licences, these can also be sold to an established and reputable pre-owned software dealer. The revenue generated can then, for example, relieve the ongoing IT budget or be reinvested into new digital projects.
PREO Tip: How to Find the Right Partner for Pre-owned Software Licences
The checklist created by PREO's licence experts and available for free download helps companies find a reputable provider for buying or selling pre-owned software licences.
Greater Licence Transparency Through Internal Audits and Usage Reviews
To ensure that existing software licences are fully recorded, documented, and compliant with current legal requirements, not only companies with complex licence structures from on-premise and cloud software for operating systems, applications, and servers conduct regular internal so-called "friendly" audits. These audits help identify potential over- or under-licensing early, allowing for adjustments as needed, so that unforeseen vendor audits become less daunting and do not unnecessarily stress the IT department. Additional benefits include unrestricted and complete licence transparency, which prevents undiscovered phenomena like cloud sprawl and shadow clouds, while also opening the door to alternative licensing models. This includes the use of pre-owned software licences, particularly for widely used standard software from Microsoft or Adobe, which can offer significant savings on ongoing licensing costs of up to 70% compared to their new versions.
Greater Licence Transparency Through the Prevention of Cloud Sprawl and Shadow IT
The greater a company’s need for current and quickly available software solutions, the more susceptible it is to a common and often unrecognised problem: cloud sprawl. This is hardly surprising, as the number of cloud or SaaS providers with their diverse offerings and services is overwhelming. When different departments or teams subscribe to and use these services independently, it inevitably leads to opaque licence structures and uncontrollable costs, compliance, and security risks.
Effective countermeasures include:
- Centralised management of software licences, even within decentralised organisational structures.
- Strict policies and approval processes.
- Systematic monitoring of cloud usage.
Additionally, IT managers or Software Asset Managers can adopt FinOps (Financial Operations) as a methodological approach for efficient cloud cost management. You can read more about FinOps here.
Intransparency on multiple levels also characterises another phenomenon: the uncontrolled spread and use of cloud software, such as on personal cloud accounts of employees or departmental accounts. Typically, the internal IT department is unaware of this existing shadow IT. This situation leads to violations of licensing, security, and compliance regulations, as established rules and processes are often disregarded out of ignorance or carelessness.
IT managers can address these issues, particularly with the following measures:
- Implementation of transparent and efficient procurement processes.
- Network monitoring to locate unapproved software, which can then be either licensed or uninstalled and replaced with secure alternatives.
- Raising awareness among all managers and employees within the organisation through clear internal policies and targeted information on how software licences are managed and the financial and legal consequences that cloud sprawl and shadow clouds can have on the company— for example, through training and self-learning programmes.
Greater Transparency and Lower Licence Costs Through Pre-owned Software
To reduce the risks associated with opaque licence structures due to the uncontrolled use of cloud and SaaS solutions, more and more companies are adopting a hybrid software architecture that flexibly combines cloud and on-premise software according to their needs. In such a scenario with various licensing models, both security and compliance risks, as well as ongoing licence costs, can be significantly reduced through the use of pre-owned software, as demonstrated by the following example from LMT Group:
The globally operating specialist machine manufacturer employs around 2,300 staff across 20 locations. After a comprehensive software asset review, the IT department developed a hybrid software landscape for over 2,000 workstations. By integrating pre-owned software, they were able to save nearly 1 million euros. You can find the complete customer case here.
With PREO, you are choosing an experienced and reputable B2B provider.
PREO offers companies, organizations, and public administrations a wide selection of pre-owned volume licences for both current and older versions of standard software from leading manufacturers, such as Microsoft and Adobe, at any time. Regardless of the need for pre-owned software, PREO provides both medium-sized and large enterprises with numerous advantages:
- Significant savings on ongoing licence costs of up to 70% compared to the respective new version.
- 100% legally and audit-secure licence acquisition with the highest transparency in all transaction steps, including complete documentation in the PREO licence portal "Easy Compliance."
- Personalised advice on all questions related to licence transactions or the integration of pre-owned software licences into traditional network structures or hybrid cloud models.
- Existing capacity for software licence management in large IT infrastructure projects with thousands of workstations and cross-border locations.
- Enhanced sustainability in IT by promoting an active circular economy and reducing the corporate carbon footprint. Speaking of sustainability, PREO is the only used software dealer listed with a current scorecard from EcoVadis, the world's largest provider of sustainability ratings.
- Expertise from numerous reference projects that PREO has successfully implemented for well-known companies across various industries and sectors.
