Optimize your software licensing while moving to the cloud

plane-to-clouds

I’ve been talking to several clients who are on a journey to the cloud and at various stages of adopting Software as a Service (SaaS). They are concerned about having to manage complex and hybrid IT environments.

Procurement and IT managers tell me they are worried about working with multiple software vendors. Acquiring licenses or subscriptions is different for each vendor and they worry that any non-compliance might lead to greater complexity, costs and risks for their company.

The stakes are high. Software is either the first or second largest cost in the IT budget, and software support accounts for between 50 percent and 60 percent of that cost.1 And by 2021, more than 70 percent of businesses will be substantially provisioned with cloud office capabilities.2

There are two key areas that enable a successful cloud adoption. The first area is managing the complexity of procurement while dealing with hybrid software models, and the second area is accurate asset management. On the procurement side, consolidating software suppliers and contracts can help you to maximize purchasing power. Negotiating better pricing and terms can mean significant savings.

The Software Asset Management process allows you to gain visibility into your software license portfolio. This portfolio can be challenging in today’s world of bring your own device (BYOD) and millennials buying software outside of defined channels. Companies must improve their control and governance. Well-managed and compliant licensing is a key route to reducing and avoiding cost overruns. And wherever possible, try to centralize IT spending to ensure the greatest economic leverage and cut redundant purchases.

Gartner clients that improve their software asset management (SAM) license optimization capabilities typically report up to 30 percent software spending reductions within 1 year.3

My suggestion is to look for licensing advice and guidance when selecting your software reseller. Try to find a vendor who provides impartial advice on complex software licensing contracts and solutions; someone who can help you apply best practices.

One of our clients, for example, recently reported back to us that thanks to our advice and support in negotiations with one of their software vendors, they saved 50 percent  in cloud service subscription costs.

Another client reported that thanks to our joint efforts, they managed to recover and re-assign unused licenses resulting in a substantial saving.

How to learn more about this topic

In the coming weeks, we will be posting a series of four additional blogs on this topic. They will cover topics like:

  • Licensing Microsoft cloud products,
  • Ways to optimize your SAM approach,
  • Selecting a reselling partner,
  • How hosting service providers can offer solutions to their clients

Analyst sources

1Gartner. Reduce Your Software Maintenance and Support Costs by Up to 50% by Deploying These Often-Overlooked but Effective Best Practices, May 4, 2017

2Gartner, Smarter with Gartner. Widespread Adoption of Cloud Office Is Now Well Underway, June 28, 2017

3Gartner. Research Roundup for SAM Tool Research for Enterprises, January 27, 2017


Yogi Sikri is Software Licensing and Management Solutions’ Offering Manager at DXC.

Trackbacks

  1. […] trends showing vendors continuing to move from perpetual to subscription-based licensing and from simple to more complex licensing models (with cloud and on-premises options for good measure). Against this backdrop, we have seen a steady […]

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  2. […] should engage your reseller to review all options available to you.  Your reseller can help you optimize your environment to the fullest and also build your environment in a way that protects you in case of a Microsoft […]

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  3. […] this blog series, we have already covered several licensing topics related to optimizing your licensing as you move to cloud,  licensing Microsoft cloud products, ways to optimize your software asset management (SAM) […]

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