Software

Understanding software licensing for somebody within the IT industry can be problematic but for someone who doesn’t have any background in this field, it can be a minefield.

Time and time again we come across situations where businesses are paying for licences they are not actually using or too much as they don’t require the functionality their licences provide. This is most often due to a lack of in-house knowledge or not having the processes in place to highlight these issues, resulting in wasted money.

In this blog, I hope to shed a little light on this problem, so you will come away with some understanding of the steps you need to take to ensure your business is getting value for money and the functionality to support its requirements.

The Basics of Software Licensing

Software licensing is a legal agreement between the software vendor and the user, detailing how the software can be used and distributed. Licences vary widely in terms of cost, usage rights, and restrictions. Here are some common types of software licences:

1. Perpetual Licences: A one-time purchase that allows you to use the software indefinitely.
2. Subscription Licences: A recurring fee (monthly or annually) that grants access to the software for the duration of the subscription.
3. Concurrent Licences: Allows a certain number of users to access the software simultaneously.
4. User-Based Licences: Each user requires a separate licence, regardless of how many devices they use.

Factors Influencing Software Licence Costs

Several factors influence the cost of software licences, including:

1. Functionality: More feature-rich software typically costs more. Advanced functionalities, such as data analytics, collaboration tools, and security features, add to the price.
2. User Count: The number of users or devices that need access to the software will affect the total cost. User-based licences are usually more expensive if many users require access.
3. Deployment Model: Cloud-based software often follows a subscription model, while on-premises software might be a one-time purchase with optional maintenance fees.
4. Support and Maintenance: Costs can include customer support, software updates, and maintenance services.
5. Customisation and Integration: Custom features or integrations with other systems can significantly increase costs.

Maximising the Value of Your Software Licences

To ensure you’re getting the most out of your software investments, consider the following strategies:

1. Conduct a Needs Assessment: Identify the specific needs of your business and choose software that aligns with those requirements. Avoid paying for features you don’t need.
2. Evaluate Usage: Regularly review how software is used within your organisation. Are there licences that are underutilised? Can some users share a licence?
3. Alternative Vendors: Don’t be afraid to seek alternative quotes. There are deals to be had and additional benefits such as training and support.
4. Stay Informed on Licence Changes: Vendors often update their licensing models. Stay informed about these changes to avoid unexpected costs and ensure compliance.
5. Track Usage: Ensure you have an up-to-date user list, so you are only paying for licences you are using. Add a monthly process to cross-check against your subscription and incorporate this into your starter/leaver process.

The Hidden Costs of Software Licences

While the upfront cost of a software licence is clear, hidden costs can add up over time:

1. Overpaying: Not all vendors charge the same, a common misconception.
2. Un-used licences: It’s your responsibility to know if a licence you are paying for is being used and to notify the vendor if it isn’t.
3. Training: Ensuring that your team can effectively use the software may require training, which can be costly. Look for a Vendor that can help with this.
4. Compliance and Audits: Failing to comply with licensing agreements can result in fines and legal issues. Having a documented process in place will give you the peace of mind that you are compliant.

Conclusion

Understanding your software licence costs and the functionality they provide is essential for managing your business’s IT budget effectively.

Although it can seem to be very overwhelming if you don’t have a handle on this, with the correct processes in place it will become something that is very simple to maintain with the benefit of cost savings, month on month.

We have, on many occasions saved businesses and schools thousands of pounds, by working with them to map-out their usage and implementing simple processes. Whether you do this internally or seek help from a supplier in this field, the end goal is to maximise the value of your software investments and ensure they support your business goals.

If you need assistance with managing your software licences or conducting a needs assessment, our team is here to help. Contact us to learn more about how we can support your software management needs.