Actueel — Blog
Organisations often focus on negotiating the ‘best deal’ when buying licences. That makes sense. However, what I often see is that much less attention is paid to so-called ‘shelfware’. This can have much bigger financial consequences. In this article, I explain what the risks and causes of shelfware are, how to gain insight into them and how to structurally align costs with actual usage.
What is the risk of shelfware?
Shelfware are licences that are not, or not fully, used. Studies and analyses by Gartner and others show that organisations often purchase too many licences. This can cause considerable damage: on average, around 30% of purchased software and cloud resources are not used.
The five causes of over-licensing
As software and licensingexpert at PQR, we see five main causes of a mismatch between licences purchased and actually used with customers.
- Unused on the shelf
To start with, we see licences lying unused ‘on the shelf’. Organisations rent a certain number of licences, but they are not used until they are assigned to an individual user. Until then, they cost money, but deliver nothing. This occurs with all types of licensing contracts. The right choice of licence can sometimes mitigate this risk. For example, with Microsoft licences within an EA (Enterprise Agreement), you are stuck with the numbers within your contract for a year. With monthly licences purchased through a CSP (Cloud Solution Provider), you can adjust numbers as needed. With a good mix of annual and slightly more expensive monthly licences, you can maintain minimal inventory and still have all the flexibility you need. - Granted but not used
A second cause of unnecessary costs is seen, for example, in Microsoft application subscriptions. This is a broad portfolio in which people sometimes get more licences than they actually use. Visio and Projects are well-known examples of applications where this regularly goes wrong. With our SAM tools, we can see when each individual licence was last used, so that you only pay for actual use. - Too heavy licences
Sometimes you can choose between apps running on the computer , or being used online. We regularly see that the expensive ‘offline’ bundles are purchased, while users only work with web apps . We can also quickly identify this form of over-licensing. - Overpriced licences
Finally, sometimes unnecessarily expensive licences are purchased. From a (security) policy perspective, for example due to the upcoming NIS2 legislation, Microsoft 365 E5 is often chosen because of its advanced security and compliance capabilities. But if employees only use that licence for e-mail, it is better to opt for Exchange Online with Defender. This offers the same security, but is much cheaper. - Licences for ex-employees
The final cause of unnecessary costs is when people no longer work for the company but are still in the active directory. This leaves their licences active without being used. This means not only a cost, but also an unacceptable security risk.
Software Asset Management at PQR
PQR offers Software Asset Management expertise with smart services to suit your organisation’s needs. Our services include obtaining information on software implementation, maintenance, usage and optimisation. We do this in a way that is consistent and compliant with the use and goals of the organisation, while maximising the return on software investment.
SAM is more than compliance
Software Asset Management (SAM) is often deployed to meet manufacturer licensing requirements. But SAM can also help manage licences as cost-effectively as possible. As Gartner advises, “in the context of SaaS, SAM should shift from managing conventional licence compliance to measuring and managing consumption of delivered services and features. This can be done on a one-off basis, for example several months before entering into a new licence agreement. But it can also be deployed as a quarterly measurement to ensure continuous alignment between need, functionality and cost.
How PQR can help you
With the Microsoft 365 Healthcheck, PQR takes stock of which Microsoft 365 and Office 365licences are contracted and what your options are to optimise this. This is a concrete and quick way to discover unused licences and inactive users. And it pays off. In recent months, we have surveyed a number of customers ‘ Microsoft licences. With our advice, the customers were able to save 10 to 25% on their Microsoft licences alone. Want to know more or shelfware, want to optimise your Microsoft licences or have other software or licensing questions?
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