by Eric Feldman | @EricJFeldman
The Business Software Alliance (BSA) recently published the latest edition of their Global Software Survey. This survey, done in partnership with IDC, reports on the quantity and value of unlicensed software installed on PCs in a specific year.
This study had some interesting findings that we wanted to share with you. The report finds that 39% of software installed globally is not licensed, a reduction from 43% in BSA's previous report in 2013. This unlicensed software has a commercial value of over $52 billion. (Note that the data includes a combination of home and enterprise PC users, as well as a survey of 2200 IT managers).
The use of unlicensed software crosses all industries, even where technology is vital to business operations. Globally, 25% of the software used in the banking, insurance, and securities industries was unlicensed. What makes this number so surprising for these industries are the two things they have in common: 1) these industries are technology and software driven - they cannot exist without software, and 2) they are among the most highly regulated businesses.
Another report finding follows some recent software trends around security. An estimated 15% of employees install software on their company's network without authorization. This creates risk, not just from software audits, but also from security threats.
49% of CIOs identified security threats from malware as a major threat posed by unlicensed software. And there is a high correlation between unlicensed software and encountering malware (see Figure 1 below). There was a 35 percent growth in ransomware in 2015, with more than 1 million new threats created each day. And software vulnerabilities can be expensive, with the average cyberattack costing an organization $11 million. In aggregate, $400 billion was spent last year by organizations responding to cyberattacks, according to IDC estimates.
Figure 1: IDC data shows a strong correlation between unlicensed software rates and malware encounters
The BSA survey also went into the positive benefits of an effective software asset management (SAM) program. According to BSA, there is the potential for real cost savings of up to 25% per year that comes from by removing inefficiencies from over-licensing applications or having unused software. Also, many companies are embracing cloud computing, which enables organizations of any size to access technology quickly and efficiently. The challenge is to know what your cloud software entitlements and usage are, otherwise, you may expose yourself to additional cost and risk.
Research conducted by Flexera Software shows that there are many more opportunities for savings besides over-licensing applications and unused software, as mentioned in the BSA report. In a recent study by TechValidate, a neutral third party, customers of FlexNet Manager Suite for Enterprises were asked “After deploying FlexNet Manager Suite for Enterprises, how have you realized a return on investment?” Organizations were able to realize savings via:
- Reductions in software audit fees
- Reduced labor costs
- Software maintenance cost reductions
- Hardware cost reductions (for example, reduced property tax payments through more accurate hardware asset data)
- The ability to negotiate more favorable software contracts
So, what are some of the specific ways that a fully implemented SAM program can help achieve these benefits? For many enterprises, it comes from automated software asset management and license optimization solutions that understand complex license models and leverage vendor specific license entitlements to reduce license consumption and save software costs.
For example, if your organization is a customer of SAP, you may be challenged to select the optimal Named User license type for each SAP user. The right SAM solution will analyze usage patterns of SAP Named User licenses and point out savings when converting to another less expensive type.
Customers of Microsoft may not have the processes or tools to manage the product use rights that enable the installation of certain desktop products on two computers per license. And Office 365 Subscriptions enable the installation on 5 devices per user.
And it can be a challenge to keep track of IBM licensing. The IBM Processor Value Unit (PVU) license model provides for both full capacity and sub-capacity (virtual environment) licensing. While you can save money on IBM software running on virtualized machines - because you don't have to license all of the processor-cores in the server - management of all the rules is challenging. The right SAM solution will automatically calculate your PVU license consumption.
If you found the BSA Global Software Survey of value and want more information on how an effective SAM program can help your organization save money, Flexera Software has published an entire series of free white papers that provide vendor specific tips and general SAM best practices. These are a great start to begin your SAM journey:
- The Foundation of a Successful ITAM Program - In 5 Not So Easy Steps
- Maximize Software Cost Savings White Paper
- White Paper: Curing the SAP Overpayment Syndrome
- Gain Control of your IBM Software Licenses