Software licensing costs represent one of the largest line items in many organizations’ IT budgets. However, research shows that 30-40% of software licenses purchased by companies are unused or underutilized. License optimization eliminates this waste and delivers significant cost savings.
Software Licensing Models
| Model | Description | Best For |
|---|---|---|
| Per User | Separate license for each user | Fixed user count |
| Concurrent User | Based on simultaneous users | Shift-based work |
| SaaS Subscription | Monthly/annual payments | Flexible needs |
| Usage-Based | Based on consumption volume | Variable workloads |
| Enterprise Agreement | Single agreement for the entire organization | Large enterprises |
Optimization Steps
Step 1: Software Inventory
Identify all software, versions, and license types across your organization. Automated discovery tools provide tremendous help in this process. Uncover unknown software within shadow IT as well.
Step 2: Usage Analysis
Collect actual usage data for each piece of software. Classify software as unused, rarely used, and heavily used. This analysis clearly reveals optimization opportunities.
Step 3: License Compliance Check
Verify whether current usage complies with license terms. Identify cases of overspending and under-licensing (compliance risk).
Step 4: Consolidation
Consolidate multiple software products with similar functions into a single solution. For example, use a single platform instead of multiple project management tools, or a centralized system instead of separate CRM solutions across departments.
SaaS Rationalization
The number of SaaS tools is growing rapidly. The average company uses more than 100 SaaS applications. Through SaaS rationalization, consolidate overlapping functions, cancel unused subscriptions, and negotiate volume agreements to reduce unit costs.
Savings Through Consolidation
Comprehensive ERP solutions like PratikEsnaf.Net combine multiple functions such as accounting, inventory, sales, and customer management on a single platform, eliminating the need for separate software licenses. Similarly, E-Fatura.Net integration eliminates the need for a separate invoicing application.
License Management Best Practices
- Establish a central license management team or designated owner
- Maintain a renewal calendar and conduct usage analysis before each renewal
- Leverage usage data as your strongest card in vendor negotiations
- Evaluate open-source alternatives: not every commercial software has one, but many do
- Conduct regular audits: perform a comprehensive license audit at least once a year
- Plan an exit strategy: assess portability to reduce vendor lock-in risk
Conclusion
License optimization is a low-risk initiative that delivers quick, tangible savings in the IT budget. At TAGUM, we analyze organizations’ software portfolios and recommend cost-effective solutions.
