Tackling the High Cost of Unused Software

Somewhere along the “Yellow Brick Road” of good intentions and the real world of operating a business lies a foggy forest of enterprise software. At the outset, every application and software tool represents an opportunity to run a business faster, better and cheaper.

But a new report from UK-based software and services firm 1E, “The Hidden Cost of Unused Software,” indicates that many organizations are purchasing and deploying software that goes unused. It found that organizations in the United Kingdom and the United States have paid more than $7 billion for excess or unneeded software. This amounts to somewhere in the vicinity of $224 per desktop in the U.S and $266 in the U.K.

Overall, about 28 percent of all enterprise software across 1.8 million desktops went unused over the previous 90 days, and 6 percent was rarely or never used during the past 30 days. 1E examined software practices at 74 firms in 13 industry sectors.

While the health care sector boasted the lowest level of unused software at 20 percent, the pharmaceutical industry topped the list at 56 percent. Moreover, the problem is worse among midsize companies. Organizations with approximately 5,000 users posted a 43 percent non-use rate versus 34 percent at those with 100,000 or more users.

It doesn’t take a spreadsheet or analytics software to understand that organizations are frittering away a boatload of money—and wasting additional resources supporting all those licenses and applications. What’s more, the task isn’t getting any easier with the growing use of clouds and mobile apps.

The upshot? CIOs must do a much better job of deploying asset management and software tracking systems that identify deployments and users across the enterprise. Although some organizations use advanced tools and automated approaches, the report notes that most firms simply aren’t keeping up with changes in the overall computing environment, as well as tracking tools and solutions.

Making matters worse, many organizations now purchase additional licenses rather than risk fines and other headaches from increasingly aggressive and audit-happy software vendors. However, many of those licenses go unused.

Remarkably, the 1E report found that the number of unused software applications and licenses is on the rise and the problem is getting worse. In some cases, “Organizations are shelling out millions of dollars unnecessarily,” notes 1E CEO Sumir Karayi.


Samuel Greengard
Samuel Greengard
Samuel Greengard writes about business, technology and other topics. His book, The Internet of Things (MIT Press) was released in the spring of 2015.

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