SOFTWARE LICENSING

Software Licensing Feels the Blows of Federal Cutbacks

By Nicole Spector, Contributing Writer

In a country whose federal government is buried in mounting pressure to cut its spending, parties are arguing over what spending must be eliminated. In all the flurry, bi-partisans actually strongly concur on one thing: the way the U.S invests in software has got to be heavily managed. Apparently, we're wasting billions of dollars on poor software license management.

President Obama recently passed two pieces of legislation aimed at cutting software costs through implementation of software license optimization. They can be found in Section 937 of the National Defense Authorization Act for Fiscal Year 2013, and in Sections 304 and 305 of the Intelligence Authorization Act for Fiscal Year 2013.  

Section 937 of the National Defense Authorization Act ensures that one of the key investments of the Department of Defense – software – is managed responsibly, and completely utilized. Sections 304 and 305 of the Intelligence Authorization Act for this fiscal year, ban unnecessary and duplicative software licenses within the Intelligence Community – a move that benefits taxpayers. Both laws require their respective agencies to do a department-wide inventory assessment, examine their current license utilization rates, and assess how either department can achieve the best scale and cost savings in the procurement, use, and optimization of software licenses.

Jim Ryan, the chief operating officer of Flexera Software, a company that specializes in asset management and software license optimization solutions, says it’s not surprising that the famously feuding parties in Congress agreed to pinpoint software in its negotiations. “[It's] an opportunity for significant savings,” says Ryan. “There's a lot of hidden waste there, and no one gets hurt if you eliminate it.”

Ryan goes on to reason that most organizations – not just the government – “can save up to 25 percent or more of their software spend by implementing established software license management best practices and tools. The federal government spends about $9 billion annually on software – so savings could run into the billions.”