Rise in unused software - 'shelfware' - suggests companies are mismanaging their IT investments
Schaumburg, IL - Apr 4, 2013 - While corporations have been investing in efficiency-creating technologies, such as new software systems, a new Flexera Software Survey, prepared jointly with IDC, has found that a significant portion of that new tech investment is being wasted - and even mismanaged.
Lean Organizations Are Bloated with Unused Software
According to the survey, organizations are investing heavily in software right now. 44 percent of survey respondents indicated that their software budgets would increase over the next 18 to 24 months.
But the survey also reveals a big problem emerging within these growing IT budgets - unused software, or shelfware. 56 percent of respondents (up from 49 percent only a year ago) say that 11 percent or more of their software spend is associated with shelfware, up from 49 percent last year. According to IDC, the market for packaged software was about $325 billion in 2011,  suggesting that the global overspend on shelfware could be staggering.
"Corporations adjust quickly to economic realities, and in this economic downturn they've become expert in leveraging software to offset leaner staff," said Steve Schmidt, Vice President of Corporate Development at Flexera Software, developer of Software License Optimization solutions. "But they've developed a blind spot - investing heavily in efficiency-creating technologies like software without really understanding how to ensure this critical asset is being optimally used. Consequently, an unacceptable proportion of that expenditure is wasted."
Organizations Acknowledge Their Processes & Controls Are Lacking
The survey also reveals that companies know they are bloated with expensive shelfware - and that it is a problem. A third of all respondents indicated they are either dissatisfied or very dissatisfied with their current method for managing software licenses and usage (almost half of large companies over $1 billion in revenues reported dissatisfaction).
Moreover, respondents admitted that they do not have the systems in place to ensure optimized use of their software. For instance, due to the complexity of software licenses and tracking license usage, simply understanding the number of licenses purchased and used is insufficient. Product use rights (i.e. upgrade rights, downgrade rights, secondary use rights, etc.) contained in the software contract detail how software licenses can be used, by whom, in what circumstances and on what devices. Only by optimizing the software license estate - reconciling product use rights with how employees are actually using the software - can organizations hope to buy only what they need and use what they have. Whether enterprises take into account product use rights in the management of their licenses is critical to eliminating wasteful purchasing.
According to the survey, almost a third of respondents do not apply product-use rights to optimize their software use - resulting in significant shelfware problems.
"The lesson is clear. Leveraging high tech assets like software in order to drive efficiencies and cut costs is critical for any company," said Schmidt. "But software is a complex asset to maintain, and organizations have to be smart about it. If they're not up to the task of implementing the processes and technology to optimize their software use - they likely will be wasting much of the efficiency gains software enables by creating shelfware bloat."
 IDC Market Analysis: WorldwideSoftware 2012-2016 Forecast Summary, Patrick Melgarejo, June, 2012.
Click here to access the complete survey results.
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