Flexera Software and IDC Research Survey Report: Software Budgets, Waste & Shifts in Software Licensing

Survey Background

The 2013-14 Key trends in Software Pricing and Licensing survey was conducted by Flexera Software with input from IDC’s Software Pricing and Licensing Research division under the direction of Amy Konary, research vice president - software licensing and provisioning at IDC. This annual research project looks at software licensing, pricing and enforcement trends and best practices. The survey reaches out to executives at application producers (Software vendors and intelligent device manufacturers) and enterprises who use and manage software and devices. Now in its ninth year, the survey is made available to the industry at large each year.

Methodology and Sampling

In total, 1,828 respondents participated in the survey, including 430 enterprise executives and 1398 application producer executives.

Enterprise Demographics

41% of the enterprise respondents were from larger enterprises of $1 billion or more in revenues and 14% were from companies with $3 billion in revenues or more. Among other places, 56% of respondents were from North America, 28% were from Europe, and 7% were from Australia.

Application Producer Demographics

The largest segment of application producer respondents (60%) come from companies with $10 million and under in revenues. 3% of the respondents were from companies with $1 billion or more in revenues. Among other places, 47% of respondents are from North America, 23% from Europe, and 13% from Australia.


Enterprise software counts among an organization’s most strategic assets. Therefore it is not surprising that software comprises one of the largest line-items in most organizations’ IT budgets. As enterprises rebound from the “great recession,” they continue to look for ways to be agile, lean and efficient. In furtherance of those goals, software budgets are being examined closely, with an eye towards ferreting out waste, and ensuring acceptable ROI. As confirmed in this Report, organizations are evolving in their quest to derive more value from their software spend. And as application producers accommodate this trend, they are realizing greater value as well.

Enterprises Facing Constricted Software Spend

Software spend within the enterprise is in constriction mode. The pressure on spend is coming from both external and internal forces.

Externally, almost two-thirds of enterprises say their software budgets are either levelling off or shrinking over the next two years. Among respondents familiar with their organization’s software budgeting plans, 40% say budgets will stay the same, and 23% say their budgets will decrease over the next 18 to 24 months. Only 37% report their budgets will increase.

At the same time that these financial dynamics are placing limitations on software spend, enterprises are also reporting that they are uncovering substantial pools of waste in the form of software that is not even being used – “shelfware.” Among respondents familiar with their organization’s software spend, 96% report that at least some of their budget is associated with “shelfware. 39% of those respondents report that 21% or more of their software spend is associated with shelfware; 30% say that 11-20% of their software spend is associated with shelfware.

Based on our prior Software Pricing & Licensing report on software audits and true-ups, we also know that corporate IT resources are also being assaulted by software overuse – non-compliant software use leading to software license audit true up costs. In that survey we revealed that 85% of organizations reported they are out of compliance with their software license agreements, 63% were audited by their software vendors in the last 18-24 months, and 56% were handed true-up bills (21% for a million dollars or more).

Enterprise software counts among an organization’s most strategic resources (it runs every facet of the business). And new software demands are being placed upon the enterprise in terms of environments (i.e. on premises, virtualized, cloud, mobile). Yet, the situation on the ground as reported by survey respondents is that enterprises are facing significant resource constraints due to budget pressure and waste.