Scalable White Paper Series: Cost Control in in IT IT 2007, Scalable Software LLC 04.03
2 of Page 8 Who should read this paper? CCO s, CIO s, CFO s, FD s, Purchasing and Procurement professionals, Business Managers, Budget Holders, Asset Managers; anyone looking to close the funding gap between what you want to do and what you can afford to do. What you will gain You will understand where your organization is needlessly wasting money on software, hardware and printers - and how to reclaim it. Typically you can reclaim 20% of your annual software budget. What others have gained We showed Microsoft we were going to go with 800 fewer licenses and they cut us a deal by reducing the price on the licenses. We shaved $1.1 million in software without sacrificing productivity. Larry Griffith, Director, Telecoms and Networks, Covenant Healthcare The investment your organization has made and will continue to make in your software, hardware and printer portfolio is significant and vital. Few people would argue that every business today depends on the innovative optimal use of IT in order to remain competitive. At the same time, no company wants to create a blank check for the acquisition, support and maintenance of it all. Sometimes it can feel like this is exactly what you are doing. That s because you lack the information needed to make the business decisions on how to manage and reduce IT expenditures. If you are responsible for procurement, license renewal, true-up negotiations, budgeting or cost control do any of these scenarios seem familiar to you? Your company is forced to pay for unused licenses by vendors who simply count installations rather than work with you on fair value pricing based on what s actually being used. Your enterprise has a license agreement with a software company to install a specific number of software seats in your organization. You have no idea how many copies have been installed, or who is using them. You don t know if you are in compliance with the agreement or how much value you are getting from the agreement. A department asks that every employee on its roster receive a certain software package. You sense that not everyone needs the software, but you buy it anyhow because there is no way to prove who uses it and who doesn t. A software vendor has notified you that your company is being audited for the use of its software. You can inventory your PCs to see where the software is installed, but you don t know which under-utilized copies can be uninstalled in order to reduce your software license burden. You continuously buy copies of software that individual s request. No one ever turns software back in and states that it can now be redeployed elsewhere. You suspect that as people change jobs, leave the company or get promoted; their software simply goes unused while you continue to buy more copies. You have asked your Asset Managers to address some of these issues but they tell you that with the current tools in place this is nearly impossible. If you see yourself in one or more of these scenarios, you aren t alone read on.
Overspending highlights US Businesses typically over buy licenses by 60% and are non-compliant on another 30%. For typical office suites average overspend is $369 per machine. Every business manager who has ever had budgeting or purchasing responsibility for IT hardware and software has sensed that he was overspending. And for good reason - the majority of businesses ARE overspending. 1 Businesses vastly over-spend on software Working directly with enterprise organizations to assess their IT environments, Scalable Software has ascertained that U.S. businesses over-buy licenses for 60% of their software portfolios and are non-compliant on another 30% of their software assets. These companies massively over-spend on desktop applications. Our studies have shown that, on average: 82% of the PCs that have Microsoft Office Professional installed don t need all of the applications of this expensive high-end suite. 84% of the PCs that have the full Microsoft Visio package installed use it in read-only mode or not at all and could suffice with a free document viewer. 90% of the PCs that have Microsoft Project installed don t need it at all. 92% of the PCs that have the full package of Adobe Acrobat don t need it at all and could suffice with a free document viewer. Just for the software applications listed above, the average overspend on a per machine basis is $369. Would you like to get this kind of information for your IT environment? Would you like to know precisely where you are wasting money on buying too many software licenses? Scalable Software can help you uncover the hidden information that can reduce your IT budget by 20 to 40 percent in the first year alone. Asset Management tools don t address this problem Your IT department might tell you that the information you need in order to find real savings can be derived by analyzing data from your company s IT Asset Management (ITAM) tools. IT professionals use ITAM software to efficiently distribute, configure and control software applications and hardware devices. Such tools typically include a robust set of services to assist in the day-to-day operations of a networked computing environment, including remote desktop support; software deployment/retirement; patch management; inventory information (tracking); and physical location (monitoring). These activities are essential to keeping your IT environment operating efficiently. 1 Data is based on 130+ real-world customer assessments conducted by Scalable Software LLC
Why is Asset Intelligence important? As with anything complex, you can only make rational decisions about something once you understand it. In the case of software you have invested heavily in licenses to support your business you need to understand how they are being used to assess when to buy more, when to redeploy and what to renegotiate. Asset Intelligence gives you this insight. Among the most common IT Asset Management tools are Microsoft Systems Management Server (SMS), Altiris Service & Asset Management Suite, and IBM s Maximo Asset Management. These and many other ITAM products are great tools to help you manage the daily operation of your IT environment, e.g. deployment of operating systems, applications and patches. Such tools can also provide basic data about what hardware exists and the software applications that may be installed and in use within your IT environment. However, software usage is mostly obtained based on the most general information available: the open/close status of an application, which often comes from the Windows Add/Remove Programs registry. This registry is merely an indication of how many times an application is opened or closed. It is not a measure of the true usage of the product, including how the product is used, how often, and for how long. The screenshot below shows how Windows and many Asset Management tools report usage; For example, a PC user could automatically start an application every single day, simply because that application is in his computer start-up routine or because a received email attachment caused an application to start. The user could minimize or even close the application without even using it to do any work. An ITAM tool would say that product is used daily, based on the fact that it is opened daily. Scalable Software s solution would accurately tell you that the product is installed and not used for any work, and that the license could be uninstalled, redeployed or replaced with a viewer. Conversely, an ITAM tool can mistakenly tell you that a software application is rarely used when in fact the application is used every day for critical work. For example, take the end user who is sent an updated project plan once a week. He uses Microsoft Project to update some detail and returns the plan, but because it is rarely opened or closed, the Asset Management tool thinks the software isn t used much. Again, the Scalable solution would reveal that this user needs the Project license to input critical information. For the example above, a user who has never used Microsoft Project and a user that uses it once a week for critical tasks would be reported in exactly the same way. Get the precise information you need to make informed business decisions There is an accurate way to get the information that allows you to make factbased business decisions about your IT assets and spending. Survey from Scalable Software is a cost management application that provides detailed, comprehensive true usage information for the desktop software, hardware and printers in your organization.
8 Are these benefits proven in real environments? With over 200 customers and approaching a million PC desktops under management, customer case studies highlight the experiences of many organizations. Just with the software licenses alone, Survey has already shaved $250,000 off our bill. Country Energy Survey utilizes totally unique, class-leading usage tracking technology that detects and analyzes user keystrokes and mouse movements to ascertain actual user interaction with an application, versus the simple application open/close detection capabilities used by ITAM products. What s more, Survey has the ability to determine the difference between a reader and a writer application based on actual usage, which addresses the question Could the expensive full application license be replaced by a free read only version of the software? A key question therefore would be: Does a user open Microsoft Project every day and simply read an updated project plan, or actually use Microsoft Project to edit or create new content? The difference has very big implications for licensing and budgets knowing the difference is Asset Intelligence. Unlike ITAM tools that configure and manage PCs and software, Survey s Asset Intelligence gives you a business view of the computer systems and software you have installed. The Asset Intelligence reports give you the insight you need to: Stop overbuying software licenses. Remove the cost burden of maintaining and supporting under-utilized software and hardware. Gain fair value from annual software license reviews and true-up negotiations. Reallocate unused or under-utilized software instead of buying additional licenses. Replace full versions of software titles with read-only versions for workers with a read-only requirement. Achieve accurate compliance with vendor licensing. Accurately plan your IT budget for the next year and forecast future budget needs. Understand new application take up and hence the value contributed. How Survey works Survey is a thin client application, which uses a small footprint, non-intrusive agent on your client PCs to determine true application usage, based upon a degree of keystrokes and mouse movements. This data is sent back to a central server on a daily basis, where it is aggregated and analyzed to produce easy-tounderstand management reports. The unique features of Survey are: Its ability to recognize precisely which applications are used, how they are used, for how long and by whom. Its focus on business users -- on producing usable reports easily interpreted by a non-technical audience. Installing Survey and running a quick analysis can show you some quick hit opportunities to reduce costs. Survey really shines when it is used over a longer period of time. The more usage data you collect over time, the more the patterns emerge about how your company uses various hardware and software assets. This analysis allows you to optimize your procurement practices and your IT policies in order to sustain the maximum return on your IT investments. Survey is not a replacement for your Asset Management tools; rather, it is complementary. Your ITAM tools are necessary to control the technical aspects
Enterprise products mean lengthy installation and learning curves, right? Wrong - Survey has been designed to install easily and offer a very short learning curve to users. Normally, enterprise products require external consultants for a period of six to eight months. This was not the case for Survey - in less than 2 days all 2,000 agents were installed. Survey delivered on a quick deployment promise - one key requirement in the buying process. Municipal Utility District of your IT environment. Survey is necessary to control the financial aspects. What s more, the product is used by different people to achieve different results. IT professionals need their Asset Management tools to optimize performance from the IT assets, while financial experts need Survey to optimize the investment in information technology. How to use Survey s business intelligence to reduce costs and save money The detailed usage intelligence that Survey provides can be used throughout the ownership cycle to drive your financial strategies. Below are examples of the key areas where our customers rely on Survey s data. Replace full software products with read-only versions: Many companies pay for full version licenses of software packages for all users, even when a free or much less expensive viewer version of the product will meet most users needs. This unnecessary purchase leads to excess expenditures on software licenses, annual maintenance contracts and product training. Survey reveals precisely who in your organization has the full package installed, and which employees are good candidates for a view-only product instead. Verify existing inventory before you make a new purchase: Employees request new hardware and software from time to time. Without detailed information about what assets already exist in your company and how they are used, it s difficult to assess whether or not the new purchase is necessary. You could be wasting hundreds of thousands of dollars or more purchasing new hardware and software when those same items are already sitting idle in your inventory. Survey reports help you identify unused assets which can be redeployed, thus avoiding unnecessary new expenditure. Take control when negotiating software licenses: Large software companies like Microsoft and Oracle have the advantage when you are negotiating annual license fees for their software. Typically, they tell you how much you need to pay. That is, unless you can prove definitively how many instances of their software your company actually uses. Only Survey gives you this specific information to prepare for software audits and counter the claims of the software vendors. Survey shifts the advantage to your side. Survey
8 The benefits sound great but where do I start? Asset Intelligence need not be a big bang approach. Typically our customers do not address everything at once; they use Asset Intelligence to bring benefits and budget savings as opportunities arise. customers achieve substantial savings when it comes time to true-up or true-down the licenses on their desktop applications as well as ERP, CRM and other enterprise software licenses. The License Usage Analysis Report below shows licenses that should be paid for (green), licenses that should not be deployed (red) and licenses that could be replaced with read-only viewers or removed (yellow). Asset Management products get you somewhere into the red; Survey gets you well into the yellow. What s more, drill-down information behind this report tells you which computers harbor the rarely used or unused applications so that you can take action. With Scalable we were able to identify over 750 machines in our environment that... saved nearly $1 million dollars based on just one report. The U.S. Army It only took 20 minutes for us to install Survey across all 1000 desktops in our Enterprise. Our organization was running reports within the hour. Healthcare Information Systems Provider Ensure compliance with vendor licensing: Most companies don t intentionally install more copies of a software application than their license allows. Sometimes it just happens, and this situation can put your business at risk of a lawsuit or fine for non-compliance of license terms. Survey keeps you in compliance by showing precise data about the software in use. See when you need to purchase additional licenses, or learn where you can uninstall software to recover unused licenses. Buy a short-term software license until you are sure of what you need: Before entering into a long-term agreement to purchase a large number of software licenses, purchase a short-term license. Using Survey, you can determine which employees really use the software and which ones don t need it at all. When you enter into the long-term agreement, purchase only what you actually need and remain compliant. Reallocate or retire printers for more effective operations: Survey collects and analyzes usage information about both network and locally attached printers. You can quickly identify printers that are underutilized so they can be redeployed elsewhere or retired from use completely. Stop paying for service, maintenance and supplies for printers that are barely used. Plan your IT budget more accurately: New business applications often dictate the need for new software on the desktop. For example, a new financial application can require the installation of Oracle Financials software on each user s PC. Your Survey reports can help you pin point the exact number of
Five steps to recovering budget 1. Conduct a free assessment Scalable Software will perform a free assessment of your environment. We ll work with you to install our Survey software on a representative sample or your IT estate and after 30 days our detailed reports will show you your specific areas of savings. This assessment is risk-free and allows you discern the potential returns from a full deployment of Survey in your organization. 2. Deploy Survey in the organization Once that you have seen how the Asset Intelligence data can free up budget, install Survey to monitor your entire organization. Collect usage data for at least 90 days for meaningful asset intelligence data. 3. Reallocate and retire licenses Your Survey reports tell you where you have assets deployed that are underutilized or completely unused. Take measures to consolidate or reassign the underutilized assets, and decommission the ones that are not used at all. This will help you save money on maintenance and on software you now don t have to buy. 4. Implement purchasing policies Once you understand the true usage of hardware and software in your enterprise, establish new procurement guidelines and policies that more tightly control new purchases. New licenses should only be acquired after a report has been run showing full allocation of all owned licenses and license renewals should be renegotiated around what you actually use. licenses you need so that you can budget more accurately for the application rollout. Control the cost of system refreshes: The typical IT department plans for routine hardware and software upgrades and full-system replacements whether they are needed or not. Upgrading or replacing assets that still have life is a waste of time and money. Your Survey reports help you identify which software or systems are prime candidates for a refresh, and which ones can stay in place or be cascaded down to other users. And, you can readily see which employees need a $2,500 PC, and which ones can just as easily use a $1,200 PC. This helps you plan and control your budget and maximize the life of your IT assets. Pay for what you use: Many large organizations standardize on a small set of software images, or sets of software applications, to be installed on all desktop computers. Which image a person gets usually depends on his role in the organization, and not on what he actually needs to use. The insight from Survey can help you negotiate with publishers so you are paying for software being used instead of everywhere it is installed. Understand the IT overlaps and gaps that result from a merger or acquisition: Today s business climate dictates that companies come together via mergers or acquisitions. This means that two disparate IT departments must become one. The lead IT group can use Survey to inventory the assets of the acquired company and bring those assets under established management practices. For example, the Survey reports can show which computers need to come into compliance with corporate software image standards. Scalable Software s customers have found many unique ways to use the insight from Survey reports to reduce and control IT costs. Many customers have been able to reduce their IT budgets in the range of 20 percent to 40 percent in the first year alone. The savings continue into subsequent years of usage when best practices are implemented to make decisions about hardware and software allocations and purchases. Get started with your savings program Survey from Scalable Software uncovers hidden information that you can use to improve your IT spending posture without compromising quality or productivity. If you suspect that your company is overspending on IT hardware and software, you need to contact Scalable Software. Together we will use Survey to assess your IT environment and determine where you can recoup or save money and how you can better manage your IT assets for the long term. This proof of concept trial assessment is free, and it could help you recover a very significant portion of your IT budget. Contact us to get started today. 5. Track your savings Track your cost reduction and savings over the months and years. Seeing where your savings are the greatest will help you fine-tune your organizational best practices. North America 2929 Allen Parkway Suite 1400 Houston, TX 77019, USA Tel: 1-713-316-4900 Toll free: 1-866-722-5225 Fax: 1-713-316-4985 sales@scalable.com EMEA Suite 10, Cedar Court Grove Park White Waltham Maidenhead, SL6 3LW, UK Tel: +44 (0)203 070 9167 Fax: +44 (0)207 117 2675 emeasales@scalable.com