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14 Eye-watering Statistics About Software Licensing
“There are only two qualities in the world -efficiency and inefficiency, and only two sorts of people: the efficient and the inefficient.” George Bernard Shaw
Software licensing is critical to your business. Why? Because in reality, without the revenue from software license fees, you're going to struggle to pay staff, keep the lights on or expand your business in any meaningful way.
As a company that supplies leading-edge software licensing solutions to some of the world's biggest and best consumer and technology brands, we’re constantly stating the case for efficiency. More specifically: modern 21st-century approaches to software licensing that move away from cumbersome software license keys.
What's the difference between effective and efficient? Effective software licensing is compliant. The number of software licenses issued is the same as the number of licenses deployed. Efficient software licensing means that the number of licenses issued matches business value - the number of licenses actual required AND being used by your customers.
One of the most common ways businesses waste money is by buying software that will never be used and a staggering amount of money every year disappears straight down the drain. But beware - it's not just your customers IT budgets that need a bit of spring cleaning. Some ISVs (particularly those that are using outdated license key solutions) are also missing out on essential revenues.
Here's our rundown of some of the software licensing industry's most interesting statistics.
- According to the latest forecast by Gartner, Inc., worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017. Enterprise software spending alone is forecast to grow to $421 billion in 2019
- The global software licensing market is expected to grow to $14.34 billion by 2023.
- Software accounts for an average of 34% of an organisations IT budget and in some organisations as much as 50% of this goes to waste!
- 100% of organisations with 30,000 - 100,000 employees think that they are over licensed and losing money with nearly 20% stating that they are ‘very over-licensed’.
- 76% of organisations admit to deliberately over-licensing in fear of software audits.
- 56% of software audits result in additional charges to compensate for historical under-licensing. The IDC reports that for 21% of companies forced to pay “true-up” charges the amount exceeding $1 million.
- Over £1.7 billion is spent every year in the UK on unused software and associated services and this number rises to an estimated $32 billion in the US. This is primarily due to organisations paying for software that is either underused or not used at all.
- The top three most unused enterprise licenses are Camtasia Studio, Crystal Reports and Adobe InDesign. The education world wastes approximately 47% of enterprise licensed software. The government sector wastes the least at just 28%.
- 30% of software applications go completely unused, and a further 8% are used less than once a month.
- Over 80% of survey respondents admitted to having more than $100 of unused software on their PC. Although the average amount of unused software on a user's PC may actually be much higher at $414.50, not including shelfware.
- 60% of application producers state that it ‘should not be difficult’ for enterprises to determine which products they are entitled to use, and yet 85% of organisations are out of compliance with their software license agreements.
- IDC's Amy Konary estimates that up to 25 % of an organisation’s software budget will be spent dealing with license complexity alone.
- 64% of organisations are not using automated commercial software to manage their software licenses.
- Gartner predicts that most organisations can cut software spending by as much as 30% by implementing software licensing best practices.
It seems that there is a general trend for over-licensing, which, if you’re an ISV could have you rubbing your hands together with glee - your customers are regularly paying for more software than they need to. But in reality a non-value driven business model will not survive today’s modern software markets. The IDC predicts that by the end of 2018 close to 50% of organisations will have the processes and tools in place to better meter usage of their major on-premises software.
If you’re an ISV you don't just need to know how many licenses you’ve issued, you need to know whether your software is being underused- or even unused by your end customers. Ultimately the changing landscape towards enhanced software visibility translates directly to your bottom line. Gaining visibility into and control over IT assets is an extremely difficult task to accomplish using manual methods, software license keys and spreadsheets.
Contact us to find out how 10Duke products and services can help streamline your software licensing solution and future-proof your business.
Are you a software developer looking to sell more? Learn more from our guides:
Should You Build Your Own Licensing System or Buy It From a Specialist?
Software Monetization Guide – How to Monetize Software?
Software Licensing Guide – Why is it so important?
Why Software Companies Should Consider the Subscription Business Model
What is a Software License Manager? [Guide]
Software Licensing Solutions – Guide
Software Licensing Models – Ultimate Guide to Software License Types
Customer Identity and Access Management – What should a good CIAM solution provide?
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Here’s our rundown of some of the software licensing industry’s most interesting statistics.