Fragmented software licensing continues to undermine federal software asset management (SAM) across U.S. agencies, limiting visibility, increasing compliance risk, and generating avoidable spending. Despite policy frameworks and ongoing efforts in federal IT management, many organizations still lack the data needed to support effective software license optimization in federal environments.
Strengthening federal IT procurement strategy and leveraging GSA software solutions available through the GSA Multiple Award Schedule (MAS) can help agencies improve control, reduce waste, and achieve cost optimization in the federal government.
The Ongoing Challenges in Federal Software Asset Management
Federal agencies operate in highly complex IT environments. The Government Accountability Office (GAO) reports that over $100 billion is spent annually on IT and cybersecurity. Naturally, expectations around efficiency and accountability are high. Yet fragmented and duplicative software licensing remains a common issue.
In many cases, agencies lack a complete view of what software they own, how it is being used, and where overlap exists. This makes it difficult to manage costs, align procurement decisions, or take full advantage of GSA software solutions. It also weakens broader federal IT procurement strategy and limits progress toward consistent federal software asset management practices.
Independent research confirms how costly this gap can be. Gartner highlights the importance of identifying underused or duplicative technologies as a core part of IT cost optimization, noting that organizations must continuously review and eliminate low-value or unused software spend.
Notably, federal evidence shows the impact of better management. GAO also stated that agencies have achieved approximately $2.1 billion in savings through improved software license management. This figure underscores the tangible return on investment when agencies commit to structured license management and suggests that agencies not yet doing so are leaving significant savings on the table.
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The Problem: Fragmented Software Licensing Across Federal Agencies
Fragmentation is largely driven by how software is acquired and managed. The result is a procurement landscape where the same software may be purchased multiple times, under different terms, at higher per-unit cost.
Procurement is often decentralized. Individual teams or departments make purchasing decisions based on immediate needs, without full visibility into existing licenses elsewhere in the organization. Over time, this leads to multiple contracts for the same software, inconsistent terms, and missed opportunities to align with category management in federal IT.
The challenge is more pronounced given the range of software used across government. Agencies depend on:
- Engineering and simulation software (CAD, CAE, EDA)
- Scientific and research applications
- Geospatial and GIS platforms
- Data analytics and AI/ML tools
- Enterprise IT systems and cloud platforms
Each category carries distinct licensing models, renewal cycles, and compliance requirements, compounding the challenge of unified oversight.
At the same time, broader industry data shows how widespread inefficiency can be. Gartner estimates that 30% to 50% of software is unused or underutilized, a figure that, applied to federal IT spending of over $100 billion annually, implies tens of billions in potential waste.
How Fragmentation Shows Up in Practice
Fragmented software licensing in federal agencies has been repeatedly documented in oversight reports.
For example, GAO found that agencies sometimes award multiple contracts for the same IT services to the same vendor, purchases that consolidated procurement would have prevented.
In a more recent review, GAO reported that many federal agencies do not have sufficient data to determine whether they are over- or under-purchasing software licenses, limiting their ability to identify duplication and reduce costs.
The Impact: Cost, Risk, and Operational Inefficiency
The effects of fragmented licensing hit agencies in two places: their budgets and their capacity to operate efficiently.
Agencies dealing with limited visibility often encounter:
- Duplicate purchases across teams or programs
- Higher costs per license due to lack of consolidated agreements
- Missed volume discounts from unconsolidated purchasing agreements
- Increased audit exposure, affecting federal software licensing compliance
- Additional administrative burden managing separate contracts
At the same time, the potential upside is clear. Industry benchmarks show that organizations can reduce software-related costs significantly through better management practices. As demonstrated by the $2.1 billion in documented savings, the returns from disciplined license management are substantial and well within reach.
Why Software License Fragmentation Persists
The issue is not new, and it is not caused by a single factor.
Several conditions contribute to it:
- Decentralized procurement models that limit coordination
- Incomplete or outdated software inventories
- Variability in SAM maturity across agencies
- Disconnected systems across IT, procurement, and finance
- Short-term purchasing decisions driven by immediate needs
Policies such as the MEGABYTE Act, which requires agencies to develop comprehensive software licensing policies and inventories and initiatives supporting category management in federal IT provide a strong foundation. However, without the systems needed to generate accurate, real-time data.
The Gap: From Policy to Execution
Many agencies have taken steps toward improving federal software asset management, but execution often depends on outdated methods.
Common approaches still include:
- Periodic manual inventories
- Spreadsheet-based tracking
- Reactive, audit-driven reviews
These methods are difficult to maintain in environments that include:
- High-performance computing (HPC)
- Concurrent licensing models
- Hybrid and multi-cloud systems
- Distributed users across locations
Without continuous visibility into usage and entitlements, it becomes difficult to support software license optimization in federal environments or maintain consistent federal software licensing compliance.
The Solution: Data-Driven Federal Software Asset Management (SAM)
The antidote to fragmentation is not more policy, it is better data.
In practice, this means:
- Continuously adjusting license allocations based on demand
- Centralized visibility across software assets
- Tracking actual usage in real time
- Aligning procurement with category management in federal IT
- Breaking down silos between IT, procurement, and finance teams
Agencies that treat software management as an ongoing discipline, not a periodic cleanup, consistently outperform those that don’t, both in cost efficiency and compliance posture.
WEBINAR: See how you can improve license efficiency and strengthen your SAM strategy with real usage data. Here’s your invitation to watch the recording.
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Aumentando a eficiência da licença com o ServiceNow® SAM Pro e o Open iT
Operationalizing SAM Through GSA Software Solutions
Putting this approach into practice requires the right tools.
Solutions available through the GSA give agencies access to platforms designed to support federal software asset management at scale.
These tools typically provide:
- Usage analytics
- Entitlement tracking
- Procurement intelligence
GSA contract holders, including Open iT, offer capabilities helping agencies replace guesswork with a clear, data-backed picture of software utilization across the enterprise.
Open iT: Enabling Comprehensive Federal Software Asset Management
Open iT focuses on providing usage data and license intelligence for complex software environments.
Its capabilities are often applied to:
- Engineering and simulation software
- Scientific and research applications
- Geospatial and GIS platforms
- High-performance computing (HPC) environments
- Cloud and hybrid systems
Open iT is purpose-built for the same complex environments where fragmentation is most acute.
By providing detailed insight into how software is used, Open iT helps agencies:
- Identify unused or overlapping licenses
- Improve visibility across distributed environments
- Support federal software licensing compliance
- Reduce total cost of ownership across the software portfolio
As a GSA-certified vendor, Open iT is available through established federal acquisition pathways and integrates directly into existing federal acquisition and category management frameworks.” This sounds more confident and operationally credible.
Fixing Federal Software Asset Management Starts with Visibility
Fragmented licensing continues to limit the effectiveness of federal software asset management. The drivers—limited visibility, decentralized procurement, and inconsistent practices—are well understood. What remains is execution.
Improving software license optimization in federal environments starts with better data. Agencies that establish clear visibility into software usage are in a stronger position to reduce waste, strengthen federal software licensing compliance, and make more informed procurement decisions aligned with federal IT procurement strategy.
Agencies that act now, establishing real-time visibility and disciplined license governance, will be better positioned to meet rising expectations for IT accountability, reduce waste, and reinvest savings where they matter most.
Connect with Open iT today to learn how agencies like yours have reduced software waste, strengthened compliance, and built a foundation for smarter IT procurement.
Fix Fragmented Licensing and Take Control of your Federal SAM
