Global software spending is set to go over $1 trillion in 2024. Still, CIOs are shifting their priorities to cost control and expense management. This development sets up the perfect scenario for increased software license management (SLM) adoption and growth.
Software License Management Surge in The Horizon
A recent Gartner study underscores a notable shift in organizational strategy towards IT projects. The emphasis now leans heavily on cost control, efficiency, and automation. This change signals a reduced appetite for IT initiatives that require extended periods to yield returns on investment.
Interestingly, this shift aligns with another Gartner report’s revelations. This separate study indicates that nearly 60% of digital initiatives are perceived as taking an overly extended time to come to fruition, with 52% being seen as slow in delivering tangible value. Such insights further underscore the changing priorities in the IT landscape, emphasizing swift value realization and operational efficiency.
A significant 74% of businesses are currently readjusting their technological investments. This realignment encompasses actions such as optimizing software seat allocations, postponing technology acquisitions, streamlining technology platforms, conducting thorough vendor contract reviews, identifying the most advantageous software licensing models, all while gravitating towards cost-effective services, and decommissioning redundant infrastructure.
Here, software license management solutions prove invaluable, as they serve as guiding forces in these recalibrations, providing essential insights and recommendations to facilitate the process.
Tangible Outcomes with Software License Management
The evident benefits of software licensing management are particularly pronounced in sectors that rely heavily on costly engineering and custom-built licenses.
For instance, a company in the oil and gas industry reported savings nearing $1.4 million within just two years post-implementation. Similarly, a company specializing in geoscience and surveying reduced their Autodesk software licensing expenses by 50%, while granting them visibility into their license utilization.
The positioning of software license management tools is indeed advantageous. These solutions not only facilitate organizations in making informed licensing decisions but also contribute significantly to IT cost efficiency.
CIOs Steer IT Budgets with a Keen Eye on SLM
As software expenses continue to rise according to industry forecasts, CIOs are intensifying their efforts to manage software-related costs. This trend underscores the growing importance of and the likely increased adoption of software license management.
Organizations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns.”John-David Lovelock, Distinguished VP Analyst at Gartner
Currently, IT departments oversee approximately 43.5% of an organization’s total IT budget. This data suggests a clear trajectory towards a more tech-focused approach in modern businesses. Furthermore, predictions suggest that this will increase to 50% in the next three years.
Although only 28% of CIOs prioritized cost control in 2023, 55% say they are no longer in reactive modes; they actively scout for business opportunities. This proactive mindset extends beyond merely seeking new technologies; it also encompasses identifying and capitalizing on cost-saving avenues.
Considering the indispensable nature of software licenses within corporate frameworks, CIOs are increasingly inclined towards adept software license management. Such a strategy guarantees a synergy between prudent software investments and maximized returns. With CIOs poised to have an even more significant sway over IT budgets, the imperative for integrated and sophisticated software license management solutions intensifies.
Software License Management: Growth Beyond 2024
Poised for significant growth, the global software license management market is currently valued at $2.46 billion and is expected to soar to $9.6 billion by 2033. While software cost optimization remains a primary catalyst, several key drivers underline this projected upswing:
Evolving Software Licensing Models
The software industry continuously evolves and diversifies its licensing structures. Given the complex spectrum spanning cloud subscriptions, on-premises, perpetual, and hybrid licenses, the challenge of effectively managing software licenses has brought the necessity of adept solutions to the fore.
Compliance and Audit Risks
As regulatory agencies amplify their oversight on software compliance, the repercussions of non-compliance become increasingly consequential for organizations. In this context, proactive software license management has evolved from a mere strategic advantage to a vital operational prerequisite.
Strong Negotiation Position
The digital transformation journey propels enterprises into expanding and diversifying their software portfolios. Given this expansive digital footprint, the urgency for robust software license management (SLM) systems becomes paramount, guiding organizations towards streamlined and cost-effective operations.
Navigate the SLM Landscape in 2024 with Open iT
Open iT offers sophisticated software license management solutions and services to enterprises spanning diverse industries. Our footprint extends across crucial sectors such as energy, oil and gas, manufacturing, engineering, aerospace, and construction.
By partnering with Open iT, numerous organizations, including those listed in the Forbes 500, have harnessed the full potential of their software licenses, achieved remarkable cost efficiencies, fueled their digital transformation journeys, and spurred growth in their domains.
Discover the distinct Open iT edge. Talk to an Open iT representative today.