Report: Nearly half of software licenses are unused, wasting $44M+ per month

Only 5% of IT leader respondents to a Nexthink survey have complete visibility into the software licenses their organization uses.

Almost half of all installed software and licensed SaaS applications went unused by employees, according to a new report from Nexthink. This results in unused software license costs of about $44,743,651 per month across more than 30 popular software tools or $536,923,8121 per year, the researchers found.

In this poll of 200 IT leaders, only 5% of respondents claimed “complete visibility” into the total number of software licenses being used by their employees. In terms of license utilization, the most widely used tools are collaboration apps (nearly 64%), followed by project management (nearly 49%), integrated developer environment (nearly 45%) and BI tools (37.55%).

In addition, “many knowledge workers are using multiple applications for the same purpose.’’ For example, 37% of employees use three browser applications to access their SaaS tools, while 31% use two collaboration tools, according to the report.

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Most rarely used software apps

The report found that the most rarely-utilized apps (less than 15% of the time) are:

• Tableau.
• Trello.
• Notion.
• Spotfire.
• BlueJeans.

Most actively used software apps

The software apps most used (over 50% of the time) are:

• Slack.
• Teams.
• Zoom.
• Webex host.
• Asana.

Every IT department and company is different, and some prefer that their user base have access to dozens of applications — even if those applications might overlap in functionality, the report noted.

However, “employees can quickly become confused when presented with multiple tools that achieve the same objectives,’’ the report said. “Imagine a single marketing campaign has at its disposal 15 separate SaaS tools, and 10 of those tools share the same functionality and purpose. When faced with too many options, coordinating among different teams quickly can turn into a nightmare.”

Nexthink’s research found that “browsers and collaboration apps present the most opportunity for tool cutting/consolidation, while employees who use business intelligence tools tend to stick to one favored application.”

Steps IT leaders can take to better use software tools and budgets

The report recommends IT leaders find the right balance for their digital employee experience.

With that in mind, organizations must develop an effective software purchasing or renewal strategy to eliminate waste, reduce unnecessary spend and streamline processes, Jon Cairns, senior vice president of technical services at Nexthink, told TechRepublic.

Further, CIOs and CEOs must use discretion to understand what their enterprises most need.

“If you’re increasing software spend, yet your employees are functioning well on existing software, the resource spend of a transition and training employees on a new system can make the cure worse than the disease,’’ Cairns said.

To make the right financial decisions around software licenses year after year, organizations should have complete visibility into the full breadth of the digital systems their teams are relying on.

“Full breadth of context means being able to identify those that are most utilized, determining what tools can go entirely and what can be replaced with more efficient and cost-effective — learning to do more with less,’’ Cairns said. “The C-suite and IT leaders must focus on strategic spending in areas like operational run-rates, day-to-day support and transformation projects, letting software spend complement their result.”

More tips to reduce software bloat

The report recommends five tips to help alleviate the software bloat issue:

1. Conduct software usage audits for smarter SaaS vendor negotiations.
2. Create accurate digital personas based on binary and variable IT traits for smart software license allocation.
3. Actively monitor employee software usage for cost bloat.
4. Layer employee sentiment onto usage data to make better data-driven decisions.
5. Regularly repeat previous steps to renew, reduce or reallocate software licenses.

Survey methodology

Nexthink said the software data in this report was taken from 6.12M anonymized customer devices in eight industries and 12 geographic regions that use Microsoft Windows, and that not all software found was from a 100% licensed version.

“However, we believe the data we’ve collated provides a reasonable estimate for how much unused software costs the corporate IT industry,’’ the report said.

Read next: Software usage policy (TechRepublic Premium)