Do you know what you’re paying for?
It all sounds so innocent and affordable at first. Next thing you know the costs mount up and sneaks up on your bottom line. I’m referring to subscription-based licensing costs.
These runaway expenses are present in our personal lives; think Netflix, Amazon, Hulu, Peacock, etc. And even more in our business that depends on subscription licensing for endpoint protection, email filtering, email backup, cloud backup, cloud storage, and VoIP. And then there’s business software for accounting, CRM, ERP, practice management, inventory, order entry, POS, or any other numerous offerings of software-as-a-service.
And then for each subscription-based software license there is a service level that’s starts at a base price and increases for additional features. And which of your staff needs what level of licensing for their role in the company?
Who approves, or expenses, these subscription-based licenses? Are these licenses centralized and provisioned in a single business account?
From endpoint protection to productivity suites, these tools power everyday workflows and enhance organizational efficiency. However, without proper oversight, subscription licensing can spiral into unnecessary costs, operational inefficiencies, and security vulnerabilities. Regular auditing of these licenses is crucial to optimize costs, ensure compliance, and streamline IT management.
Why Auditing Your Software Licenses Is Essential
Subscription-based software models have revolutionized the way businesses acquire and use technology. Instead of large upfront costs, businesses can scale their software needs through monthly or annual fees. While this model offers flexibility, it also introduces challenges:
Cost Control: Without periodic audits, businesses risk overspending on unused or unnecessary licenses.
Compliance: Incorrect or expired licenses can lead to non-compliance with vendor agreements, exposing the business to potential penalties.
Security Risks: Overlapping or unused licenses can create vulnerabilities, such as unauthorized access to business-critical systems.
Operational Efficiency: Auditing ensures that employees have access to the right tools without redundancy or overlap.
What to Look for During an Audit
When conducting a subscription license audit, focus on the following key areas:
Inventory of Current Subscriptions: Compile a comprehensive list of all software licenses and subscriptions in use, including cloud services, business applications, and endpoint protection tools.
Utilization Rates: Analyze whether all purchased licenses are actively used. Deactivate unused or underutilized licenses to reduce costs.
Duplicate or Redundant Subscriptions: Identify any overlap between software tools serving similar purposes.
Appropriate Licensing Levels: Ensure the subscriptions align with the business’s operational needs. For example, does every user need a Premium tier of Microsoft 365, or would the Standard level suffice?
Renewal and Expiration Dates: Keep track of renewal schedules to avoid disruptions or lapses in service.
Compliance with Vendor Agreements: Verify that the organization is adhering to licensing agreements to prevent legal or financial repercussions.
Common Issues Found in Subscription Licensing Audits
Unused or Orphaned Licenses: Licenses that remain active but are not assigned to any current employees or systems.
Rogue Licensing: Unauthorized purchases made by individuals or teams outside the IT department’s purview.
Overprovisioning: Allocating high-tier licenses to employees who don’t require advanced features.
Underprovisioning: Employees lacking access to the tools they need for their roles.
Missed Discounts or Cost-Saving Opportunities: Overlooking bundled pricing or volume discounts available from vendors.
The Financial Benefits of Regular Audits
In my world, every dollar counts. Auditing subscription licenses can uncover significant cost-saving opportunities:
Eliminating Waste: Deactivating unused licenses reduces expenses immediately.
Optimizing Licensing Levels: Aligning subscriptions with actual usage ensures you’re not paying for features you don’t need.
Negotiating Better Deals: Regular reviews position your business to renegotiate contracts or explore alternatives.
Addressing Rogue Licensing
One of the most overlooked risks in subscription management is rogue licensing. When departments or individuals purchase software without consulting the IT or procurement team, it can lead to inefficiencies, duplicate tools, and increased security risks. Centralized license provisioning eliminates this issue by ensuring all purchases go through a standardized approval process. This not only prevents unnecessary expenses but also strengthens security and compliance by maintaining clear oversight of all software in use.
The Benefits of Centralized License Provisioning
Centralized provisioning offers multiple advantages for organizations:
Improved Oversight: IT teams gain a clear view of all active subscriptions, reducing redundancy.
Enhanced Security: Centralized control helps manage access and deprovision accounts when employees leave the organization.
Streamlined Budgeting: A unified view of all software expenses simplifies budgeting and financial planning.
Vendor Relationship Management: Consolidating licenses under a single management system can make it easier to negotiate better deals and track renewals.
Common Types of Subscription Licensing
Every business today typically relies on a variety of subscription-based tools to operate effectively, including:
Endpoint Protection: Tools like Norton, McAfee, or CrowdStrike to safeguard devices from malware and cyber threats.
Business Applications: Specialized software for customer relationship management (CRM), enterprise resource planning (ERP), or project management, such as Salesforce or Trello.
Productivity Suites: Tools like Microsoft 365, Google Workspace, and Adobe Creative Cloud for document creation, collaboration, and design.
Cloud Services: Infrastructure or software-as-a-service solutions like AWS, Azure, or Dropbox.
Ensuring the Right License for the Right Purpose
Licensing tiers often vary significantly between vendors. For example, Microsoft 365 offers multiple plans tailored to different business sizes and requirements. An employee handling basic tasks might only require the Business Basic plan, while advanced users might benefit from Business Premium or Enterprise tiers. Similarly, Adobe Creative Cloud offers individual app licenses and comprehensive suites. Matching licenses to roles is essential to avoid overpaying or under-serving your team.
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Regular auditing of subscription-based software licenses is an indispensable practice for all businesses. By maintaining an accurate inventory, optimizing usage, and addressing rogue licensing, businesses can reduce costs, enhance security, and improve operational efficiency.
Centralized provisioning and thoughtful license management ensure that the right tools are in the right hands, empowering teams to work smarter and more effectively. RIATA can help you with auditing and understanding these subscription-based licensing costs. We will help you understand your options and match your staff with the appropriate service level for their role. Take the time to audit your licenses today—your bottom line will thank you.
Contact RIATA today and we’ll be glad to provide a no obligation consultation to help you better understand your licensing options and total costs.
About the Author: Tommy Wald is CEO of RIATA Technologies, a Managed IT Services Provider headquartered in Austin, TX. He can be reached at TWald@RiataTechnologies.com or (737) 249-9697.
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