Extracting more value from software licences is key for businesses frustrated with sub-par usage

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Extracting more value from software licences is key for businesses frustrated with sub-par usage

As costs continue to rise, licensing has become a major pain point for businesses who aren't seeing a requisite rise in value.

Published on 16th August 2023

As the world becomes accustomed to cloud computing, licensing has become a major pain point for businesses whose costs continue to rise while they don’t see a requisite rise in value, says Braintree Managing Director Heath Huxtable.

He adds that managing the regret of licensing, as he puts it, lies in choosing to work with consulting partners who sell value-added services as opposed to license resellers.

“Let’s be honest, licensing is a major bugbear for businesses and the money being spent is just becoming more and more. That doesn’t mean businesses want to shop around for the cheapest license to do the same thing. In our ongoing interactions with dozens of customers, it is clear that businesses want value for money. You see, built into the concept of cloud computing is the assumption that just because a service is available immediately that you will consume it – this isn’t the case,” Huxtable explains.

He draws the analogy of someone going to a workshop to learn about the power of something like Microsoft Excel. During the presentation, they will be shown the universe of what’s possible but in reality, they will only use a fraction of that.

“In reality, the user comes back down to consuming about 20-30% of the functional use of the product, yet they pay for the full product. This is what leads to frustration. This is why it is crucial for a partner to conduct a license audit when working with a new customer, to gain insights into exactly what has been bought and what is being used,” he says.

Unlocking value

Huxtable says that there is a glaring need for partners to unlock value for customers so that licensing shifts from a bugbear to something that demonstrably improves their businesses and drives efficiencies. “A lot of the solution lies in what I like to call wrap-around services,” he explains.

“Think of Office 365. It’s almost guaranteed most businesses have workforces using no more than 30% of the functionality of a product, never mind working with analytics and modelling tools, for example. But Microsoft Excel, is part of Office 365, and within that ecosystem, there is OneDrive, SharePoint, Teams, and much more, and by leveraging the power of wrap-around services that come with a single license purchase, you start to unlock progressively more value for the customer.

“This type of exercise is not possible when simply clicking onto the Office website and buying a license, or procuring through a reseller. A consulting partner, on the other hand, exists to consult around services and software. That’s a differentiator that almost immediately takes licensing from the realm of business irritation to business value.”

Huxtable says that by anyone’s estimation, spending $500 and using $90 worth of services is frustrating. He says that to counter this, businesses would do well to actively seek out partners that prioritise managing licensing costs and consumption in alignment with their business expectations.

“Ultimately, the exercise is to shift customers to a space where they are making full use of what they pay for, and not paying more for something that they don’t use. It is a simple concept, but one that many businesses are yet to fully realise.”