US Government to focus on reducing costs of software licensing

by 15 May 2016

Why is the US Government focusing on reducing the cost of software licensing?


What is The Megabyte Act of 2016?

A new bill titled ‘The Megabyte Act 2016’, or to give its full title ‘Making Electronic Government Accountable By Yielding Tangible Efficiencies Act of 2016’, has worked its way through the legislative process within America and aims to save the US Government hundreds of millions of dollars in unnecessary software licensing expenditure. The bill came in to effect on 29th July 2016 and can be found at the Congress.Gov Website. With both Democrats and Republicans backing it, it plans to make federal agencies utilize better management techniques for software licensing management and report these to Congress.

The bill follows on the back of a Government Accountability Office survey in 2014. This surveyed 24 federal agencies and departments and found only 2 with comprehensive policies. It concluded that this oversight on software license spending meant that the Government was missing out on savings.

It was estimated these potential savings could be significant considering that in 2011 the Department of the Interior reported saving approximately $80 million by consolidating its enterprise license agreements and it is reckoned that the Government as a whole spends more than $9 billion on software annually.

The Megabyte Act 2016 requires the OMB (Office of Management and Budget) to issue a directive requiring the CIO (Chief Information Officer) to develop a software licensing policy. This policy must:

  • Require the CIO of each agency to establish a comprehensive inventory of software licenses
  • Track and maintain such licenses
  • Analyze software usage to make cost-effective decisions
  • Provide software license management training
  • Establish goals and objectives of the agency’s software license management program
  • Consider the software license management life cycle phases to implement effective decision making and incorporate existing standards, processes, and metrics.

As a result the US government agencies need to implement a software asset management policy enabling licence management optimization. This will ensure that software is being efficiently used within the organisation minimising waste and reducing software purchasing costs.


Save Licensing Costs with License Pooling

One area that could produce immediate savings is pooling. This is where those departments with a surplus of licenses can make them available for use elsewhere in the Government, preventing an overall licensing surplus across the Government.

Due to the complexities of the major software vendors licensing agreements, such an approach to license optimization requires comprehensive, reliable and up-to-date data to achieve results.

A good SAM (Software Asset Management) solution, like one of the Certero technology (Covering Windows, Mac, Linux, Unix, SAP, IBM and Oracle to name a few), can deliver this. Firstly, by ensuring you have complete visibility of your IT estate (both hardware and software) from mobile devices to the cloud and then allowing you to analyze and optimize your position by matching your licenses and supporting documentation to the discovered software.

Only at this point would you be able to pool licenses across the organization, safe in the knowledge that you are not breaching compliance and so are at risk of audit fines and the cost of true-ups.


Need a Good SAM Solution for Software Licensing?

Implementing a good SAM solution is key for helping to reduce unnecessary software licensing expenditure.

Find out more about how the Certero for Enterprise SAM products can can help your organization to effectively ensure license compliance and help to successfully reduce the spend on software licenses.

Or, if you have a question on software licensing, please get in touch.

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