How much money are you wasting in unused software licenses?

One of the most common ways businesses waste money is buying software that will never be used, but how much money exactly is being thrown down the drain in this manner?

The vendor 1E polled IT managers in an attempt to answer this question, and the number produced is a big one: $15.3 billion in the United States and United Kingdom, including $12.3 billion in the United States alone. That number is the amount of money spent annually on maintenance for unused software and shelfware.

CUT COSTS: 5 tips for managing Microsoft licenses

The study comes with the caveat that 1E is trying to sell new software called AppClarity that helps companies identify and eliminate software waste. You could also argue that $15.3 billion isn't much compared to the $3.6 trillion in worldwide IT spending forecasted by Gartner for 2011.

But it's still worth taking a look at how 1E says IT shops are wasting money. The "Software Efficiency Report" was performed by market research agency Opinion Matters and commissioned by 1E as well as the International Association of Information Technology Asset Managers and the Federation Against Software Theft. More than 500 IT pros from companies with at least 500 employees were surveyed.

Four out of five respondents "agree that there is more than $100 worth of installed but unused software per PC," and an even greater number of respondents "have undeployed software licenses, more commonly known as shelfware," 1E said in a company blog post this week. Although 80 per cent admit to $100 of unused software per PC, the report says the average amount of unused software on a user's PC is much higher: $414.50. That doesn't include sheflware.

"On average, at least 10 percent of all software purchased is destined to become shelfware - at a cost of between $145-$155 per user per year for each organization," 1E said.

The report arrives at the estimate of $12.3 billion wasted in the United States by assuming that organizations pay 20 per cent of the cost of software to vendors for annual maintenance services. If you take 20 per cent of the $414.50 worth of unused software on a user's PC, and 20 per cent of the $155.09 spent on new licenses that become shelfware each year per user, that adds up to $113.92 in "total maintenance cost on wasted software licenses per year."

Multiply $113.92 by the 108 million "regular business PC users in the United States," and that comes out to $12.3 billion.

Since this figure just accounts for ongoing annual costs, and not the original cost of the software, the report further claims "the software sitting unused on PCs in the United States could have historically cost those organizations $45 billion."

One potential flaw in this assumption is that enterprises often buy in bulk, and it could be cheaper to buy software for everyone even if not every person uses it. While the report mentions that one factor boosting the amount of unused software is that licenses "may be bundled together by the vendor," it doesn't seem to factor bulk discounts into the final amount of wasted money.

Still, it's clear a lot of money is being wasted, and the survey findings indicate that enterprises are lax in their attempts to minimize cost. Despite the high stakes, half of enterprises polled said they still use spreadsheets to record software licenses, and another quarter use paper-based filing systems or no process at all. Negotiating with vendors can help "reclaim" unused software licenses in exchange for refunds or new services, but more than three-quarters of organizations have never done so, the study found.

For businesses, there seem to be at least two solutions. Either create new manual processes to better manage software licenses, or purchase software that automates the process of identifying software license waste. (1E isn't the only vendor that sells this kind of thing; others include Flexera and HP.) If you opt for the latter, remember that buying the software isn't enough - you actually have to use it.

Follow Jon Brodkin on Twitter:

Read more about software in Network World's Software section.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftGartnersoftwaresoftware licenses

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jon Brodkin

Network World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?