Recently, I purchased a new laptop. I also wanted to buy Microsoft Office Suite. The last time I purchased it for myself, it was just about $100. Imagine my surprise to discover that Office is now subscription based, and one cannot purchase a permanent copy.
I was not happy, but this is now a trend in the software industry. Consumers must either purchase these renewable subscriptions or purchase a “license,” also renewable – usually annually. While I understand the profit model here – long-term sustainable income for the software owner – this can be a costly budget item for a business. There are some options and “tricks,” however, which can reduce the cost of software licensing. Here’s a healthy list of them.
Take e-commerce, for example. If you have a small-to-mid-sized business, Prestashop is free and covers virtually every aspect setting up and maintaining a store online. Opencart is another nice open-source solution. The cost savings could be in the thousands of dollars. This type of saving is especially important for a new start-up.
You need to know what you can and cannot do with the software licenses you are purchasing. If, for example, the software is standalone and is installed in specific computers, it obviously cannot be copied and installed on additional units. IT departments can usually find ways around the embedded restrictions to install on additional computers, but do not be tempted. The penalties can be severe. Remember, you signed a licensing agreement.
This is often called “parking lot” usage. Suppose you have 12 employees, each of whom uses a particular software throughout the day, but at different times. Instead of purchasing 12 licenses, one for each computer, purchase 8 that are managed in the cloud, and see if you can get by with that number. Any number of users can share the 8 licenses with an individual password, but only 8 people can be “on” at a time. It will mean scheduling tasks more carefully perhaps, but it could add up to significant cost-savings. The analogy to the parking lot is that as soon as someone back out of his/her space, someone may pull into that slot.
Many software license fees are based upon peak usage. This usually happens the second year of licensing. Usage is monitored by the provider and then the new license agreement is based upon the day(s) when usage was at its peak. Negotiate for a fee based on average usage instead. It will always be cheaper.
This cost-savings measure relates to being certain that when computers are being replaced, those being discarded have licensed software wiped and that eliminating that computer allows a new computer to assume that license without additional cost to you. Of course, if your software is managed in the cloud, this will not be an issue. Also, if you are doing computer refreshes, make sure that re-installing that software on a computer is not assessed as an additional license. These issues can be prevented by notifying the provider in advance – just don’t forget to do it.
You can save a bundle if you consolidate all cloud-based licenses into a single SaaS agreement and get a discount for bulk purchasing. Usually, the licensing fees will be based upon the total number of users “on” at a given time rather than the total number of users at any time. Many organizations fail to realize that they can do this, and the provider cannot be counted on to bring it up.
When licensing fees are based upon total time in use, you need to be certain that the software is not sitting open on a computer that is not actually in use. Install automatic log-offs after a certain period of idle time. Often providers have the ability to install these for you, so be certain to ask – it should be free.
Don’t wait until the last minute to renew your licenses. You will be desperate at that point and have no negotiating leverage. If, however, you begin the negotiation process well in advance of the deadline, you can usually get some solid discounts for the next renewal period. You might also suggest that you are “shopping around” and you’d like to know the best price now, as you seek other bids. This business has become highly competitive, and salespeople usually have lots of flexibility.
If you have a user who works from home part of the time or who travels, have IT set up remote access by that user of his/her office computer. Once that is set up, there is no need to purchase a license for each device that individual may use.
This should be someone in IT. In large organizations, there is often not the strict monitoring of adding new licenses that there should be. As a result, individuals add licenses when they really don’t need the software, or use it so seldom, they could use another computer that has the license. No one gets a software license without approval, and that approval only comes from a single person. And only that single person has the user and password information to add licenses. Central control of number of licenses is really important if costs are to be kept down.
Usually a contract is in two parts – a price for the licensing and a separate pricing for the technical support. When you get ready to re-negotiate or upgrade, know that those support agreement prices are really flexible, even free sometimes, when you take the upgrade. You have to ask – you don’t get what you don’t ask for.
There are always “new kids on the block” who will offer some great deals at first to beat out the “older kids.” While making the change to a new program may be painful, it may be worth the savings. And no one sells licensed software today without free set-up and training of everyone who is impacted. This is also a great leveraging tool to use with your existing provider, who may try to match the competitor’s price in order to keep you.
Sometimes a provider has different variations of the same software. And sometimes, different departments in the same organization are using different versions. See what kind of a discount you can get if you put everyone on the most upgraded version in use. It’s easier for you to manage anyway, and you might find that, in the end, it costs no more for everyone to have that better version.
You may be a freelancer working on your own. You too can save a good amount by using free versions of premium packages or simply free open-source software that performs the same tasks as other fee-based packages.
All fee-based AV software is licensed and you must renew your subscription every one or two years, according to your agreement. Now, however, there is a slew of free AV software. One of the issues with using any of the free suites is that they may try to install some fee-based add-ons, which you really have to watch for, or annoying pop-ups that urge you to buy the “better” premier package.
One way you can solve both the issue of paying and the issue of getting inundated with sales pitches.is just to down free Microsoft Security Essentials for Windows 7. For Windows 8 users, “Microsoft Defender” is already built-in. If your computer is used only by you and you are pretty careful about where you go online, you should be just fine with either of these AV pieces.
Photoshop and Lightroom now cost about $10/month. But if you want to be really frugal, there are completely free great software packages. Check out Gimp, Irfanview, or Pixlr Editor. You can always return to the paid software, but you really have nothing to lose.
Especially for personal use, and if you don’t need the advanced features, you may want to save by not purchasing Office 365 or their Office Suite that is sold as a basic package. Instead you might want to try LibreOffice or Open Office. Google Drive Productivity Suite may also be a great option. At least try them out – again, you have nothing to lose.
You can get cloud-based password management for about $1 a month, but if you want it free, you can use a variety of software programs, like KeePass – it’s open source and works on PC’s and mobile devices both.