A software license management system is the solution for companies navigating an all-cloud workplace. It helps avoid costly pitfalls like unused licenses or duplicate subscriptions.
SaaS pricing models are becoming more sophisticated, with providers offering multiple versions based on consumer value metrics.
This complexity demands a system to track licenses, usage, and costs across various applications. That’s why let’s talk in more detail about the software license key management system here.
What is a Software License Management System?
In simple terms, a Software License Management System (SLMS) is the most efficient way to organise all your software licenses.
It lets you track your software, who is using it, when renewals are due, and how much it costs.
The best way to think of it is as a specialised asset management software that focuses on your software assets.
But it’s more than just keeping things tidy. The world of software pricing is getting pretty complex, and you need a solution that can keep up.
SaaS providers use different pricing strategies based on user count and usage, making it easy to lose sight of the overall costs.
That’s where an SLMS is a vital part of your IT management software ecosystem. Without a proper SLMS, you will undoubtedly overspend, especially when your employees are not fully utilising all the software they can access. utilising
An SLMS will identify and reclaim those unused licenses, putting that money back in your pocket. An SLMS also ensures compliance with licensing agreements, avoiding potential legal issues.
Or, kindly check how to identify and manage such waste in “Your Silent Budget Killer: How to Stop the Leaks of SaaS License Waste” for insights on reducing unnecessary SaaS spend.
Why do Software License Management Systems Matter?
As we touched upon earlier, an SLMS keeps your software licenses organized. But it’s more than just an efficient filing system; it’s about gaining control over a significant aspect of your business expenditure.
As mentioned before, SaaS spending can easily balloon out of control, especially with the rise of shadow IT—where departments purchase software without central IT oversight.
ServiceNow states that large enterprises can have an average of 2949 apps in use, many of which IT professionals are unaware of. This lack of visibility translates directly into wasted spend.
The same paper notes the rapid growth of the SaaS market, with revenue projected to reach $143.7 billion by 2022.
Without a proper SLMS, a sizeable chunk of this spending could go towards unused or underutilised licenses.
Furthermore, an effective SLMS goes beyond simple asset tracking software. SLMS plays a crucial role in your software asset management strategy.
Integrating data from various sources allows you to identify and reclaim stale licenses, optimise license allocation based on actual usage, and even negotiate better contracts with vendors.
This, in turn, leads to cost savings and improved operational efficiency. Imagine having a clear picture of your software landscape and the ability to make data-driven decisions that directly impact your bottom line. That’s the power of a robust SLMS.
Read more about “What is SaaS Management? How Does It Kill Shadow IT & Save Budget?” to understand how it helps streamline software usage and cut costs.
Types of Software Licenses
There are several types of software license management systems, each with clearly defined rules for usage, redistribution, and compliance.
The most common types of software licenses are perpetual, subscription, and usage-based models. Each has unique operational implications.
For a comparison of license models, you can visit “SaaS License vs. Subscription: Benefits, Costs, and Key Differences Explained.“
Perpetual licenses are a one-time purchase that allows indefinite usage but often requires separate maintenance fees.
While perpetual licenses provide stable, long-term cost management, they require careful monitoring.
Unused perpetual licenses can remain dormant, accumulating unnecessary maintenance costs over time.
Subscription licenses are the clear choice for SaaS platforms. They are time-bound and typically billed monthly or annually.
This type of license allows flexibility in scaling usage, but it is a financial risk if you overpurchase or underutilize.
A software license management system is invaluable for real-time tracking of active subscriptions and alerting IT managers to lapses in usage.
Lastly, usage-based licenses, also known as pay-as-you-go, are the future. They are gaining traction, particularly for cloud services.
Use-based pricing is the most cost-efficient option for companies with fluctuating demands. However, it requires meticulous monitoring to avoid unexpected cost surges.
This type of license allows flexibility in scaling usage, but the financial risk can be high if over-purchased or underutilised.
If you’re exploring different options, “Types of SaaS License Models Explained: Find Your Perfect Fit” offers a detailed look into finding the most suitable model for your business needs.
Features of a Software License Management System
A comprehensive software license management system is the solution for businesses, especially small to medium enterprises, who need to track, monitor, and optimise their software assets.
Octobits is a notable example of an all-in-one platform tailored specifically for IT managers and managed service providers (MSPs).
Octobits provides a holistic SaaS license management system; unparalleled visibility and control over IT assets, including devices, billing, and reporting, all from a centralised dashboard.
Octobits streamlines license management by consolidating billing information across various IT services.
This centralisation reduces redundancy and optimises expenses, addressing a common challenge where up to 30% of software licenses in organisations go unused.
Octobits’ single login feature simplifies access to all IT systems, enhancing operational efficiency and reducing the complexities associated with managing multiple credentials.
Furthermore, Octobits seamlessly integrates with major IT vendors, including Microsoft 365, Azure, AWS, and CrowdStrike.
This interoperability is essential for businesses leveraging multiple platforms. It allows them to consolidate software license data within a unified view.
Octobits automates license management with real-time alerts and reporting, preventing compliance violations and overspending.
Therefore, the comprehensive reporting feature of Octobits is an invaluable tool for small to medium-sized businesses (SMBs). It provides insights into software utilisation, enabling IT managers to identify underused or overlapping licenses.
Also, an effective SLMS like Octobits ensures compliance with various licensing agreements, safeguarding businesses from potential legal issues.
For a guide on optimising these agreements, have a look at “SaaS License Agreement: From Common Mistakes to Best Practices.”
In Closing
The rise of SaaS models and complex pricing structures makes maintaining oversight of software usage, compliance, and costs more challenging than ever.
Octobits is the gold standard for effective SLMS platforms. As IT asset management software, Octobits offers streamlined management through centralised billing, real-time usage tracking, and seamless integration with major IT vendors.
Such a system empowers businesses, especially small and medium enterprises, to gain comprehensive visibility over their software assets, reclaim unused licenses, and make informed, cost-saving decisions—it’s as simple as that.
And yes, a software license management system is not just an operational tool. It is a strategic asset that ensures compliance, optimises spending, and supports sustainable growth.
