Investing in engineering software license monitoring solutions may seem like a tough decision at first glance, but when you do the math, your first reaction might well be: why didn’t I implement this before? For example, you can easily save hundreds of thousands of dollars per year, with minimal investment, and bring transparency in terms of license usage within an organization and a boost in productivity and performance. We at OpenLM bring you real-life scenarios based on our clients’ or prospects’ requests, so check out below how a company can save $600,000 per year by implementing the OpenLM solution.
Every company manager is looking to optimize both budget and assets, so when we designed the OpenLM solution, we took into consideration both of these key factors. With OpenLM, you optimize engineering time utilization, cut down on license costs, and reduce license administration spending, as well. Let us show you how, based on a real-life example.
Calculating the budget
The organization has 700 engineers using software from two vendors. So, when calculating the yearly budget, we need to keep in mind the following costs:
- License procurement: to keep licensing costs low, we purchase 100 licenses from Vendor 1 and a further 100 from Vendor 2. We then make a calculation based on half of the engineers using one piece of software while the second half use the other engineering application.
- Work hours per engineer: in our case, we calculate $150 per hour, which includes associated costs.
- License management: we assume this to be $100,000 per year.
- License maintenance cost: that’s usually $1,000 per year.
Give the engineer what he or she needs when needed: software licenses
Calculating for one engineer working 40 hours per week, we get 2,080 hours/year/person. Now, multiply that by 700, and you get a stunning 1,456,000 working hours per year for the engineers only. To make our calculations simpler, let’s eliminate the additional costs we have included in the hourly wage of the engineer and take just $100 per hour. In this case, the total yearly wage of your engineers will be $145,600,000. That’s quite of a lump sum for any organization.
When it comes to working with engineering software using floating/network licenses, in real-life you must include the time spent on obtaining a license for the software the engineer wants to use during his work hours. By this, we mean the time spent on communication with IT admins or colleagues asking them for a software license, which goes by the minutes, but when you look at the yearly picture, this can accumulate to hours. This is the time lost due to a missing engineering software application management tool. Therefore, we calculate for 8 hours, or 0.38 percent of the total hours per year, so the total actually worked hours is reduced to 2,072 per year.
Save $560,000 by implementing an engineering software monitoring system
When transformed to dollars, this means you as an organization pay 5,600 hours per year, or $560,000, money which you can save by implementing an engineering software application solution such as OpenLM. With OpenLM on board, your engineers can pull the license they need from the license pool, as it helps you identify license hogs and eliminate idle time. The OpenLM solution even gives system administration the power to save the engineers’ work and close the app remotely if they see a drop in activity, according to a threshold you set within the company network.
So far, we have taken into consideration just the optimization of your human resources, which brings a total saving of $560,000 per year. That’s indirect saving, so let’s talk about the direct savings OpenLM enables the moment you install it on your system.
Cut down on additional costs
There are two direct costs you can reduce with the OpenLM solution: license maintenance and license management.
Considering the organization has 200 licenses, we calculate in a $1,000 maintenance fee per year for each, so the total IT asset cost per year for these two pieces of engineering software is $200,000 per annum for network license contracts. That’s an investment you have, let’s say, at the beginning of the year, with a certain usage scenario in mind.
However, the reality is always different, as is license usage. Without a proper license monitoring tool that gives you accurate reports covering activity and usage, plus accurate “true denials,” the 200 licenses will remain a fixed cost until you put the actual license usage under the loop and start analyzing the overall license usage per year.
That’s what OpenLM provides: reporting accurate engineering license usage in an easy-to-understand user interface with heatmaps and pie charts. As we are working with thousands of customers, we at OpenLM have observed that in most cases the required number of licenses for supporting high-quality of service is much lower than the actual number of purchased licenses. Please observe the image below, depicting a realistic dispersion of license utilization. When we say “high-quality of service,” we mean that the engineer gets what he wants, aka a software license. However, the truth is that license vendors do not provide real-time license usage information or advise against inefficient license allocation schemes. At times, software vendors even benefit from excessive license usage and charge software customers excessively.
So, to continue with our example, paying the license maintenance for 200 licenses without actually monitoring the real license usage benefits the vendor, not the organization, because the latter relinquishes control to the software provider. With OpenLM, you get full control over your engineering license usage, which, in most cases, means a direct saving of at least 15 percent of license maintenance cost. In other words, with OpenLM you save $30,000 per year, money which you don’t have to pay the vendor at the next license renewal date, as the OpenLM dashboard will give you an estimate of how many licenses you actually need to purchase to achieve 95 percent quality of service.
License management cost savings
Another important cost saving comes from the automation OpenLM provides out of the box for license management. Typically, we see a person (or more) in charge of license management, who, without a license monitoring system to hand, has to perform maintenance tasks manually and waste their time by commuting from one office to another. Just a quick example here: without a proper monitoring system installed on the license server, the person in charge of license management won’t know that a server is down until an engineer knocks on his door informing him about the issue. If that person had had the information before the engineer had walked into his office, then the organization would have saved both time and money on fixing the licensing issue.
With OpenLM, you have a complete monitoring system out of the box that automates license management tasks, saving precious time and money for the organization. So, returning to our example, we estimate license management cost at $100,000 per year. However, with OpenLM deployed on the organization’s network, you get a direct saving of 25 percent, or $25,000 per year.
So, to summarize, the total saving you make by simply using an engineering license monitoring tool within the organization we used as an example is more than $600,000 per year, out of which $55,000 is direct saving. That’s way more than the amount you pay for a solution, such as OpenLM.
Want to learn more about the OpenLM solution? Head to our website and register for a 30-day trial for free!