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Software: Use It or Lose It

Metering can simplify application licensing decisions -- and help ensure that IT resources aren't wasted.

With money tight and staff stretched thin, the thought of overspending on software licenses or internal support can make CFOs and their IT counterparts blanch. That’s why, despite evidence that IT spending will actually decline this year over last (by 0.1 percent, according to a January survey by Meta Group and First Boston Corp.), a small Texas company called Scalable Software Inc. has found an eager market for its products.

The company’s Survey Technology Manager software sits on PCs and “meters” the usage of virtually every application an employee might use. Metering software is not new. What sets Survey apart is that it doesn’t simply note whether an application is open or not, but monitors keystrokes and mouse clicks to measure exactly how much use each application receives.

Armed with such information, corporate managers can make better decisions about licensing (for example, do you extend the license to employees or departments that rarely, if ever, use the software?), and make sure that development and support efforts are prioritized for the applications that get the most use.

Gavin Atkinson, director of application development at executive search firm Russell Reynolds Associates Inc., became a believer after he attempted to get a handle on software usage at the company’s 31 global locations. When it came time to decide how many licenses to buy, “we sent out questionnaires to staff to find out who needed to use the software, and only about 40 percent of the people responded,” he recalls. “We could have saved so much money if we had known what we were using.”

Next time around, he’ll have the benefit of Survey, which sends managers a report via a Web interface, breaking down software usage data according to what was used, how long it was used, and by whom.

Historical usage patterns can also be compiled, which can help companies strike better licensing deals. When Atkinson renegotiates Russell Reynolds’s Microsoft license fees next November, “we’ll have a full year’s worth of data,” he says. With “usage-based pricing” becoming more popular throughout the IT world, the customers who have the best data may strike the best deals.

Such data can sometimes bring surprises, says DaWane Wanek, executive vice president for global sales at Scalable Software. “Ask a CFO to identify the top two applications his department uses, and the answer will [most likely] be Excel and the company’s ERP software,” he says. “But 8 out of 10 times we find that it’s [actually] Internet Explorer and E-mail or instant messaging.”

In fact, at Russell Reynolds, Atkinson found that 40 percent of staff time was spent on Outlook, 22 percent on Word, and 21 percent on a customer relationship management tool. “Initially, I thought Survey had got it wrong,” he concedes. “I was surprised to find that 80 percent of our staff’s time was spent using the top three applications. I might have spent a year developing some back-end tool that we would have hardly used.” Scalable Software is betting that, at $45 per seat, companies will decide that Survey Technology Manager can provide a very quick ROI.

Given that software metering and similar IT asset-management technologies have been in the market for some time, Will Cappelli, research fellow at Giga Information Group, expects to see lots of competing products on the market soon. But at the moment, only Scalable’s Survey line measures usage of nearly all applications (including the Internet) at the keystroke/mouse click level.

Other tools that are designed to measure worker productivity or Web-surfing habits also look at keystrokes and mouse clicks, but Scalable’s Wanek says his product does not pose a privacy issue. “What differentiates our products from security software is that we don’t manage content–in other words, we don’t know what you’re writing in an E-mail,” he says. “Think of it this way: we’re Big Picture, not Big Brother.”

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