As SaaS applications continue to rise in popularity, businesses are allocating more funds toward software license management for smooth operations. Yet, without effective oversight, they risk resource misallocation on licenses that are either underutilized or entirely unnecessary.
Failing to manage software licenses properly can lead to considerable financial drawbacks. Streamlined SaaS license management introduces automation into the process, resulting in cost reductions and improved oversight of software deployment across the organization.
In this article, we’ll learn why adopting best practices in the license management system is essential. Also, we will explore how software license management can elevate your SaaS license management strategy to be impactful.
Software Licensing – The Concept
SaaS licensing is an agreement between a software provider and the end user, which grants the right to use the software in return for a monthly payment.
Imagine it like leasing an apartment. As long as the rent is paid every month, you can keep living there.
This agreement typically outlines the number of users, devices, and how long the software can be used. Based on the pricing structure, licenses via any license management tool may be acquired either via a one-time payment or through ongoing subscriptions.
Types of SaaS Software Licenses
It’s crucial for organizations to understand the different licensing models that come with their software use for efficient software license management.
Organizations can cut down unnecessary costs by installing a SaaS license tracking software across the company.
Here are some of the most prevalent software license types:
- Subscription: Grants access on a monthly, quarterly, or annual basis for a fee.
- Perpetual: One-time payment for license that allows unlimited software use.
- Concurrent User: Permits a set number of people to access the same license at once.
- Named-User or Per-Seat: Limits access to a single user, with the option to transfer to another user.
- Per Device: Software is installed on a single device and can be accessed by multiple users.
- Network: Gives access to all users within a specific network.
- Metered or Consumption-Based: Users pay upfront based on expected usage or receive invoices according to actual usage.
Read the detailed Blog on What Is Software License Management here
Why Is Implementing Software License Management Best Practices Important?
Effectively managing software licenses is critical for IT operations, ensuring your SaaS purchases are compliant and managed properly.
Here’s why it’s crucial to stick to software license management best practices:
- Ensuring Compliance: The Business Software Alliance (BSA) keeps an eye on software license compliance. Vendors may fine your company for overuse of licenses beyond the agreed limit.
- Increasing ROI: A comprehensive SLM system gives a clear view of license usage across your team, supporting smarter decisions and budget optimization.
- Avoiding SaaS Waste: Redundant SaaS applications and idle app licenses can lead to unnecessary expenses. A robust software asset management offers better visibility into your SaaS licenses and subscriptions, simplifying the process of reducing waste costs.
A solid license management system helps mitigate this risk, ensuring your company adheres to licensing terms and avoids breaching contracts.
Top SaaS Software License Management Best Practices
SaaS license management for any software can get complicated, especially when businesses juggle various SaaS tools.
Without an effective strategy, overspending on licenses is a risk that you don’t need to avoid, and that can lead to hefty fines.
To prevent this, following the best practices for software license management ensures investments aren’t wasted.
i. Gain Visibility and Centralize SaaS Licenses
Most businesses run multiple SaaS applications, but often lack centralized visibility. Many still rely on spreadsheets for tracking software licenses, which isn’t practical.
For efficient software asset management, companies need to have a consolidated view of all applications and licenses.
Centralizing them offers a comprehensive overview of purchased licenses and quantities, making it easier for IT teams to provision users, analyze usage, and maintain effective tracking.
ii. Continuously Monitor License Usage
It’s essential to track license usage to avoid overspending on SaaS tools. This monitoring reveals if the licenses are being utilized efficiently.
App usage tracking offers insights into user behavior, highlighting apps that are rarely or never used. This data helps businesses reallocate or remove licenses based on actual needs, reducing costs.
iii. Automate Provisioning and Deprovisioning
Automating license provisioning and deprovisioning ensures licenses are managed well throughout the user lifecycle. When an employee joins, the system automatically grants access to essential software, expediting onboarding.
Similarly, when an employee exits, access is swiftly revoked, preventing extra licensing costs. This reduces human errors and ensures companies only pay for active licenses, resulting in notable savings and better license usage control.
iv. Right-Size Your Licenses
Right-sizing licenses involves ensuring that employees only have access to software plans they truly need. Many companies overpay for premium plans with features that go unused.
Regular reviews of employees’ software needs and downgrading unnecessary premium plans to more affordable ones can drive significant savings. This approach helps businesses control spending and avoid paying for unused features.
v. Leverage SaaS License Management Software
Manual tracking of licenses through spreadsheets is labor-intensive. Dedicated SaaS license management software streamlines the process by offering insights into purchased licenses, usage patterns, and renewals, helping reduce SaaS costs.
These tools also boost compliance, reduce SaaS waste, and make it easy to reassign licenses to those who need them.
vi. Set Renewal Reminders and Automate Workflows
Managing renewals is vital to prevent paying for unused software or missing cost-saving opportunities. Automatic renewal alerts ensure you never miss a renewal deadline, giving you time to review contracts and negotiate better terms.
Automating renewal workflows also simplifies the process by reducing manual tasks. Notifications for contract reviews and negotiations are triggered automatically, allowing your team to act on time and save money.
vii. Perform Routine Compliance Audits
Frequent software audits help identify which licenses are in use and which aren’t. These audits reveal cost-saving opportunities and ensure compliance with license terms. They also help spot any unauthorized software, reducing security risks for the organization.
Benefits of an Effective SaaS License Management System
a. Cost Savings:
Many organizations buy software licenses in bulk without evaluating their actual needs. This often results in licenses sitting idle and wasting money.
By effective SaaS license management, companies can gain full visibility of license usage and eliminate those that are underutilized. This ensures that spending only goes toward licenses that are actively used, leading to substantial cost savings.
b. Improved Security and Compliance:
Implementing a robust SaaS license management system helps ensure that your organization adheres to licensing agreements and meets compliance requirements.
It also minimizes security threats by monitoring license counts, users, and devices that access your software, thus reducing the risk of unauthorized access or potential data breaches.
c. Enhanced Productivity:
A well-managed SaaS license environment allows businesses to stay focused on their primary objectives rather than getting bogged down by license issues.
The system automates license tracking, sends notifications when usage is low, and helps IT teams shift licenses to where they’re most needed. This enables staff to work more efficiently and focus on their main tasks.
d. Optimize ROI from SaaS Investments:
Businesses strive to extract maximum value from their SaaS applications. With proper SaaS license management, they can avoid wasteful spending, make sure every license is used properly, and ensure the team leverages the tools to their full potential.
Why License Manager for WooCommerce is an Ideal License Management Software?
License Manager for WooCommerce stands out as the most complete and reliable tool for managing digital product licenses. Whether you’re selling software, plugins, or digital keys, it offers seamless integration with WooCommerce, automatic license key delivery, and powerful REST API support.
The interface of this license tracking software makes managing licenses simple, while advanced features like expiration handling, license validation, and bulk key uploads ensure everything runs smoothly.
Designed for developers and store owners alike, it brings both flexibility and control to your licensing workflow.
Ending Note
Activating the best practices process for software license management is crucial for businesses that want to maximize the value of their SaaS license investments. By implementing the SaaS license management best practices shared here, organizations can optimize their license management processes. Tools like License Manager for WooCommerce help businesses get the most return on their license purchases.
