One of our customers, a global semiconductor company that designs and markets wireless telecommunications products and services, came to us with a unique problem. Like many companies, they have an expansive and expensive software portfolio.
Their Computer Aided Engineering (CAE) Group provides support for all of their Electrical Engineers in their worldwide offices. CAE has over 100 unique applications under license from over 50 different vendors and spends over $30 million in software leases annually.
Our customer uses software from Flexera to help track and maintain these licenses. Their problem was that with over 1,200 attributes and over 130 unique applications, it was becoming very difficult to determine if software licenses were being complied with. Compliance costs can be very high in the software arena.
In addition, our customer had the desire to maximize utilization of their licensed software – expensive software left under-utilized represents opportunity cost. Conversely holding too few licenses could put large scale chip design projects at risk.
Most engineering software vendors offer a “remix” option, where a licensee can change their mix of licensees at scheduled times as long as they do not exceed their total contract value. Our customer has traditionally done this manually, relying on the expertise of its staff, a very time consuming and expensive proposition. They wanted to implement an automated remix approach using mathematical optimization to generate more standardized decision making.
Our customer implemented Halo’s Software Management Package to complement its Flexera installation. Doing so allowed for better forecasting, trending and use of existing software licenses. Our technology allowed them to improve their monthly business unit statistics, speed the monthly remix process and improve on their annual budgeting process. Implementing Halo’s technology is saving our customer over $1.1 million annually just in intercompany transfers on software license costs. Our customer did not want to share the estimated savings on avoiding IP compliance charges from their software vendors. Based on the intercompany savings alone, their expected annual savings are over $1.1 million gave them a simple payback period of a very short time.
Software compliance is a subject no one really wants to talk about but it is very important to both the software licensee and the software licensor. Avoiding compliance costs while maximizing the value of the licensed software is something every company should be striving towards.