PHASE 1:
Getting started with cost cutting

Unearth the areas you can do without.

PHASE
ONE

Put simply, cost cutting is the process of physically eliminating costs from current IT spending. This might involve stopping spending completely, renegotiating with vendors, or rationalizing duplicate/similar spending into one.

When it comes to cutting software costs, there are several areas that are worth investigating, such as:

Stopping support and maintenance payments on unused, end-of-life, or retired software.
Identifying redundant applications then consolidating to a single vendor.
Highlighting “premium” products that could be exchanged for cheaper or free versions.

There can be a temptation with cost cutting to prioritize the low-hanging fruit like retiring niche products or canceling contracts with smaller vendors. While this approach has its place, it might not provide the scale of savings being sought.

Instead, we recommend focusing on your largest spending first and exhausting cost-cutting measures there.

COST CUTTING IN ACTION

A customer experience solutions provider, facing software management challenges with limited staff, sought SHI's ITAM expertise, leading to a comprehensive evaluation of their Microsoft software assets. By using tools like JDisc Discovery and 365 Insights for detailed inventory and analysis, SHI identified opportunities that resulted in significant cost savings. Through SHI's strategic advice on licensing and asset management, the partner realized over $1.5M in savings, especially in maintenance for Microsoft SQL Server and System Center, while ensuring efficient Microsoft 365 usage.

Explore three cost-cutting strategies you can implement today >>>

I. Evaluate options to eliminate software licenses and subscriptions

In a world where there is more shelfware than ever, accurately licensing your software according to actual usage is vital to controlling costs. In fact, through 2026, organizations are predicted to reduce costs more effectively through SAM and FinOps than by attempting to negotiate lower software and cloud unit costs. Armed with good SAM data that not only reports the existence of apps but also provides visibility of usage, you can start to identify where licenses and subscriptions can be retired.

For instance, if you have high staff turnover in your organization, significant cost savings can be achieved by proactively reclaiming leavers’ licenses and allocating them to new joiners.

RATIONALIZE YOUR APPLICATION PORTFOLIO

With remote work now mainstream and increased freedoms afforded to lines of business to self-select applications, application rationalization is vital.

This practice can result in significant cost savings by allowing the cancellation of redundant or duplicate app subscriptions. It also leads to indirect cost savings through reduced support overhead and increased employee productivity using common apps and tools. Rationalization may also involve transitioning from older, on-premises apps (ones that rely on expensive infrastructure) to more affordable cloud-based alternatives, but be careful: The opposite can also be true!

II. Scrutinize support contracts

All too often, support contract invoices are processed and paid with little or no scrutiny. It’s not even unusual to pay support and maintenance on software that’s no longer in use across the organization.

So, our third cost-cutting measure is to really check what support bills are being paid and whether they should be canceled outright or amended to reflect a lower level of usage than was originally intended. You might even consider whether the support contract has actively been used; if you’ve had a support agreement for many years yet never needed it, is the peace of mind worth the continued investment?

On this front, SHI’s Expert Support for Microsoft stands out as a comprehensive alternative to Microsoft’s own Unified Support. This is thanks to our customer-friendly pricing model, which is based on the number of hours used, unlike Unified's percentage of licensing agreement value.

In this landscape, you can also score immense value with our multivendor platform support (MVP) service. MVP provides solutions that surpass Microsoft’s support and improve on the typically criticized OEM support offerings (from a range of vendors, no less!).

Read on for one note of caution >>>

III. Beware of cutting too deep

While cost cutting should be a major facet of your overall cost management plans, be cautious of making cuts that limit your organization’s ability to innovate or alter direction quickly to meet changing market demands.

It’s important that you cut costs having first evaluated the risks and rewards.

A good software asset management partner can help you make the right decisions based on a thorough understanding of both software usage rights and your business needs.