Most businesses in the UK are over-spending on software licenses, because they do not keep accurate records of the software they have deployed, according to software asset management firm License Dashboard.

Under most software license agreements, organisations are obliged to keep and maintain a record of every purchase and upgrade they carry out. However, large organisations often lose track of this process, and while they understand the risks of using software that is unlicensed, many struggle to work out which licenses need renewing.

According to Sean Robinson, managing director at License Dashboard, this usually leads to organisations wasting large amounts of money on licenses that they do not need.

“Being over licensed is a form of non-compliance because, although you're not legally at risk, you are financially exposed,” said Robinson. “So it regularly happens that large organisations are internally audited and red flags are put against not only exposure against non-compliance but also excessive spend.”

Robinson said this is largely a fault of the software vendors, for having such complex licence programmes. In the case of Microsoft Access 2010, for example, there are more than 24 ways in which an organisation can buy the product. However, the scale of Microsoft's business means that the complexity of software licensing will probably never go away.

Resellers also have some responsibility to make sure that they buy the right licenses for their customers, said Robinson. “Then again, if the customer doesn't know what they really need, it is very difficult for the reseller to make an informed decision on their behalf.”

It is therefore up to the end user to start keeping records that can help them keep track of what they have deployed.

“Gartner says 60 percent of a customer's portfolio is usually over-licensed,” said Robinson. “We believe that through effective management of that process you can save up to 30-40 percent of your software spend each year, which is a significant amount of money.”

License Dashboard offers an asset management tool to help organisations keep track of what they have deployed, what they have acquired and maintain a compliance position. By automatically scanning a company's software estate and identifying updates and new installations, it can enable that organisation understand its liability and re-harvest licenses where possible.

The Licence Dashboard costs £19,000, but Robinson claims that one of its customers managed to save £1 million in its first week of deploying the tool. The company was about to renew its enterprise agreement with Microsoft, but discovered that the entitlement it had was far more than  it needed, so it didn't have to refresh its desktops for another three years.

“There's a shared responsibility here. The vendor should try and make their license programmes as easy to use as possible, the resellers need to be more transparent and help the customers more effectively, and the end user needs to keep records,” said Robinson.

“If the end user did a bit more due diligence and took a bit more time to make sure that they understood those contracts, I think a lot of the problems would go away.”