U.S. Companies are Wasting Billions on Unused Software

U.S. companies are wasting a staggering $28 billion on software, according to an analysis of data over five years confidentially shared by 148 clients of global software firm 1E.

London-based 1E’s study defined a piece of software as “unused” if it hadn’t been run within the past 90 days and “rarely used” if it sat idle for 30 days.

Combining both definitions produced a total waste percentage of 38%, or the equivalent of $247 per software user or $7.4 million per business, the study found.

That’s a vast pool of potential savings for CEOs to tap as they struggle to maintain margins in the face of patchy economic growth and ongoing import competition from low-cost production hubs such as China.

“The inability of organizations to reduce average waste levels suggests they remain unaware of the underlying cost-saving opportunities.”

The program found to generate the most waste was TechSmith’s Camtasia Studio, which is used to create tutorial videos and presentations. Here’s the top ten by waste percentage:

1. TechSmith Camtasia Studios (67%)
2. SAP Crystal Reports (63%)
3. Adobe InDesign (55%)
3. Adobe Dreamweaver (55%)
5. Microsoft Visio (47%
6. Adobe Illustrator (47%)
7. Microsoft Project Professional (46%)
8. Adobe Photoshop (42%)
9. Helios TextPad (40%)
10. Corel WinZip (34%)

“There is huge evidence of software waste across industries,” report co-author Buffi Neal said. “The inability of organizations to reduce average waste levels suggests they remain unaware of the underlying cost-saving opportunities.”

The aviation and education sectors experienced the most waste, at 47% each, while the pharmaceutical and insurance industries used software the most efficiently.

To address the problem, IE says it’s a simple matter of reducing the volume of new licence purchases. Even a conservative reclamation rate of 75%, for instance, could help save more than $182 per user, it estimated.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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