Consumerization of IT Risks & Unbudgeted Costs

By John Lipsey

Enterprises that fail to take into account software license compliance risk when implementing enterprise app stores expose themselves to unexpected, unbudgeted software vendor audit penalties.  According to a new Flexera Software Application Usage Management Report prepared jointly with IDC, which surveyed more than 750 respondents from software ISVs, intelligent device manufacturers and end-user enterprises on all aspects of managing the software license lifecycle.  The report details the penetration of Consumerization of IT within organizations today, the benefits and hurdles encountered when implementing consumerized IT programs, and the unforeseen risks.

According to Amy Konary, Research Vice President – Software Licensing & Provisioning, IDC:
“Consumerization of IT is taking root because employees have become sophisticated, productive users of technology in their personal lives.  Companies want to tap that productivity by making technology in the workplace easier to access and use.  But many Consumerization of IT programs, like “Bring Your Own Device” (BYOD) and enterprise app stores can create unanticipated software license compliance risk and unbudgeted costs, which organizations must be aware of and plan for in order to avoid.”

Most Enterprises Adopting Consumerization of IT – Despite the Hurdles

According to the report, consumerization of IT has already had a deep impact within most organizations.  For instances, within the next two years 85% will have implemented a Mobile Device Management (MDM) solution.  68% will have implemented a BYOD policy.  65% will have implemented a Mobile Application Management (MAM) solution.  And 63% will have implemented a self-service, enterprise app store.

Looking at BYOD specifically, the report found that organizations are already experiencing significant benefits from Consumerization of IT.  For instance, of the survey respondents who have implemented a BYOD policy, 80% report higher employee satisfaction as a result.  Notwithstanding, respondents to the survey also noted challenges around implementing BYOD policies.   For instance more than a third, 35%, say software license tracking, management and optimization for mobile devices is a challenge.

Enterprises Failing to Anticipate Software License Risks

According to the report, the vast majority of respondents, 79%, are generally aware of software license management and are doing at least something proactive to manage the software estate.  In fact, 44% of respondents have proactively implemented a Software License Optimization solution to ensure continual software license compliance and reduce ongoing costs for software.

However, the vast majority of respondents are not extending that software license management preparedness to conditions they’ll encounter in a consumerized IT environment.  According to the report, more than half of organizations simply don’t have a plan to balance employee self-service via an enterprise app store, with software license compliance and optimization.  35% do not know how they’ll achieve that balance.  And almost a quarter of respondents – 24% — have no plans to do so.

One of the benefits of Consumerization of IT is that it gives employees much greater access to the applications they need to do their jobs.  But greater access to software means greater use and risk of inadvertently falling out of compliance – exposing the organization to unbudgeted software audit true up penalties.  Organizations need to be aware of these risks and avoid them by tightly integrating their enterprise app store with their Software License Optimization technology and processes.

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