Hello, everybody, and welcome back to another SPK & Associates Vlog. My name is Michael Roberts. I’m the Vice President of Sales and Marketing here at SPK. So today, we’re going to talk about something that shows up on every engineering and IT budget and usually gets less attention than it really deserves, and that’s software licensing.
For most companies, the whole renewal process goes something like this. There’s a quote that’ll show up, someone checks the number to make sure it’s close to whatever was budgeted last year, and it gets signed. But the tools that your teams really depend on, like Atlassian, PTC, GitLab, or Microsoft, are changing how their licenses and their prices for their products work.
User-based licensing, you know, is becoming more and more frequent. Cloud subscriptions, bundles, enterprise agreements, they’re all options with a lot of these companies. So, Atlassian, for example, has just introduced usage-based pricing for things like Rovo AI and their automation.
And if you’re renewing the same way that you did maybe three years ago, there’s a good chance that you’re paying for things that you’re not using or missing out on better options that could really help your business wherever it’s headed.
So today, I want to cover three things in this video. We’re going to talk about where companies typically are overspending, what to evaluate before your next renewal in these areas, and how to get more value from your software over the long term, not just an immediate lower price for this renewal.
And I think I have the right person to help us do that here today. Sarah, please introduce yourself.
Hi, my name is Sarah Craft. I’m the Director of Finance for SPK & Associates. I’ve been with SPK for about 13 years, and besides finance, I’m also head of our Licensing and Contracts Department. So I’ve been dealing with licensing for Atlassian, PTC, Microsoft, and GitLab for probably about the last six or seven years.
I’ve definitely been in the trenches with all the changes, and my team has tried to stay up-to-date on everything as the landscape keeps evolving. But I think SPK has a really good understanding of everything with licensing. We have a wide range of customers, too, everything from small 10-user teams all the way up to enterprise users of 5,000. So we have a lot of experience, and I’d be happy to share what I can today.
Where Companies Typically Overspend on Software Licensing
Absolutely, and Sarah, since you and your team have that experience with all these software quotes and renewals, I’m going to rely on a lot of that experience.
So, first question: Many of the companies that we’re working with are assuming software licensing is just about renewing what they have already.
And so, from your experience, where do organizations typically overspend on platforms like Atlassian, so Jira, Confluence, all the Atlassian products; PTC, so like Creo, Windchill, Codebeamer, RV&S; GitLab; or Microsoft? And where do you think are some opportunities that they kind of overlook to reduce costs?
Yeah, I think one of the biggest problems companies make is that they treat software renewals as an admin task and not really a financial decision. And so, a lot of years, organizations renew the same licenses. They don’t really evaluate if they’re even using everything they’re paying for.
For example, with Atlassian, you might have a Marketplace app that you purchased for a particular project or a team, and then you forgot about it, and nobody’s really gone back to see whether or not those apps are still needed.
We also see something similar with Microsoft 365. Employees can have licenses that they don’t need anymore, or they may even have a more expensive edition than they need.
And I think one of the biggest problems is that companies tend to overlook timing. If you start looking at your licensing just right when you get your quote, you’ve already missed an opportunity to optimize your environment and also look into alternative licensing structures.
SPK has a lot of experience with different vendors, and so we may be able to suggest a different software product than what you’re currently using.
So, I always encourage companies to look at what they own, if they’re actually using it, and then what they’re going to need before they renew. So, I like to think sometimes the biggest savings is just from buying the right thing.
Evaluating Changing Licensing Models Before Your Next Renewal
Step one, look at what you own. Got it, got it.
Okay, second thing here, there’s a lot of change in these licensing models, and we’ve seen that over the last, you know, three or four years. They’re moving away from, or moving more towards, an AI consumption model, away from that user base.
And obviously, as there’s more SaaS products, it’s more cloud subscriptions, and large companies are looking for these enterprise agreements.
So, what should engineering and IT leaders that are kind of evaluating these pieces of software be evaluating before the next renewal to make sure that they’re buying the right thing and they’re actually aligned with where their business is headed?
Yeah, so like you mentioned, the licensing landscape is changing a lot. We’re seeing a lot more cloud subscriptions, bundled products, and really this usage-based pricing, which has become pretty universal across all our vendors.
And so I think that creates opportunities for companies to put more thought into what they’re purchasing.
So, like, an example of bundling is Atlassian’s Teamwork Collection. Some companies already using Jira and Confluence are very familiar with that, but they might benefit from evaluating the collection instead of just buying things piecemeal, especially if you’re interested in products like Loom, Rovo, and Guard.
Those are all products that customers need, and they don’t necessarily know that they need yet.
But I also want to say that bundling doesn’t automatically make it the best financial decision. So, you need to look at who needs access and also whether or not these extra capabilities will really provide value.
PTC is a good example of that. There’s solutions like Creo Plus and Windchill Plus. And so companies need to evaluate how their engineering teams are working and also which features they actually need.
And also, your requirements may change as you move towards more SaaS-based solutions.
Something that’s really important, and we always try to communicate to our customers, is you need to think beyond your current headcount.
Are you planning to grow? Are you consolidating some of your systems? Also, are you moving more workloads to the cloud with AI?
There’s so many opportunities to use agents and workflows, and so you really need to think about how your company’s going to grow.
And then when we talk to our customers, those answers really influence the licensing that they choose.
So our goal is to help customers find a model that supports their business without paying for those unnecessary licenses, and then also doesn’t lock you into something in the future that you don’t need.
A lot of these subscriptions are annual, and if you only need it for a couple months, we really help you evaluate what the best solution is.
Yeah, there’s a lot of options and triggers, and the more we know about how their businesses are going to operate, the more we can help them align to get the right value out of it.
Exactly.
Maximizing Software Investment Value Beyond Price Negotiations
Okay, so last question here, and I feel like this is a lot of the assumption of what we do. You know, we negotiate the best price.
So beyond just negotiating that best price with those vendors, how do we help clients maximize that value of their software investment over the long term?
Yeah, exactly. So, we’re not just reselling a license. We’re not just a vendor that gives you your license and then disappears.
We actually really understand how our clients use their tools. We’re in them every day. We’re helping them with managed services projects.
We offer managed services and consulting and implementations, and so we can really look at the bigger picture and see how you can integrate those licenses into your systems currently.
For example, a customer might come to us because their licenses are renewing, and, you know, we can help them evaluate their pricing and license options, but we can also look at their environment.
Are you using your tools effectively? Do you have any Marketplace apps that you’re not currently using? You thought you needed them, but there’s actually some functionality included in another product you already have.
And then, most importantly, are your teams working in a way that makes sense?
Sometimes you’re doing something that’s inefficient, and we can really help you optimize that.
And so, I think that’s where our consulting and technical teams really come in and really add value.
We can help you identify those opportunities and then actually implement those changes for you.
So, instead of saying, “This is what you need to change,” we can get in there, hands-on keyboard, and help you with all those things that really add value to your business.
The Value of Software Vendor Relationships and Ongoing Support
And then I think something that’s sometimes overlooked is we have relationships with these software vendors.
Instead of just purchasing directly from Atlassian, we have dedicated reps, we’re able to get tickets through quicker, and that’s something that really helps when you have a time crunch and something’s happened with your licensing and you need additional help.
And also, we stay on top of any changes, especially as licensing keeps changing every year, it seems.
We know about those changes and also the new offerings, and we can help communicate that to our customers.
So I think our goal really is to help our customers get the greatest possible return on your software investment.
And so, sometimes that’s reducing your licensing costs, but other times it means helping your teams become more productive and then also just making sure your systems are working well together.
So, it’s about total value, not just really the price on the renewal quote.
Yeah, I couldn’t have said it better. Total value, which, having dealt with a lot of government agencies over the years, I feel like most of them are still looking at, you know, what’s the bottom-line cost? Is it one penny less than the previous quote or whatever?
But real total value is the bigger picture at the end of the day, getting the most value possible for the least amount.
And yeah, great, great, very practical info, Sarah. Thank you very much. I appreciate your time.
Of course. All right, thank you.
Getting More Value From Your Next Software Renewal
So, if you look at what we’ve talked about today, we’re talking about, you know, renewal quotes and software.
Don’t just look at the renewal quote and look to see the dollar amount’s the same and sign it and drive on.
Ask whether there’s a bundle, a cloud subscription, or a different agreement that fits the way that you’re doing business.
And, like I said, the cheapest license isn’t always the best value.
The real return comes from how well you’re using those tools, how well they’re implemented, supported, and used, ultimately to make your product.
So, if you’d like a second set of eyes on your next renewal, whether that’s Atlassian, PTC, GitLab, Microsoft, you name it, reach out to the team at SPK.
Sarah and her team are awesome, and they can help you review what you have, what you’re looking for, and help you find the right fit before you sign again.
So thanks for watching. If you found this video helpful, subscribe to the SPK & Associates YouTube channel, where there’s more videos like this around engineering, IT, software, and more.
And we’ll see you next time.
