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Stretching the Software Budget:A Practical Guide to Enterprise License Optimization

Flexera Software: FlexNet Manager Suite White Paper Series2

Stretching the Software Budget:A Pract ical Guide to Enterprise License Optimization

Executive SummarySoftware is of tremendous importance to today’s IT-intensive organizations. In fact, the appetite of organizations for software is growing at a faster pace than software budgets—especially in light of current economic condit ions. It is therefore more crit ical than ever for software buyers to get maximum value out of every dollar they spend on software.

To successfully stretch their budgets, software buyers have to:

•Eliminate spending on unnecessary “shelfware” licenses and maintenance fees

•Mitigate the risk of under-licensing and negative audit outcomes

•Allocate software ent it lements where they provide the most value

•Unify purchases and contracts across the enterprise •Accurately forecast and plan future spending •Conduct smarter, fact-based negotiations with software vendors

These budget-stretching best pract ices are known collect ively as Enterprise License Optimization (ELO). ELO advances the maturity of exist ing Software Asset Management operat ions bybringingmoreinsightandrigorousfinancialdisciplinetosoftware acquisit ion and ownership. By implementing ELO best pract ices, organizations of all kinds can achieve substant ial cost savings while great ly improving their ability to use software to achieve their strategic object ives.

Unfortunately, most organizations lack three things necessary to do ELO:

1. ELO tools that provide visibility into how high-value applicat ions are being used across the enterprise—and how that usage compares to complex software ent it lements

2. ELO subject-matter expert ise necessary to make the best possible decisions about spending, contract negot iat ion, and the allocat ion of ent it lements based on the informat ion provided by ELO tools

3.ELOstaffthatcanperformrequiredtasksinanefficientand t imely manner

IT departments therefore need a partner capable of providing thetools,expert ise,andhumanresourcesnecessarytofillthe“ELO gap.”

Flexera Software is such a partner. By providing a complete turnkey solut ion—including advanced ELO tools, proven ELO expert ise, and rapidly deployable ELO teams—Flexera Software enables organizat ions to quickly and painlessly pinpoint over-spending, mit igate compliance risks, opt imally allocate exist ing ent it lements, improve budget planning, and negot iate much more effect ively. As a result, Flexera Software customers consistent ly achieve substant ial cost savings and reapsignificant lygreatervaluefromtheirsoftwarespending.

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ELO advances the maturity of exist ing Software Asset Management operat ions

Organizations can get much greater business value from their software budgets by eliminating waste, more intelligent ly allocat ing ent it lements, and negotiat ing more effect ively with vendors. These Enterprise License Optimization (ELO) strategies pay part icularly big dividends when applied to high-value applicat ions. This white paper explains how ELO works—and offers pract ical advice about how to implement ELO in the real world.

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

3Flexera Software: FlexNet Manager Suite White Paper Series

Stretching the Enterprise Software BudgetSoftware is a major business expense, typically represent ing more than 30% of total IT budgets in North American businesses.1 Software also cont inues to become more and more crit ical to the business. High-value applicat ions in part icular—such as those offered by Microsoft, Oracle, IBM, and SAP—are a primary means by which IT departments enable the business to execute core processes more quickly, easily, and accurately.

Current economic condit ions, however, put severe constraints on software budgets. Gartner, for example, recent ly revised its project ions for annual worldwide enterprise software spending downward by $8.8 billion.2

So, to ensure that an organizat ion can successfully compete in today’s technology-dependent marketplace, software buyers must squeeze the greatest possible business value out of every dollar they spend. A good place to start is among vendors where the majority of spending occurs.

2008 2009** 2008-2009 % change

Microsoft* $44.55 $42.19 -5%

Oracle $23.53 $22.90 -3%

IBM $22.07 $21.69 -2%

SAP $16.91 $15.36 -9%

EMC $6.21 $6.11 -2%

* Forrester forecast** Excludes revenues from sales to consumers

Largest Software Vendors by Sales to Business and Government (US$ billions)3

Several market factors make it part icularly important for organizationstoapplymorerigorousfinancialdisciplinetotheirsoftware spending:

Greater disparity between demand growth and budget growth. As noted above, economic condit ions are severely limit ing software budgets at the same t ime as organizations are becoming increasingly technology-dependent. Buyers must therefore meet escalat ing demand for software without increasing their budgets proport ionally.

Rising licensing costs and maintenance fees. In the face of t ightening markets, software vendors are raising prices to extract more revenue from exist ing customers. SAP, for example made its customers move to a premium support service that costs 22% of their base licensing fee—compared with the previous standard service, which cost 17%. Oracle, for its part, increased the cost of certain options for its database by as much as 40 percent. And processor licenses for its diagnost ic and tuning packs went from $3,500 in 2008 to $5,000 in 2009.

More vendor audits. Tight markets have led vendors to become more aggressive about audit ing customers. Gartner indicates that more than 50% of their clients have been audited by at least one software vendor in the past 12 months, up from 30% to 35% from previous years.4 These audits raise the risk of finesandcandisruptoperat ionsassoftwaredeploymentsarethoroughly inventoried and compared to purchasing records.

More complex licensing models. In their pursuit of more revenue, vendors are implementing more complex usage and subscript ion-basedpricingmodels—anddefiningmorecomplexcontract terms and condit ions. They are also bundling funct ional modules in different ways to incent IT departments to buy more software licenses. This complexity presents software buyers with new challenges when it comes to negotiat ing contracts, allocat ing budget resources, and project ing future requirements.

The growth of virtualizat ion and cloud computing. By creat ing more instances of servers, virtualizat ion also creates more instances of applicat ions and databases. This “virtual sprawl” creates the potent ial for non-compliance and much higher licensing costs.

A persistent shelfware problem. When budgets were less constrained, many companies got into the habit of buying more licenses and support contracts than necessary because they lacked the tools to accurately determine user demand. These habits have led to millions of dollars in unnecessary spending on shelfware licenses and maintenance that are no longer tolerable. As a recent research report from Gartner explains:

No enterprise has escaped the scourge of shelfware, but few are aware of the scale of the problem and the significant amount of budget waste attributable to it. IT budget is too precious to fritter it away on solut ions that do not deliver appropriate value.5

Responsiveness to organizat ional change. As businesses respond to changing market condit ions through mergers, acquisit ions, and divest itures, they have to restructure their software ent it lements accordingly. If they don’t, they can easily wind up over-spending on redundant licenses or lapsing into non-compliance with exist ing contracts.

The bottom line is that software buyers have to be savvier than they have ever been before. The pract ices and policies of the pastsimplywon’tsufficeinamarketenvironmentwherecost,complexity, and risk cont inue to escalate.

1 IDC, 2008, 2 Forecast: Enterprise Software Markets Poised for Recovery in 2010, Gartner, 20093 Global and US Software Market 2009-2010, Forrester Research, Inc., July 20094 Polls and Surveys Show an Increase in Software License Audits, Gartner, 20095 Shelfware Is Stealing Your Budget: Spot It and Stop It, Gartner, May 15, 2009

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

Flexera Software: FlexNet Manager Suite White Paper Series4

ELO: The Savvy Software Buyer’s ResponseSavvy software buyers are responding to the new challenges they are facing by enhancing their Software Asset Management (SAM) programs with Enterprise License Optimization (ELO) capabilit ies.

The maturity of SAM programs varies widely among organizations. Often, such programs are focused primarily on making sure that the number of software licenses purchased matches the number of copies installed in order to ensure compliance.

But mere avoidance of non-compliance does not prevent overspending, nor does it help ensure that software budget dollars are allocated where they will provide the most value to the organization. To achieve these object ives, software buyersmustbeabletoanswermoredifficultquest ionssuchas “What separately licensed components of the software are being used?”and “How can we structure a licensing deal so that we get all the funct ionality we really need—and don’t pay for funct ionality that we don’t really need?”

Toanswerthesequest ions—especiallyforcost lyback-officeapplicat ion suites such as SAP and Oracle, which have complex ent it lements and usage characterist ics—IT departments and procurement teams have to enhance their SAM operat ions with ELO best pract ices. Several key characterist ics dist inguish mature, ELO-capable SAM programs:

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1. The ability to capture relevant usage data from high-value applicat ions. Exist ing SAM programs may be able to detect the installat ion of basic desktop software, but they are typically unable to provide full insight into the usage of the variouscomponentsofback-officeapplicat ionsthatmaybeitemized in a complex vendor contract. ELO, on the other hand, requires the ability to easily extract more sophist icated usage data—including such subt let ies as indirect access—without subject ing software managers to “information overload.”

2. The ability to accurately understand complex license agreements. Contracts for high-value applicat ions often specify ent it lements for many diverse software components. A vendor like SAP may also specify mult iple types of named users in its licensing model.

In addit ion, organizations may have mult iple contracts for mult iple departments or business units. ELO requires the ability to understand both the letter and the intent of these complex agreements.

3. The ability to map usage to complex license agreements. To optimally structure a licensing agreement with SAP, a software buyer needs a precise understanding of each user’s role and behavior. In the case of Oracle, a software buyer may have to carefully consider the comparative advantages and disadvantages of a processor-based license vs. a named user license. ELO provides this essent ial insight. Conventional SAM does not.

4. The ability to perform trend analysis for usage of software components across the enterprise. To pinpoint potent ial savings, IT departments need to be able to track usage trends for software components across the enterprise. For example, they may need to be able to see that usage of an especially expensive component of a high-value applicat ion is declining in one area of the business while it is increasing in another area. The ability to perform this type of analysis different iates mature, ELO-capable SAM from less mature programs.

From this perspect ive, ELO enablement can be viewed as significantenhancementtoconvent ionalSAM—sinceitbringsanewlevelofinsightandfinancialdisciplinetotheownershipofbusiness software.

A leading global consumer products company lacked clear visibility into its usage and compliance posit ion relat ive to Oracle and SAP. By implementing ELO best pract ices, the company was able to reduce its spending on Oracle alone by $3.3 million over three years by moving to a named user license model and buying applicat ion-specific licenses for the Oracle databases support ing its SAP implementat ion.

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

5Flexera Software: FlexNet Manager Suite White Paper Series

ELO Benefits Softwarebuyersreapavarietyofhighlycompellingbenefitswhen they enhance their exist ing SAM programs with ELO. Thesebenefitsbecomeevenmorecompellingasthedemandforsoftware across the organization cont inues to outpace software budgets—and as the consequences of inadequate software governance, such as over-spending and non-compliance, become less tolerable.

As IT departments and procurement teams gain ELO capabilit ies, they are able to:

Eliminate unnecessary licenses and maintenance feesBy providing precise insight into which software ent it lements are being used and which ones are not, ELO helps software buyers quickly pinpoint and eliminate unnecessary spending. ELO is especially useful for moving away from expensive enterprise license agreements—which many organizations bought into as awayofavoidingthedifficult iesoftrackingusage,negotiat ingcontracts based on that usage, and then monitoring ongoing compliance with the result ing agreement. ELO overcomes these difficult iessothatorganizationscanavoidenterpriselicenseswherevertheyarenotcost-efficient.

Mitigate the risk of under-licensing and negative audit outcomesConventional SAM implementat ions typically only track inventories of installed t it les on desktops and, in some cases and in some rudimentary ways, on servers. This basic inventorying isnotsufficientformaintainingcompliancewiththecomplexlicensing agreements and usage models that characterize high-valuebackofficeapplicat ions.ELOextendsvisibilityintothese more complex applicat ions to address these potent ially significantcomplianceexposures.

Allocate exist ing software ent it lements where they provide the most valueWhen budgets are limited, it is essent ial to allocate software ent it lements where they can provide the most value. An organization that can only afford to buy 40 administrator-level licenses for a given software t it le, for example, has to make sure that those license are allocated to the top 40 users of that software—instead of wast ing them on users who only need occasional access to administrator-level ent it lements. ELO provides the kind of granular usage report ing that is essent ial for this kind of decision-making.

Unify purchases and contracts across the enterpriseAllkindsofinefficienciesarisewhenorganizationsacquireandmanage software ent it lements in a fragmented manner. One department may not have enough licenses, while another has more than it needs. Licenses on mult iple individual processors may each be under-ut ilized, even though it would be more efficienttoconsolidatesomeofthoseinstancesonasinglemult i-processor machine. ELO helps eliminate these common inefficienciesbyprovidinganenterprise-wideviewoflicenses,contracts, deployments, and usage—along with report ing that highlights opportunit ies for budget-stretching re-allocat ions and consolidat ions. ELO reports can also be used to structure chargebacks, so that costs can be fairly distributed as software resourcesaremoreflexiblysharedbetweendifferentgroups.

Accurately forecast and plan future spendingITdepartmentsthatunderest imatetheirlicensingneedscanfindthemselvesunabletofulfillkeybusinessrequirementsinat imelymanner. If they overest imate their needs, on the other hand, they may wind up unnecessarily withholding funding from some other worthwhile IT project. ELO report ing provides software decision-makers with the trending data they need to align budget project ions as closely as possible with future business demand, so they can avoid either over-funding and/or under-funding crit ical IT init iat ives.

Conduct smarter, fact-based negot iat ions with software vendors Negotiators who don’t know exact ly what their companies need and don’t need can’t press for the concessions that will bemostfinanciallyadvantageous—ormakeconcessionsthatwill have litt le bottom-line impact. The insight that ELO provides can thus be extremely valuable when it comes to negotiat ions with software vendors. Using this insight, negotiators can press for deal structures that align well with their actual usage requirements. They can also gain leverage by bringing the full potent ial sales revenue represented by the ent ire organization to the table, rather than negotiat ing mult iple small contracts for each business unit.

ELOcanprovidemanyotherbusinessbenefitsaswell.Itcan,forexample,helppreventthedisrupt ive“firedrills”thattypicallytake place when a major vendor audit looms—since the data necessary to respond to such an audit is collected on an ongoing basis. By providing granular visibility into the usage of high-value software across the organization, ELO also makes it easier to calculate chargebacks—and to make sure that those chargebacks are fair. These chargebacks can improve P&L accounting and help secure addit ional IT funding from business units as appropriate.

Thesebenefitsmaketheimplementat ionofELOaveryworthwhile undertaking for any organization that spends a significantamountofmoneyonhigh-valuesoftware.WithELO,organizations can make much better use of limited software budgetsandfreeupfinancialresourcesforotherstrategicbusiness requirements.

After discovering discrepancies in an audit of its SAP licensing during a manual audit, a $4 billion mechanical contract ing company decided to implement mature ELO pract ices. As a result, the company was eventually able to avoid purchasing 2,872 SAP licenses for a total savings of $4.3 million.

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

Flexera Software: FlexNet Manager Suite White Paper Series6

6 The Finance, Procurement and IT Connect ion Is a Three-Way Street, Gartner, 2008

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The ELO Gap: Tools, Expert ise, and Human BandwidthDespitethefactthatorganizationscansubstant iallybenefitfrom ELO, a relat ively small percentage are actually doing it. Considering how attract ive a 15%-25% reduct ion in high-value software costs would be to any organization, it is natural to ask why this is the case.

Maturity of SAM Programs

Even the most cursory review of the typical enterprise reveals three factors that prevent the further maturat ion of SAM programsrequiredtoreapthefullbenefitsofELO:

The tools gapMost organizations have acquired SAM tools in order to inventory desktop applicat ions, administer support agreements, and perform other core software asset management tasks. These conventionalSAMtools,however,areinsufficientforELO.TodoELO, software buyers need tools that can:

•Discoverthevariousmodulesandcomponentsofhigh-valuesoftware suites

•Trackusageofthosemodulesandcomponents •Correlatesoftwareinstancestoserverconfigurat ions(suchas

number of processors and number of processor cores) •Maintaininformationonallvendoragreements,regardless

of their structure or complexity •Providethereport ingandanalyt icsnecessarytopinpoint

opportunit ies for savings, consolidat ion, and re-allocat ion—as well as any potent ial compliance issues.

Gathering this information manually is not an option. For one thing, manual processes are too error-prone and t ime-consuming. For another, manual inventories are not likely to be performed in a consistent manner by technicians working in ent irely different areas of the enterprise. This further compromises any result ing data. An automated ELO toolkit is therefore essent ial for reaping thebenefitsofELObestpract ices.

The expert ise gapELO is a unique discipline that falls between mult iple domains of expert ise. On the technical level, it requires applicat ion and database administrators who understand how complex, high-value software is architected—including the components of that software, the funct ionality those components provide, and how that funct ionality is used on a day-to-day basis.

On the management level, ELO touches IT, procurement, and finance.AsarecentresearchreportfromGartnerexplains:

IT can’t operate without budget informat ion from finance. Procurement needs accurate data that reflects the installed asset base and how those assets are being used. Finance also needs accurate inventory informat ion, with regard to future technology requirements, to set realist ic financial goals and budgets. Without this informat ion sharing, procurements may be less than opt imal.6

The report adds that “Siloed behavior of the groups will create potent ial process gaps within each group and among them.” Finance managers focus on determining which spending is truly necessary and which is not. Procurement managers focus on figuringoutthebestwaytostructureadeal.ITmanagersfocuson making the best use of whatever software assets they have. Thesedifferencescanmakeitdifficulttocollaboratetotheextentthat is required for effect ive ELO.

Also, the personal experience of these process part icipants is typically limited to the few companies where they have worked. This limited range of experience limits their expert ise in key ELO issues—such as the allocat ion problems commonly found in enterprise environments or the idiosyncrasies of certain vendors’ negotiat ing tact ics.

The human bandwidth gapTime may be the scarcest resource of all for today’s organizations. IT staffs, for example, are being pushed to their limits as they try to deliver more services, prevent downtime, and fend off cyber-threats. Few IT departments therefore have t ime to evaluate ELO tools, learn how to use whichever tool they choose, andthenmanagecommunicat ionswithfinanceandprocurementso that the data generated by that tool can be properly used to fully opt imize software licensing and maintenance budgets.

Finance and procurement managers don’t have much t ime to spare, either. They are unlikely to invest much t ime in learning the complexit ies of high-value software or the historical negotiat ing patterns of mult iple enterprise software vendors. Nor are they likely to pore over detailed ELO reports in the hopes of findingcostsavingsthatwillmakeitworththeirwhiletodoso.

It stands to reason, then, that most companies need an ELO partner who can provide them with the right tools, expert ise, and out-tasking services on an on-demand basis. To obtain the benefitsofELOwithoutdivert inglimitedresourcesfromothercrit icaltasks,thesecompanieswillneedtooffloadtheburdensof both their init ial ELO ramp-up and their ongoing ELO processes.

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

7Flexera Software: FlexNet Manager Suite White Paper Series

Flexera Software’s Turnkey Solut ionTo help companies overcome the ELO gap, Flexera Software has developed a full-service solut ion that delivers the tools, expert ise,andservicestheyneedtoreapthebusinessbenefitsof true enterprise license optimization.

The technology foundation for Flexera Software’s ELO solut ion is FlexNet Manager Suite for Enterprises™, which collects detailed license usage data for enterprise software from vendors such as SAP and Oracle—as well as the nearly 20,000 high-value applicat ions licensed with Flexera Software’s FlexNet® Publisher technology.FlexNetManagerSuiteforEnterprisesunifiesthe data required to analyze usage trends by business unit, geography, and other parameters across the organization.

Flexera Software’s solut ion also enables companies to leverage the expert ise and experience gained from over 20 years of specializat ion in software licensing. With their unmatched wealth of knowledge, Flexera Software professionals can quickly and effect ively analyze license usage data from even the largest companies in order to discover shelfware, assess compliance risks, and make intelligent recommendations for license re-allocat ion and improved procurement.

Using this technology and expert ise, Flexera Software provides complete ELO lifecycle services that help companies to rapidly achieve their ELO object ives without divert ing internal resources that are needed for other crit ical tasks. This ELO lifecycle is comprised of four phases:

1. Assess Flexera Software guides the implementat ion of FlexNet Manager Suite so that usage data from across the enterprise can be accurately correlated to current licensing agreements. Flexera Software also creates usage project ions based on the gathered data to determine where current licensing may become inadequate in the near term.

2. Recommend Leveraging its unmatched expert ise in vendors’ licensing rules, policies, business pract ices and negotiat ion strategies,FlexeraSoftwareprovidesspecific,unbiasedrecommendations for optimizing license and maintenance spends. These recommendations take into account technical requirements, current contractual obligat ions, corporate policies, and other relevant factors. Flexera Software also quantifiespotent ialcostsavingsandmayprovidemult iplealternat ive approaches as appropriate.

3. Optimize Once a consensus has been reached on which recommendations to pursue, Flexera Software supports their implementat ion. This may include reviewing license re-allocat ion, providing counsel during act ive negotiat ions with vendors, and/or helping to establish new business processesthatengageIT,procurementandfinance.Theseprocess improvements augment immediate cost savings with sustainable ELO best pract ices.

4. Manage Flexera Software can cont inue to perform ongoing ELO act ivit ies over t ime on an out-tasked basis. These act ivit ies include the ongoing monitoring of changes in applicat ion usageandtheident ificat ionofpotent ialcomplianceissues,as well as more intensive short-term act ivit ies associated with preparat ion for contract renewals and audits. By providing out-tasked services, Flexera Software can cost-effect ively keep ELO processes on track while enabling organizations to avoid new hiring and training burdens.

FlexeraSoftware’sflexibleengagementtermsalloworganizations to adopt whatever model best meets their needs. They can engage Flexera Software for all four lifecycle phases orjustthefirstthree.Theycanopttoengageforallfouronatemporary basis, while pursuing transfer of expert ise in order to take on ongoing ELO processes internally in the future. They can also opt to acquire and implement FlexNet Manager Suite with only minimal logist ical support from Flexera Software.

Whatever engagement model they choose, organizations that workwithFlexeraSoftwarecanquicklyfilltheirELOgap.Anycurrent lack of tools, expert ise, and/or human bandwidth can beovercometoreapthefullbenefitsofprovenELO best pract ices.

When a mult i-nat ional chemical manufacturer went into its first contract negot iat ion with SAP, its IT and procurement teams did not know exact ly what types of licenses its users would need for their diverse roles and responsibilit ies. Using ELO, the company pinpointed users who didn’t actually need licenses—as well as those who could be downgraded to less expensive licenses. This allowed the company to purchase 30% fewer total licenses than it had originally est imated.

Stretching t he Software Budget: A Pract ical Guide to Enterprise License Opt imizat ion

Flexera Software: FlexNet Manager Suite White Paper Series8

An Optimized Path to OptimizationThebenefitsofELOarewell-documented.Theyincludesubstant ial cost reduct ions, reduced compliance risk, better allocat ion of software assets, consolidated software agreements, more accurate budget planning, and more effect ive negotiat ion with primary IT vendors.

A working relat ionship with Flexera Software great ly enhances the outcome of any ELO init iat ive by providing the following addit ionalbenefits:

Faster t ime-to-benefit. Few organizations can afford to invest t ime and money in an ELO init iat ive without seeing some concrete, near-term results. Flexera Software’s expert ise and experience help companies avoid project delays and pit falls so that the benefitsofELOarerealizedsooner,ratherthanlater.

Higher ROI. By taking advantage of Flexera Software’s sophist icated ELO technology and unmatched knowledge about software licensing, companies can uncover opportunit ies for more cost savings and can negotiate even more effect ively with software vendors. The result is greater long-term total returns on their ELO investments.

Reduced project risk. Any IT init iat ive has its share of risks—including project delays, cost over-runs, and inadequate results. A partnership with Flexera Software helps neutralize these risk factors by leveraging the lessons learned from a broad range of ELO implementat ions.

Greater industry credibility. With more than 20 years of experience delivering market-leading solut ions such as InstallShield and FlexNet, Flexera Software is well-known throughout the industry as a pioneer in software licensing and management. Because of this, companies that partner with FlexeraSoftwarewillhaveasignificantcredibilityadvantagewith vendors when it comes to audits and negotiat ions.

Minimized disrupt ion of exist ing operat ions. With internal resources already stretched thin, few organizations can afford even a short-term diversion of too many internal resources for an ELO launch. Flexera Software helps minimize such disrupt ions byallowingmuchoftheinit ial“heavylift ing”tobeoffloaded—and by keeping ELO projects focused on the most lucrat ive opportunit ies for cost savings.

Easing of potent ial polit ical conflicts. Anyone who has been involved in an organization of any size knows the potent ial polit ical pit falls that can results when an init iat ive requires collaborat ion across departmental lines. The object ivity and impart ial authority that a third party like Flexera Software brings to the table can help prevent these territorial issues from undermining the progress of an ELO init iat ive.

Greater long-term adaptability. While ELO represents an important step in the ongoing evolut ion of SAM, it is certainly notthefinalstep.Organizationsthatplanoncont inuingtoevolve their SAM processes in response to constant ly changing business condit ions need a partner with a proven ability to respond to the radical changes that have taken place in the industry over the past quarter-century.

High-value software is likely to become even more crit ical to organizational performance in the coming years. It is also likely to become increasingly expensive and complex as leading softwarevendorsseektofulfillthedemandsoftheirshareholdersinadifficultglobaleconomy.Softwarebuyersthereforeneedto take reasonable steps to defend their organizations against unnecessary spending and unacceptable risk. ELO offers a proven way of doing so. And Flexera Software uniquely offers a proven way of achieving ELO excellence.

About Flexera SoftwareFlexera Software is the leading provider of strategic solut ions for Applicat ion Usage Management; solut ions delivering cont inuous compliance, optimized usage and maximized value to applicat ion producers and their customers. Flexera Software is trusted by more than 80,000 customers that depend on our comprehensive solut ions- from installat ion and licensing, ent it lement and compliance management to applicat ion readiness and enterprise license optimization - to strategically manage applicat ion usage and achieve breakthrough results realized only through the systems-level approach we provide. For more information, please go to: www.flexerasoftware.com

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Flexera Software LLC1000 East Woodfield Road, Suite 400Schaumburg, IL 60173 USA

Schaumburg (Global Headquarters):+1 800-809-5659

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Copyright © 2011 Flexera Software LLC. All other brand and product names ment ioned herein may be the trademarks and registered trademarks of their respect ive owners. ELO_WP_StretchingBudget_Oct11