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Layoffs leave behind orphaned hardware, unused software licenses

The fate of sensitive corporate data is also a worry

March 11, 2009 12:00 PM ET

Computerworld - Pat Beemer, IT director for Seattle Lighting, has a lot of orphaned computer hardware and unused software licenses on his hands -- the result of what he calls "serious" layoffs at the company.

"We're scratching our heads with what to do with them. Some of these PCs had sensitive data on them," he said. "Most of the PCs are old, so they can either be resold or destroyed, but how do we warehouse the others?"

Seattle Lighting is not alone. The question of what to do with unused IT equipment is a rapidly growing problem for many companies hit by the recession and the accompanying layoffs. Countless desktops, laptops, servers and handheld devices are lying around -- often with sensitive data on them -- gathering dust in cubicles, in stockrooms or on vacant desks. At the same time, software licenses, notoriously easy to lose track of, are also piling up.

From the beginning of the recession in December 2007 through February 2009, 4.4 million people had lost their jobs, according to the U.S. Bureau of Labor Statistics. In the fourth quarter of 2008 alone there were 3,140 mass layoffs around the country resulting in 508,859 lost jobs. In January, another 2,227 mass layoffs occurred involving 237,902 workers.

"Let's say half of those [laid off] are knowledge workers," said Forrester Research Inc. analyst Peter O'Neill. "A knowledge worker usually has a copy of Microsoft Office, so you can make a direct correlation" between unused software and laid-off workers.

More than one in five businesses that have had software audits are holding on to unused software, also called shelfware, according to a soon-to-be released software budget survey from Forrester. And, only 35% of the 776 U.S., European and Asian companies that Forrester surveyed between December of 2008 and February 2009 had even been audited by a third-party provider, O'Neill said. That means the percentage of companies with shelfware is likely higher than the survey results indicate.

O'Neill added that on average, 15% of a company's IT budget is dedicated to software expenses, including new licenses, which can be expensed, and maintenance. Companies pay 10% of their software maintenance payments for shelfware. So, a company with an IT budget of $1 million, would waste about $15,000 on shelfware, O'Neill said.  

"At the end of the day, I'd say almost every company... finds shelfware," said O'Neill, who works in Germany. "I've seen it in Europe even more dramatically."

Many companies have no comprehensive, well-documented end-of-life program for hardware and software -- a business oversight now coming to light as the recession deepens. "That isn't a standard business practice yet," O'Neill said. "It definitely should be."



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