What is License Harvesting? A Complete Guide to Optimize Software Usage

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Unused software licenses can drain a company’s budget. A recent report revealed that unused software licenses cost businesses around $44.7 million per month across 30 popular software tools – up to $536 million annually.

If you do not properly manage your licenses, you will incur unnecessary spending, poor ROI, overprovisioning, and missed opportunities for better resource allocation.

So, what’s the solution? License harvesting.

With proper harvesting, you can identify and reclaim these idle licenses, ensure your team has access to what they need, and keep costs under control.

Still unsure how license harvesting works? Read on, and we’ll explain how to control your software spending.

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TL;DR

• Companies waste thousands of dollars of their software budget on unnecessary new license purchases.
• License harvesting helps reclaim and reallocate unused software licenses, reducing costs.
• Common challenges in license harvesting include lack of visibility, manual processes, and complex vendor agreements.
• Tools like CloudEagle.ai automate license tracking, reclamation, and compliance to save time and money.

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What is License Harvesting?

License harvesting is the process of reclaiming an organization's unused software licenses. Companies often forget or underutilize these licenses, which continue to rack up costs while adding little to no value.

License harvesting helps businesses maximize their software investments by redistributing or downgrading licenses, reducing the need for unnecessary license purchases.

For instance, imagine a company with 100 software licenses, but 20 employees barely use theirs. License harvesting steps in, identifying those 20 and reallocating them to employees who need them. Instead of purchasing unnecessary new licenses, you’re optimizing what you already own.

This is a crucial practice in software asset management (SAM), as it helps companies optimize their software investments, reduce waste, and cut costs.

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How License Harvesting Works?

The process is simpler than you might think. It’s about tracking, identifying, and reallocating to avoid wasting money on unused software.

Here’s how it works:

Track license usage:

First, it gathers detailed data on how your organization is using licenses. SaaS license management tools like CloudEagle.ai integrate with hundreds of applications to monitor software usage at a granular level and provide the most accurate data.

Identify unused or unused licenses:

Once it collects the usage data, you can quickly spot the licenses that are sitting idle or underutilized. These licenses represent potential savings, as you can downgrade, reclaim, or reassign them to more active users.

Automate license reclamation:

With workflows in place, you can automate reclaiming these unused licenses. CloudEagle.ai  makes it easy to automatically bring in licenses for software license optimization, whether through triggers like usage thresholds or employee offboarding.

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Reallocate or downgrade licenses:

Once reclaimed, now you can reallocate licenses to other employees or downgrade to more affordable tiers. This prevents unnecessary new license purchases, saving the company money.

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Benefits of License Harvesting

License harvesting is more than just about reducing costs—it’s about working smarter with software investments. Companies can unlock hidden value and improve overall software performance by reclaiming unused licenses.

Here are a few key benefits:

Improve return on investment (ROI)

When you invest in software, the goal isn’t just to own the license—it’s to maximize its value to your organization. License harvesting ensures that every dollar you spend on software is worth investing in.

Save on unnecessary spend

Why waste money on software that no one is using? A recent study stated that 53% of licenses remain unused, although businesses use 300+ SaaS products. Proper harvesting can save your business's wasted spend and redirect it to more critical resources or initiatives.

P.S. CloudEagle.ai makes saving easier. With workflows that automatically reclaim unused licenses, you’ll stop overspending and save - just like Fred Chin, who saved $1.2 million on Salesforce.

Want to know how CloudEagle optimizes your SaaS spending? We’ve got a guide that discusses how to reduce SaaS spending with CloudEagle.ai.

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Improving resource allocation and productivity

Efficient software allocation ensures your team has the tools they need exactly when needed – helping them work more productively.

By reclaiming inactive licenses, you can reassign that high-demand software is available for important users, reducing delay and boosting overall productivity—without additional costs.

Pro tip: Regular license audits are a simple but effective way to monitor resource allocation and avoid overlicensing.

Ensuring compliance and minimizing audit risks

License compliance is a big deal. Failing to manage your software license properly can lead to hefty fines during audits. When you optimize license harvesting, you can track and organize everything so you can breathe easily when that audit day comes.

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Challenges in License Harvesting

With benefits, come challenges – and addressing these obstacles becomes necessary for successful implementation. Let’s look at what challenges license harvesting includes:

1. Lack of visibility into software usage

One of the most significant barriers to effective harvesting is the lack of insight into who’s using what. Without a comprehensive view of software usage across the organization, it’s quite impossible to spot unused licenses.

SaaS management tools that provide real-time insights into user activity can help solve this. Tools like CloudEagle.ai  simplify tracking and visualizing usage patterns, ensuring no license flies under the radar.

2. Manual processes take time and lead to errors

Managing licenses manually is time-consuming and prone to human error. Automating the process with software license management tools can save hours while reducing the risk of overlooking inactive licenses.

Automating notifications for inactive licenses or low-usage periods makes life much easier for IT teams.

3. Employee pushback

Harvesting can create friction when employees feel they’re losing access to important tools, even if they rarely use them.

Addressing this by discussing the benefits of license harvesting (such as improved resource allocation and reduced costs) can reduce resistance. Offer alternatives, such as downgraded license tiers, to maintain flexibility for employees who still need occasional access.

4. Complex vendor agreements

Each software vendor has its licensing terms, making license harvesting tricky. Some licenses have limitations on transferring users or downgrading permits, making it difficult to harvest effectively.

Pro tip: Work closely with vendors to understand the fine print of your license agreements and look for opportunities to negotiate more flexible terms during SaaS renewal contracts.

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How CloudEagle.ai Helps with License Harvesting

Managing license manually? That’s a time drain. CloudEagle.ai simplifies this process by automating the entire license harvesting workflow so your IT team can focus on more strategic tasks.

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Here’s how we help you with license harvesting:

Step 1: Connect SSO for a Full View

Integrate CloudEagle.ai  with your Single Sign-On (SSO) to monitor app usage across your organization.

Step 2: Pinpoint key applications

With SSO connected, CloudEagle.ai analyzes usage to improve cost optimization and highlight critical apps and low-usage licenses. Connect finance systems for a deeper look at spending trends over the last 12-18 months.

Step 3: Set up auto-deprovisioning rules

Create auto-deprovisioning workflows for licenses with low activity. Set criteria like inactivity duration, so if someone hasn’t logged in over a certain period, CloudEagle.ai will alert them via email.

If they fail to respond to the email, their license is automatically deactivated and ready for reassignment.

Look at our detailed step-by-step process for setting up auto-deprovisioning rules.

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Step 4: Reassign harvested licenses instantly

After harvesting, CloudEagle.ai allows you to reassign licenses immediately—there is no need to track or email app admins manually.

Step 5: Monitor and optimize usage continuously

Use CloudEagle’s dashboard to monitor usage, adjust rules as needed, and avoid unnecessary spending.

Read our blog on harvesting low usage licenses to learn more about CloudEagle.ai’s license harvesting feature and how to configure it with step-by-step product images.

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RingCentral saved millions of dollars by optimizing unused licenses using CloudEagle.ai. Here’s their success story.

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Best Practices to Make License Harvesting Easier

Want to squeeze the amount of your licenses? Let’s look at the best practices you can follow for license harvesting:

Audit often

Think of regular audits as essential maintenance for your software environment.

Just like servicing your car keeps running smoothly, auditing your software usage helps you catch unused or underused SaaS licenses before they drain your budget.

Auditing frequently (monthly or quarterly) lets you spot trends in software usage and quickly reclaim licenses you no longer need. This practice ensures you’re not paying for just sitting idle software.

Set up a transparent system

A clear and transparent system helps avoid confusion when managing licenses. Everyone in your organization should understand the rules—who can request new licenses, when licenses should be reviewed, and how the harvesting process works at your place.

Discussing these protocols ensures that IT teams stay in control of software usage and that employees know what to expect.

For example, set rules that the team will review the license after 30 days of inactivity to keep the process consistent and transparent.

Pro tip: Automating this process with CloudEagle.ai  ensures nothing falls through the cracks, making the license management process smooth and efficient for you.

Communicate with your team

People may not like losing access to software, even if they aren’t using it (there is a chance they will need it later). That’s why open communication is important.

Explain to your team how license harvesting frees up resources for more important tools and helps the company run efficiently.  

When employees understand that you regularly assess their software usage and that this opens the door to new tools if needed, they’re more likely to support the process. A little transparency goes a long way in avoiding pushback.

Use smart automation tools

Don’t rely on manual processes for tracking license usage—they’re time-consuming and can lead to error. Smart license management tools like CloudEagle.ai automate the entire process, from monitoring software usage in real-time to identifying inactive licenses and reclaiming them with minimal effort.

These tools streamline license harvesting and provide insights and recommendations to manage licenses without getting stuck in tiring manual tasks.

These steps will make your process more manageable and ensure you’re not spending more than necessary. Keep it simple yet efficient, and you’ll never feel stuck.

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Wrapping Up: Make License Harvesting Work for You

License harvesting isn’t just a way to cut costs - it’s how you ensure your business uses its software efficiently. When you reclaim licenses, you keep spending under control and compliance in check.

We’ve explored the ins and outs of license harvesting, showing how it uses unused licenses, reallocates resources, and streamlines your software ecosystem. It requires innovative strategies like audits, tracking tools, and governance policies so that businesses can maximize the value of every software license.

That’s what CloudEagle.ai is good at.

It automates license tracking, reclaims unused software, and manages vendor agreements—all in one place. This allows you to spend less time on manual processes and more on growing your business.

Interested in learning more? Visit our website or our post on how we save license costs with CloudEagle.ai and make the most out of your investment.

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