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Companies are losing out on expensive software licenses
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Four out of ten licenses are never used
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Companies can save 50 percent on IT costs by opting for on-demand software solutions
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Hamburg, Germany, February 14th, 2006 –
Companies across the globe invest more than a third of their capital in software programs that they never use. In German IT departments alone, there is a total of over 200 million euros in software licenses lying around unused. Over four out of ten licenses acquired by companies as part of an investment in customer communication tools, for example, are surplus to requirements. On-demand payment models calculated according to direct need have so far been few and far between. From March, novomind AG will be offering its clients its novomind Self-Service Suite™ e-mail management component, novomind iMail™, on demand, enabling customers to rent the solution instead of paying a full license fee.
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Software on demand offers companies the chance to scale their IT investments according to need and cut costs. In the case of customer communication software - e.g. e-mail management tools - companies pay according to size and save up to 50 percent. Mid-size companies can even save up to two thirds on investment costs compared to other software installed on site.
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So how does this work? The on-demand option allows companies to hire the solution instead of buying outright. The IT service provider runs the program in its own data center. Companies can access the system using a standard web browser and on payment of a fixed fee per user per month. There are no additional hardware/software or internal IT services costs involved - which can often make up 60 percent of the total costs involved when investing in a bought solution, according to use.
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What’s more, the initial investment required for on-demand solutions us low and the system is ready to go after just a few days. "The solution is constantly tailored to meet current need and grows with the company. Businesses pay for what they use and nothing else. This means that they can enable resources at peak times and then disable them again when they are no longer needed," novomind’s CEO, Peter Samuelsen explains. The inflexible fixed cost solution is replaced by a variable model that allows for cost fluctuations.
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Until now, the German software market is still in the initial phases of developing on-demand solutions: just nine percent of companies currently use a model of this type and three percent of turnover generated from company software comes from a rental solution. These figures are set to increase over time, however: one if four companies is planning to switch to an on-demand solutions model for future IT investments.
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The Hamburg-based software provider, novomind, is the fastest-growing company in the field of electronic customer communication and e-mail management. As a leading provider of digital customer communication solutions, novomind AG offers software solutions tailored to guarantee customers better, more individual service - significantly improving customer administration and generating a rapid return on investment. The product department’s portfolio includes the novomind Self Service Suite™. The software package contains the full range of communication modules needed for a customer service center: e-mail management, virtual customer assistance and systems enabling interactive, real time communication online - all in one, centralized knowledge database.
The novomind services department develops complex e-business applications that include scalable online shop solutions. Over 40 leading companies have opted for novomind technology so far, including Citibank, the Otto Concern, Yello Strom and the German pension insurance office. EnBW and Mexx, as well as public sectors representatives such as the German Parliament and the Federal Ministry of Finance, have already successfully implemented novomind systems to boost customer loyalty, turnover and public relations.
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