License reclamation is the process of taking licenses back from people who are not using them, so they can be reassigned to someone who needs one or removed from the contract altogether. It is the fastest way to reduce software spend, and when done well, nobody notices except finance.
Done badly, it creates angry users and support tickets. The difference is a clear process with communication built in.
The reclamation funnel
Not every inactive license should be reclaimed. Some people are on leave; some use a tool seasonally. A funnel narrows the list to licenses that can safely be recovered.
Six steps to reclaim safely
- Define inactivity
Choose a threshold per product, for example no sign-in for 90 days, and use it every cycle. See inactive user thresholds.
- Build the list
Pull last-activity data from the vendor's admin console or your identity provider, and match it to licensed users.
- Remove exceptions
Exclude people on leave, seasonal users and service accounts that must stay licensed.
- Notify users
Email each user, copying their manager for large products, with a date and an easy way to keep the license. Two weeks is usually enough.
- Reclaim
Remove the license but keep the account and data where the product allows, so access can be restored quickly.
- Bank the saving
Reassign reclaimed licenses before buying new ones, and reduce the contract count at the next renewal, true-down or billing period.
One cycle, from list to banked saving, looks like this:
Sample notification
Mistakes to avoid
- Tell users before acting, and give them a one-click way to keep the license.
- Use the same threshold every cycle, and publish it.
- Keep accounts and data, so a released license can be restored in minutes.
- Reduce the contract count before the notice deadline.
- Reclaiming silently: it erodes trust and generates tickets.
- Changing the threshold each time.
- Deleting data along with the license.
- Stopping at reclamation: a reclaimed license that is still paid for is not a saving.
How MI One helps
Frequently asked questions
How often should we reclaim licenses?
Quarterly for most per-user products, monthly for high-cost products with frequent joiners and leavers.
What about users who use a tool once a year?
Treat them as exceptions, or move them to a cheaper tier or a shared pool where the license model allows it.
Do reclaimed SaaS licenses reduce the bill immediately?
Usually not. Most subscriptions bill for a committed quantity until renewal. Slack is one exception: under its fair billing policy, it credits workspaces for members inactive for more than 28 days.
Sources
- Slack, "Slack's fair billing policy," help center. https://slack.com/help/articles/218915077