KPIInformation Technology

Software Licence Utilisation Rate

Percentage of purchased software licences actively used

What is Software Licence Utilisation Rate?

Software licence utilisation rate is the percentage of purchased licences that are actively used. It shows how much software spending is actually being put to work.

Unused licences are wasted money, so tracking utilisation helps cut costs and right-size purchases.

How this KPI is measured

Function
Information Technology
Sub-function
IT Cost Management
Industry
All Industries
Type
Lagging
Impact
Efficiency
Unit
%
Measurement frequency
Quarterly
Formula
(Active licences in use / Total licences purchased) × 100

How to calculate it

Divide active licences in use by total licences purchased, and multiply by 100.

For example, if 700 of 1,000 licences were in active use, utilisation is 70%.

Define active, for example used in the last 30 or 90 days, and review by product, since some tools are used rarely by design.

Where it is used

  • Cutting software cost

    Remove unused licences.

  • Right-sizing renewals

    Buy what is needed.

  • Finding training needs

    See who is not using tools.

How to improve it

Tips and common mistakes

  • Some licences, such as occasional-use tools, will always have lower use.
  • Check contract terms before reducing.
  • Review at least annually.

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