Ghost licences

Definition

Ghost licences are subscriptions or seats that remain on the bill although the assigned users have left, switched tools or never activated them. They are a common form of profit leakage in SaaS-heavy organisations and are exposed by reconciling the contract register against actual usage data.

Example

Comparing licence counts to active logins reveals forty unused seats, cancelled at the next renewal to save the budget.

Why this is a business risk

Ghost licences are pure waste: money paid for zero value. In organisations managing dozens of SaaS tools, unused seats accumulate silently, often because no one has a consolidated view of what is contracted versus what is actually used. The risk compounds when contracts auto-renew: each renewal locks in another term of paying for licences that nobody needs.

How to manage it

• Maintain a register of all SaaS subscriptions with seat counts, assigned users and auto-renewal dates.
• Reconcile seat counts against active login data at least quarterly, or immediately when employees leave.
• Trigger a licence review as part of the offboarding process for every departing employee.
• Set renewal alerts ninety days before each SaaS contract renews so unused seats can be cancelled before the new term locks in.
• Require written approval before adding new seats, so licence growth stays intentional and tracked.