Software Asset Management or ‘SAM’ for short, is the practice of managing software licensing obligations and optimizing the costs and value of your software investments. It can have some clear and possibly surprising benefits to your business, so here are the top 8 ways that a mature SAM program can deliver value to your business and what that means to IT operations:
1. Eliminating Software License Compliance Risks
As we’ve covered in previous blogs about Software Vendor Audits – what can go wrong?, businesses live under the periodic risk of getting audited by one (or more) software vendors when you least expect it. Even the top-tier ‘unlimited’ or ‘all you can eat license agreements don’t fully protect your business from the chance occurrence that a software vendor will ask you to prove that you’re correctly licensed for the software you have deployed – also known as a software vendor audit.
These circumstances are not really ‘chance occurrences’ at all, but instead, an informed and well-calculated play by software vendors to ensure they’re continuing to gain revenue – they have a good idea how much you’d need to pay (otherwise they wouldn’t cover the expense of bringing-in external auditors..!)
That’s why protecting your business from this unplanned, unbudgeted expenditure and disruption is the number one objective of a robust SAM program. By understanding what compliance risk may be present, you’ve reached the first position of becoming informed and able to act, make changes and do something about it. Any under-licensing can be atoned for and with expert guidance, you can eliminate compliance risks in-line with an optimal licensing strategy.
Above all, robust SAM means you’re in control, able to proceed with the year according to plan and are not bringing the business or IT team into disrepute with any messy, often well-publicised governance failures, disputes or even court cases with software vendors.
2. Reduce and Avoid Costs
Debatably, this should be number one as reducing costs is the name of the game, right? Well, software audits are as costly as they are disruptive and Software Asset Management won’t just protect you from making the mistakes that can lead to big expenses if / when you’re audited; SAM will also make sure you’re not overspending in the first place.
The figure widely agreed upon across the industry for how much software business purchase but never actually use, is 30%. Let that sink in – nearly a third of your software expenditure provides little or no value at all to the business. It’s shocking because it’s entirely avoidable and the answer is SAM.
Application Monitoring or ‘software usage metering’ is a function of IT Asset Management (ITAM) and SAM solutions, measuring how much software is used. This information feeds into the SAM optimization process of identifying unused software that can be safely removed and the licences re-harvested, returning to a virtual ‘pool’ to be redistributed to users who need them. This reduces the need to buy more licences and so reduces costs. The same process informs the business of what is actually used and required, so when procuring software, you are readily aware of what you need to buy.
3. Prevent Cyber Security Risks
One of the core principles of a good ITAM and SAM program is that you have to be able to ‘see’ you’re entire IT infrastructure. The days of relying on guesswork are long gone. Accepting blind spots and having to manually piece-together inventory data from a handful of IT Asset Management (ITAM) and other discovery and inventory tools. Instead, modern ITAM & SAM solutions can give you a single, centralized view of all your IT hardware and software in one solution.
This means you can have a live, complete view of all software deployed across your entire IT infrastructure. This fundamental visibility can be enriched with intelligence from an automated Software Recognition service (SRDB) that will tell you precisely what all that discovered software really is in terms of versions, editions and licensable products. You then have a complete, accurate and meaningful list of software you can work with for SAM and any other agendas where you need to understand your software in detail.
Maintaining Cyber Security tops this list, as over 75% of attacks leverage known vulnerabilities in software that are over 2 years old. By seeing and understanding all your software at all times, when vulnerabilities become known, you can immediately see if you’re at risk and to what extent you may be affected. The mitigating risk then becomes a case of proactively targeting and upgrading vulnerable systems, with the assurance of being able to confidently report back to the business that the risk has been negated.
4. Navigate Mergers, Acquisitions and Divestitures (MAD)
During MAD activity, all assets need to be verified – including software licenses. For larger organizations, the total value of software assets can come to many millions of dollars and so can the potential risks if the organizations being traded are not properly licensed. Changes in ownership could affect the existing licensing provisions and so contracts with vendors need to be properly understood.
Furthermore, any activity like a merger introduces a new level of complexity and is therefore a red flag for a software vendor to request a formal audit. So, it’s essential that due diligence extends to software license compliance and fortunately, tactical services from SAM specialists exist to fulfil this purpose – to give you clarity quickly and an understanding of the full legal and financial impact of transitioning software assets. You may need to make sure that assets owned by specific legal entities are brought across, or that any shortfalls are corrected before ownership is transferred. The last thing anyone wants is to buy a business and discover you’ve inherited a multi-million-dollar software licensing risk, just as a software vendor wants to audit you!
5. Standardize and Rationalize Software to Support Operations
We have seen examples where organizations have become dependent on a small piece of software that is unlicensed. That means no guarantees or understanding of how a critical part of how your business operations will continue to function. Software may be end-of-life and out of support. It may fall behind the rest of your infrastructure if / when an upgrade is required and not available. Vendors may discover its utilization and begin legal proceedings to prevent its use.
Whatever the dynamics, a license cements the understanding and commitments of both vendor and end-customer to use the software and so understanding what you have and use, even if none-commercial ‘Tier 2 / Tier 3’ software, is a critical part of protecting your business operations and continuity.
In addition, the spread of over-lapping software products increases the complexity of supporting end-users as well as the overheads of running and maintaining applications that could be rationalised down to fewer, cheaper or more strategic options. SAM will give you visibility of this software, and an understanding of the licensing terms, lifecycle, costs and usage, so you can make informed decisions for your business.
6. Manage your Costs in the Cloud
Cloud has been both master and saviour for many organizations, particularly those that finally made the jump during the upheaval of 2020. But the cloud is so expensive to exit that it can feel like a one-way street. The freedom with which resources can be provisioned and controlled drifting away from the governance of IT has left many businesses firmly on board the cloud train, whilst fire-fighting the rising costs.
SAM plays a part though – even within the new financial maturity and accountability models laid out by the new ‘Cloud Centre of Excellence and ‘FinOps’ teams – it still boils down to the same principles of being able to ‘see’ your assets, understand usage and the business need, organize accountability for costs with stakeholders and manage usage closely enough to be able to forecast accurately, leverage savings incentives and identify and remediate anomalies in spending as quickly as possible.
The two big-ticket software savings in the cloud are SaaS subscription Optimization and Bring Your Own Licensing (BYOL). The latter can reduce software costs by as much as 80% by using on-premises licences within your public cloud and the interoperability of cloud vendors is increasingly supporting this type of flexibility. Oracle’s agreement with Azure is a good example – you’re increasingly able to utilize whatever software technologies you want where you want – providing you have governance and control over both your on-premises licensing and within the cloud.
SaaS also is perhaps the easiest example of a cost-saving you can make; use a SaaS License Optimization Solution to quickly identify all of the unused/underutilized subscriptions and eliminate the overspending with confidence. If you don’t believe this is an issue, request a test to scope it out – on average, as much as 50% of SaaS subscriptions deliver no value!
7. Improve your Negotiating Position
Aside from controlling compliance risks and not entering vendor negotiations from the compromised position of already owing vendors thousands or millions of dollars, the detailed and rich information that SAM delivers puts organizations in a stronger position to negotiate a better agreement with their software vendor(s) come renewal time. Being able to show that you are compliant essentially weakens the software vendor’s hand and prevents them from being able to strong-arm you into unfavourable and costly agreements, which only specifically favour them.
Also, by unifying your software buying across the organization, the increased volumes you can offer the software vendor will enable you to get a better deal than if you had several people/departments across your organization negotiating independently.
8. Unify IT Asset Intelligence & Remove Barriers to Information
So, we’ve looked at the tactical and strategic benefits of SAM, but one thing that is not to be underestimated is the power that SAM and particularly a modern SAM solution has to unify information and bring IT asset intelligence together into a single, centralized power source for agile decision making.
It would be a strategic mistake to manage your IT hardware, software, remote devices, datacentre, SaaS and cloud within separate tools or to be driven by the needs of Service Management for example, when selecting an IT intelligence platform.
The beauty of SAM and SAM solutions, is that it is so complex – you need the most advanced discovery capability, you need to manage the nuance and detail surrounding licensing, you need the ‘big picture’ view, live information, a common way of ‘seeing’ and understanding your IT assets. And you need to bridge (or actively avoid) a gap between on-prem infrastructure and the cloud. A modern SAM platform is the way to achieve all of this because they are designed for that bigger purpose.
By centralising and removing barriers to information, teams can do more, communicate better, make stronger decisions, act faster and increase the readiness of IT to support the agile demands of the business.
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