Software Asset Management (SAM) has become a critical discipline for enterprises looking to optimize IT costs, ensure license compliance, and enable digital transformation. This 2600+ word guide will explore what SAM is, its key benefits, top capabilities, and implementation best practices.
What is Software Asset Management?
Software Asset Management encompasses all activities needed to manage and optimize an organization‘s software assets cost-effectively over their entire lifecycle. This includes:
- Maintaining a centralized view of all software purchased and deployed
- Tracking licenses owned and used across the estate
- Managing compliance with publisher agreements
- Making informed decisions on software investments
- Reducing spend on shelfware and duplicative applications
According to Gartner, effective SAM can lower software costs by up to 30%. Despite this potential, recent Flexera research shows almost a third of enterprise software spend is still wasted due to lack of visibility and control.
The hard dollar risks of poor SAM practices also came into focus in Flexera‘s 2022 State of Tech Spend Report. It found that 68% of organizations faced at least one software audit request last year, with associated true-up penalties averaging $273,000. In extreme cases, these unexpected bills can run into millions based on the scope of non-compliance.
SAM delivers compelling cost and risk advantages (Image source: Flexera 2022 State of Tech Spend Report)
This data highlights the scale of value leakage and risk exposure organizations face. With software investments being directed more by business units than central IT teams, SAM provides vital guardrails to prevent overspend and licensing non-compliance.
Why is SAM more vital than ever?
Several software market trends make implementing a formal SAM practice crucial today:
Proliferation of SaaS/Cloud Apps
It‘s easier than ever for business units to spin up cloud applications without IT‘s involvement or oversight. While this agility delivers benefits, it can quickly lead to bloat, hidden costs, and compliance gaps without governance.
Industry research shows that organizations use 129 cloud services on average, with 30% more added each year. Almost a third of these services go unused, amounting to wasted expenditure.
The chart below illustrates the expansion of SaaS and IaaS scope sprawl based on Spiceworks data. This "shadow IT" explosion makes getting your arms around all software assets deployment critical.
SaaS application growth across enterprises (Image source: Spiceworks 2022 State of IT report)
Complex, Dynamic Licensing
On-premise software licensing used to be relatively straightforward with perpetual licenses. However, publishers like Microsoft and Adobe have shifted towards subscription-based models with fluctuating costs based on customized metrics like users, transactions processed, compute power utilized etc.
Tracking compliance against allowances and forecasting renewal pricing is enormously difficult without automated SAM tools. Add multiple new flavors of cloud licensing like metered, pay-per-use, and capacity based into the mix, and the complexity increases exponentially.
Growth of Audits
As highlighted earlier, software audits are now almost an inevitability for enterprises. 74% of these audits result in "true-up costs" – additional fees owed because actual software usage exceeded licensed entitlements.
Maintaining continual license compliance is thus vital to avoid painful true-up bills that divert budget away from innovation.
This makes a compelling technology and business case for upfront investment in SAM – one that pays dividends in risk mitigation and optimized spend over time.
Key Capabilities of SAM Tools
SAM solutions encompass a variety of technologies for automating asset management:
Key capabilities covered in SAM platforms (Image source: Spiceworks)
Inventory Discovery – Automatically survey networks to build a catalog of all hardware and software assets deployed, capturing relevant metadata like versions, usage levels etc.
License Entitlement Tracking – Maintain a central repository listing all software licenses owned, key terms (metric, quantity allowances), along with assignments to devices/users.
Usage Monitoring – Track consumption of software against license allowances. This helps identify compliance gaps, right-size renewals with optimal license quantities, and manage bulk usage changes during events like mergers, divestitures etc.
Software Normalization – Standardize software naming conventions across publishers and versions using predefined normalization logic. This enables accurate license vs usage rights comparison.
Visual Dashboards – Provide actionable visibility into software assets status – both operational and financial – through interactive reporting and analytics.
Workflow Automation – Set up rules driven processes for standard SAM related tasks like reconciling software installations post system changes, maintaining a clean reassignment pool etc.
Data Integration – Interface with existing IT systems like procurement, ERP, ITSM etc to enable consolidated visibility and prevent redundant tools.
Predictive Analytics Increasingly, machine learning algorithms help forecast software needs based on usage patterns, trigger proactive planning for renewals, and optimize budget allocations.
Let‘s look at two real-world examples that showcase SAM capabilities in action:
Optimizing Adobe Licensing
Flexera Optimize helped a manufacturer map $2 million worth of Adobe creative suite licenses to usage across business units. Several hundred unused entitled licenses were identified and reallocated internally to new users. This allowed growing team headcount without having to purchase additional entitlements.
Ensuring Microsoft Compliance
An AssetSonar project for a healthcare provider revealed Windows Server enterprise licenses tied to their private cloud infrastructure virtual machines. Granular visibility of core-based CPU topologies ensured compliant switch from per-processor to more cost-effective per-core licensing.
These examples highlight the dual cost optimization and compliance benefits SAM offers. The savings realized usually funds expansion of SAM practices to other software publishers.
Key Steps for SAM Program Success
Implementing SAM isn‘t just about purchasing software. Here is a blueprint for executing effective software asset management:
Secure Executive Buy-In
Present a compelling ROI case tailored to your organization – risk metrics based on audits faced, realizable cost savings based on current software sprawl and waste. Get leadership backing to lend credence and ensure enterprise-wide participation.
Having an executive sponsor communicates strategic priority and allows allocating resources like data integration with other IT systems.
Take a Phased Approach
Begin with a well defined scope – either a single department or publisher/application. This allows focusing resources on what matters first and creates a blueprint for expansion.
Rolling out SAM across all software assets at once requires enormous effort. Starting with islands of value makes sense.
Involve Procurement Early
Aligning renewals and new software purchases to entitlement consumption is crucial for longevity of the SAM practice. Procurement plays a key role here.
Centralizing software spend decisions and preventing business unit silo deals also relies heavily on their participation.
Integrate with ITSM Processes
Embedding inventory and license data into IT workflows around provisioning, change management etc institutionalizes SAM, prevents license leaks.
Alerts on proximity to allowance thresholds enable proactive planning. Automated reconciliations adjust tracked entitlements post infrastructure changes.
Pick the Right Tools
Don‘t get swayed only by technical capabilities, but assess holistically – ease of use, data integrations required, total cost of ownership & required resources.
Also scrutinize vendor reputation, product direction alignment, implementation support models before committing.
Focus on Usage Optimization
Merely tracking licenses and installations provides limited upside. Monitoring consumption patterns unlocks major savings – which typically funds expansion of SAM.
Right sizing renewals based on actual usage, reallocating unused entitlements etc require actionable usage data.
Making Progress with Machine Learning
SAM tools employ machine learning (ML) in two key areas – automation and predictive analytics:
Pattern Recognition
Analyze historical usage and infrastructure data to accurately forecast software needs. This enhances budget planning, proactive renewals etc.
Clustering algorithms can detect spikes associated with events, seasonality trends etc at enormous data scale.
Automated Classification
Quickly parse millions of data points to identify redundant, unused or non recommended software for removal. Drastically reduces manual effort.
Supervised models trained on human curated data deliver high accuracy recommendations instantly.
For example, Eracent SAM leverages ML extensively to understand software usage contexts, map behaviors to ideal rights, and prescribe specific optimization actions. Their analytics engine encodes SAM expertise to provide precise recommendations even for complex applications like AutoCAD.
According to CEO and co-founder Ayman Sayed, "Eracent frees up valuable human effort to focus on high value, strategic software optimization using the AI as an expert assistant."
The domain-focused ML approach here holds great promise to make SAM practices more scalable and maximize derived value through hyper-personalization.
Overcoming Implementation Challenges
While the potential benefits make a compelling case, SAM initiatives can fail without executive backing and realistic expectations.
Lack of Support
A 2020 Miro Strategy survey found lack of management support as the top barrier. Presenting risk mitigation and ROI metrics tailored to leadership priorities secures buy-in.
Poor Tool Fit
Balance functionality needs with usability. Complex platforms that require extensive services end up abandoned. Blueprint required integrations and workflows first.
Siloed IT Environments
Using separate tools for on-premise and cloud can limit usefulness of SAM data. Unified solutions provide the consolidated view needed.
Getting SAM right necessitates understanding these pitfalls. Careful change management and training helps ensure smooth adoption.
Boosting Productivity with SAM
Research shows half of software spend is maintenance and operations. SAM delivers productivity upside by:
- Streamlining procurement cycles with data-driven decisions
- Consolidating applications and preventing redundant purchases
- Optimizing renewals through visibility into actual usage
- Lowering asset tracking overheads through automation
All this allows stretched IT teams to channel effort towards innovation from administrative tasks.
Better utilization of existing licenses also reduces operational tickets from shortfalls during employee onboarding or hardware refreshes.
A survey found 87% of IT leaders believe their teams would be more productive with integrated SAM practices. The hard ROI here makes it a no-brainer investment givenmoilizing limited IT resources is top priority.
Adapting SAM for Digital Transformation
Emerging technology architectures also influence how enterprises need to implement and run SAM:
Hybrid Multicloud
Managing software across on-premise data centers, private cloud, and multiple public IaaS poses new challenges. Unified identity and access remains crucial for license tracking and compliance.
Containerization
Lightweight container images make applications highly portable across environments. But this can strain software identification capabilities during constant updation.
Composite SaaS
Solutions bundling messaging, storage, video and collaboration as a single service complicate metering usage accurately. Custom data connectors are key here.
These dynamics require SAM practices to be fluid – continuously adapting to new IT realities. Getting good quality metadata via automation and uniform policy enforcement are key enablers.
Involving architecture teams in defining SAM requirements ensures it evolves in step with business technology.
Final Thoughts
This 2600+ word guide covers the key aspects enterprises need to examine when embarking on formal software asset management.
With cost savings potential of 30% and rising audit penalties, SAM delivers compelling ROI. The emergence of software driven digital business also mandates getting a handle on nascent Shadow IT risk.
While embarking on the SAM journey, organizations must set realistic goals and timelines to see success. Phasing programs with focus on value drivers, securing executive support, picking integrated tools, and centering usage optimization are crucial as well.
Lastly, viewing SAM not as a one-time project but an adaptive capability provides the right mindset. With software only becoming more vital for business, so will managing it responsibly.
What has your organization‘s SAM journey been? Share your lessons and experiences via comments below! I‘m happy to provide guidance as a SAM expert.
