Software Asset Management’s Journey to Strategic Importance
In the not too distant past, only outlier organizations viewed software as a unique corporate asset requiring specialized people, processes and technology to manage. Most organizations barely understood the true complexities and risks around procuring software, remaining in compliance with licensing agreements, and understanding their “shelfware” situation (i.e. what software they own but are not using) – let alone doing something about it.
Then the climate changed – creating an element of tension and dysfunction between the world’s software buyers and sellers. Software companies, seeing an opportunity to bolster revenues in increasingly challenging economic times, started to more aggressively exercise their contractual rights to conduct software license compliance audits. Teams of auditors started descending on enterprises globally, forcing their customers to engage in lengthy, time and resource consuming license reviews. These audits were resulting in enormous “true-ups” – findings that enterprises were out of compliance with their contracts and owed their vendors additional fees.
Fast forward to 2016 and the extent of audit pain in today’s enterprises is clear. A Flexera Software Report released earlier this year revealed that 65 percent of enterprises faced a vendor software license compliance audit within the past year, and 23 percent were audited three times or more. It also found that 44 percent of enterprises paid $100,000 or more in true-up costs to their software vendors in the past year, and 20 percent paid $1,000,000 or more.
The pain organizations have endured in defending against intrusive software license audits has driven the urgency for more mature Software Asset Management (SAM) programs. SAM has introduced people, processes and automation around software discovery, inventory, compliance and license optimization. Gartner estimates that companies implementing SAM can achieve up to 30% software spending reductions within one year.
But SAM itself has had to continuously evolve since it was first introduced. Why? Because the software landscape today looks nothing like it did in the early 2000s. The cloud, virtualization, Software as a Service (SaaS) and mobility are redefining how software is delivered, how it’s paid for and how users access that software. The rise of the cloud, Internet-connected devices – (The Internet of Things), software vulnerabilities and cyber-crime are redefining what software asset management must entail. And software vulnerability concerns are driving SAM to the forefront as security teams – like SAM teams – must understand what software they have before they can understand whether they are exposed to dangerous vulnerabilities.
This report explores the changes in the software landscape and its implications for the next generation of SAM solutions – SAM.Next.