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Software asset management maturity in the age of SaaS

For asset tracking, software as a service is no different from any other type of software licensing – but the process of software asset management needs adapting

When software asset management (SAM) started to show up as a singular discipline, the IT industry tried to do what it does to solve any other problem – throw technology at it.

Glacial evolution in the development of SAM has seen it experience growing pains in standing out from service management, hindered by senior management perceptions of what SAM actually is, and the illusion of how easy it is to make IT work.

Where this is more evident than ever is with the advent of technology that is delivered through software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS).

In this context, there is a difference in perspective in how SAM is viewed. IT spend is not considered a one-time hit to the coffers, and so used to be viewed as capital expenditure (capex), but rather, due to the subscription nature of the billing, IT expenditure now falls into the operational expenditure (opex) bracket.

So what does this mean for SAM as a discipline? Previously, good efforts around SAM might have been considered cost avoidance, but the capital is still viewed as spent because it is pre-allocated for that purpose. Now savings will reflect on operating costs – and, all of a sudden, a good SAM manager has the potential to become the finance director’s new best friend.

A major rewrite of whatever SAM you might have in place is not required to support new forms of contracts and the shift to opex. Rather, a subtle redirection is needed. Typically, results or effective licence positions (ELPs) will have been generated to counter or support a software supplier audit.

Also, a less rigorous accounting procedure might have been used in maintaining an existing contract.

How can SAM help?

Typically, the way of counting such data would have focused on totalling up the number of installations of a supplier’s software. With as-a-service contracts, the licence metrics required to calculate consumption require collaboration across the business to determine usage.

Over the past 12 months, SAM Charter has maintained its position that such refocusing does not automatically require the purchase of further technology, but rather a realignment of SAM processes that should already be in place:

  • If you don’t want to pay for IT services ascribed to ex-employees, make sure you have a robust joiners, movers and leavers process.
  • If you need to secure the best possible value from your existing software entitlement into a new as-a-service delivery model, make sure you have a strategic sourcing process in place that fully accounts for prior purchases and their maximum value to your company.
  • If you want to avoid support and maintenance contracts, which have hidden multipliers embedded into them, then check that your support and maintenance review process knows what data it needs to pull in and from where in order to validate any fees paid.

Measurement of processes is every bit as important as measurement of software. Such a standpoint switches SAM from a reactive discipline defending software supplier audits on a case-by-case basis – although those cases can have a tendency to be epic encounters – to one of a proactive or strategic discipline, needed to prevent IT costs from escalating disproportionately.

And where that strategy is needed more than ever is in the signing of new contracts for as-a-service IT delivery. Why? Fundamentally, the manner in which the lifecycle of software is modelled has undergone a tectonic shift.

First, if you are going to transfer credits from former perpetual licences, you need to make sure the best possible deal should be struck – so right-sizing existing demand and predicted future scaling for costs is vital.

As-a-service still comes with support and maintenance costs, so it is necessary to ensure you are in a position to split the products you use into separate agreements, especially if the small print for support and maintenance force-feeds uptake across all the products/services specified in your contract.

Third-level metrics (those elements of a compliance position that require additional gathering over and above what a standard inventory system can provide) will need to be collated and verified much more frequently to meet the demands of fiscal reporting cycles, not software supplier-inspired.

Staff turnover will also need to be taken into account. In a capex environment, IT spend is considered an accepted drain on cash reserves. However, forever adding new personnel to that IT load in an opex environment will result in an ever-expanding levy that a finance director will want to see is managed correctly. No company pays ex-employees additional wages; why, then, should a company pay for IT that ex-employees are no longer using?

Maturity of the SAM process

SAM Charter has produced the Global SAM Process Maturity Report 2016, which collated and anonymised the results from a range of companies that have completed a “light” SAM process maturity assessment to offer a composite view of where commerce stands with regard to its SAM processes.

The report found that 43% of organisations fail to give any regard to governance, risk and compliance when crafting their SAM processes. This is evidence of a bottom-up approach when looking to engage with SAM, and is fraught with problems when looking to secure senior management buy-in at later stages of a SAM programme. Addressing business need should top the IT or SAM agenda.

Moreover, 36% of organisations fail to determine which platforms or devices are in scope. This is evident of SAM programmes that have been established to tackle software supplier audits – the IT department is not so fussed about the depth or quality of coverage; rather, it wishes to focus on the installations it knows it has in place.

The SAM global maturity report found that 34% of organisations do not have a process in place to capture contract data. Such a response implies that many organisations are focused on aligning installations to purchasing data, which will, in many cases, justify the installation. However, if your procurement department has negotiated unique terms and conditions pertinent to that supplier, then any subsequent ELPs could be missing valuable benefits relating to deployment and usage of software.

Read more about software asset management

  • We will ensure we don’t break contract terms, but providers must better meet our needs in terms of simplicity and flexibility, say IT bosses.
  • There remain a number of compliance issues with SaaS, none of which has a common, single fix.

More than half of those taking part in the study said their organisations do not benchmark their SAM systems against the platforms in scope. This is fatal to good SAM, and particularly evident in organisations that might have been dazzled by a salesman’s slide deck, looking to shoehorn a product into a space that is not fit for purpose.

If your SAM suite is incapable of inventorying a Unix platform, for example, then default Windows-only SAM tools will not be able to report on the software installed, creating a blind spot in your SAM reporting.

Licensing was also found to be a weak area, with 45% of respondents admitting their organisations do not have sufficient licensing knowledge or staff to maintain their SAM system. This is an inherited viewpoint from days of old when to resolve SAM, all you needed was a SAM tool; making sure you had the staff to interpret the results to your company’s advantage was an afterthought.

IT operations have long trumpeted the value of the Deming cycle (plan, do, check, act) and such activity should form part of any reputable SAM framework. Failure to do so could result in stagnation and/or a failure to progress SAM maturity. Some 57% of the organisations that took part in the study said they do not review their own SAM processes for performance evaluation.

Regardless of whether you manage a complex technical environment or a “mom and pop” vanilla IT estate, ensuring that your reports are given the time of day and appropriately actioned means that you and SAM are being taken seriously – otherwise, your company is paying lip-service to software asset management. Yet 45% of the organisations quizzed in the SAM maturity report said they do not follow up on SAM reports to ensure they are appropriately actioned.


Rory Canavan recently joined the working group which oversees the creation and promotion of ISO Itam standards. He is the owner of SAM Charter and runs the SAM Acceleration group on LinkedIn.

This was last published in February 2017

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