Software industry drives revenues with licence audits

Software companies use software asset management programmes to drive up revenue, according to a report from Ernst & Young.

Software companies use software asset management programmes to drive up revenue, according to a report from Ernst & Young.

In the Ernst & Young report, IT compliance without tears, 63% of IT suppliers cited revenue generation as their number one reason for establishing software asset management (SAM) client programmes, while 50% said SAM was used to protect intellectual property rights.

Internal inconsistency in purchasing patterns of software was the main prompt for suppliers to consider audit proceedings. History of poor compliance and the size of the client also ranked highly - both categories were cited by 50% of suppliers as being warning signs which would make those customers more likely to be given a SAM audit.

The report confirms that, while many organisations are attempting to manage their IT assets more effectively, there remain barriers to fully realising the benefits of such programmes.

Inadequate asset management tools were reported by 75% of suppliers to be the main barrier for their clients. An overall lack of understanding around compliance policies was cited by 63% of suppliers. Complexity of software contracts and a lack of client management closely followed, with 50% of suppliers citing these all as reasons why businesses may struggle to achieve compliance.

Just 20% of IT departments have put in place formal programmes for to manage software asset management (SAM) according to Ernst & Young.

Blatchford, partner with Ernst & Young, said: "Both suppliers and customers are critical of the over-complex nature of many software contracts - the majority of those we surveyed confirmed this to be the case. Customers also feel that their own decentralised structures often make it harder to keep track of usage around the organisation - as does their increasingly complicated suite of IT packages."

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