Software is becoming one of the most expensive and common elements with the IT environment with a McKinsey reporting stating that “Software licensing is expected to account for 35% of the total IT budget by end of 2010”. Now we all know that many computers are out of compliance, mostly due to maverick buying (downloads) and re-deploying/using software against the rules of the license. The Business Software Alliance mentions that “1 out of 5 computers in the US are out of compliance and given the size of the US market, software piracy and license misuse is a significant problem.”
Software Asset Management (SAM) is a business practice that involves managing and optimising the purchase, deployment, maintenance, utilization, and disposal of software applications within an organisation. According to ITIL (there is a separate book on this within V3 complimentary portfolio), SAM is defined as “…all of the infrastructure and processes necessary for the effective management, control and protection of the software assets…throughout all stages of their lifecycle.”
Fundamentally intended to be part of an organization’s information technology business strategy, the goals of SAM are to reduce IT costs and limit business and legal risk related to the ownership and use of software, while maximizing IT responsiveness and end-user productivity. SAM is one facet of a broader business discipline known as IT asset management, which includes overseeing both software and hardware that comprises the infrastructure necessary to enable the business to make use of IT. There is even an ISO standard for SAM (ISO/IEC 19770-1 2006 and part 2-2009).
Now it is interesting that there are always two sides to any story and the same is true with SAM. From the Business side we have the software user/owner community mostly thinking they are over-licensed especially when they invest in corporate licenses. However, once a SAM audit is carried out it is often discovered they are they over licensed in some area and under in other areas, often though re-use of software on other hardware which is outside of the license agreement. During a recession many companies simply choose to ignore investing in SAM as a service or discipline to try and reduce operating costs, often a false economy. However from the other side of the story, we have the Vendors who not only need to protect their assets and its use, but during a recession see audits of software as a quick and easy method of increasing revenues. Gartner recently stated in a report that “while Adobe, Autodesk, Microsoft, Oracle and IBM were cited as the most “prolific” auditors, the survey respondents also reported audit requests from no fewer than 18 other software vendors, including BMC, CA, HP, SAP and Symantec.” According to a recent IBSMA survey, software vendor audits have increased by 79%. If your software vendor’s revenues are down, then you can expect them to come knocking to carry out an audit in the hope that fines will boost things. Looks like you had better start getting a handle on this, before they come knocking on your door. Gartner estimates that through 2010, over 60% of mid-to-large-sized organisations will undergo and external software audit.
There are some remote SAM audit solutions which can give you a quick “state of the nation” audit and allow you to start managing things in preparation and to help cost savings, re-negotiations on renewals, with the knock on benefit of further aiding Change Management and other ITSM disciplines. (I can recommend some providers if you send me a note).
Why not just wait until it becomes an issue? Well the Business Software Alliance says that it is twice as costly to become compliant after an audit (if you include the damages and cost of purchasing new licenses) than to buy the right number of licenses in the first place.” Whilst you may have purchased correctly at the start, over time, during reorganisations and relocations and re-deployments the license terms are rarely, if ever, referred to, to ensure compliance is maintained. With the recent round of redundancies you may find that you are indeed over licensed and following your own audit can re-negotiate with the vendors and recover the costs of SAM more quickly than you think.
Let me know if you’ve recently been audited by a vendor, perhaps for the 1st time.
Any feedback and comments are always welcome!!
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