People tend to not take a keen interest in software asset management, brushing it off as half-baked assumptions, corporate fairytales, and IT lore and mythology — until their company’s most recent software audit has gone south and they’re now looking down the barrel of a multi-million-dollar settlement. Then, all of a sudden, they care an awful lot. At MetrixData 360, we take pride in educating our customers in order to demystify the complexity of your software, so that it’s not a game of Russian roulette every time you’re audited by one of your software vendors.

Software Asset Management is Not as Important as IT Asset Management

While IT Asset Management and Software Asset Management both belong to the technology department, they approach that technology in different ways. ITAM is interested in the lifecycles around all IT assets, including hardware, software, devices, keyboards etc. while software asset management only deals with…well, only the software side of things. Since ITAM has a broader scope and tangible assets to work with, ITAM will often have more opportunity within a company to interact with different departments and display their worth. Compare this to software asset management, which deals primarily with intangible assets like software and deals with either the IT or financial department exclusively, so SAM can easily get lost in the shuffle of things.

I’m Not in a Software Audit, so I Don’t Need to Worry about my Compliance

Software audits are on the rise, and they won’t be slowing down any time soon due to the massive amounts of revenue that the software publishers can generate from them. There are many factors that can increase your risk of receiving an audit, such as the size of your company, the software vendors you have in your profile, and even your recent conversations with your sales rep. However, there is a certain level of inevitability to software audits as some software publishers send out audits on a routine basis or at random. For many companies it is hard to go more than three years without receiving notice of an audit of some kind. It is not a matter of if you will be audited, it’s a matter of when. The moral of the story is that if you are not being audited, you should still prepare as though you will eventually be audited (odds are, you will be).

On that note, there are many benefits to remaining in compliance other than avoiding potentially paying out huge auditing penalties (although that is the main appeal), such as:

  • You can optimize your spending and cut back on any wastage. Software asset management doesn’t just reveal where you are underpaying but also where you are overpaying
  • You can track the value of software and whether its consumption is worth the amount you’re paying

I have Installed a Software Asset Management Tool; My Job is Done!

Many companies struggle with software asset management but not for lack of trying. However, their struggle begins when they rely too heavily on automated software for licensing and inventory. Software asset management is not really a flip-the-switch-and-leave-it-alone type of processes but that also doesn’t mean that you should get out a pen and note pad and start counting things yourself, unless you want to repeat that phase in your childhood where you tried to count to a million. Even after your SAM tool is deployed, SAM is a journey that requires a lot of work to reach full optimization, which can take anywhere from a few months to a well over a year, depending on your goals for software asset management and how deep down this compliance rabbit hole you want to go. After implementing your SAM tool, you will need to address work towards finding the answers to the following questions:
  • Is the data that my SAM tool collects accurate? The last thing you want is to be working off of faulty numbers. It will undermine the authority of your whole SAM process; you can test the accuracy of your data through physically spot-checking, asking for lifecycle updates from the IT teams, and comparing data sets.
  • Are there any compliance risks that your SAM tools are picking up?
  • Are there any redundancies or cost-saving opportunities?

These aren’t easy questions to answer, and the data that you gather could be interpreted to draw different conclusions. It requires knowledge and experience in different software vendors and licensing metrics to be able to read and manage your SAM tool effectively. This is why it is important that you hire a SAM expert, either in-house or outsource the project to a third-party. Your SAM tool is just that: a tool, it will never be anything other than a waste of money if you don’t have someone who knows how to use it.

If We can Run the Software, it must be Properly Licensed

This would a nice scenario for an ideal world where every day is sunny but sadly, life and licensing, tend to get a bit messy sometimes and there are many scenarios that can leave you running software that isn’t licensed. There are many software vendors that will allow the installation and running of their software without a proper license in place, trusting you to know whether your software is properly licensed or not. Microsoft for instance, will often let their EA customers install software under the pretenses that they will pay for any missing licenses during the next true-up. For IBM, customers have the option of either licensing their software as Sub-Capacity and installing ILMT or licensing them at full capacity. If you do not have ILMT properly deployed over every piece of software that is licensed at sub-capacity and you do not have it licensed at full capacity, you’ll be smacked in the face with some massive penalties in the next audit. If you have your software properly licensed but then you move to the Cloud, your licensing metrics could change, and you could suddenly be missing licenses.

On the flip side, you could also have a license for software that you cannot run. We have often seen when using our Office 365 Consumption tool to evaluate our customer’s software licensing environments that they have licenses with blocked users that were unaware that they had licenses because…they couldn’t access Office 365.

Here’s the moral of the story: Don’t take the fact that you can turn it on and run a piece of software as any solid indicator that you’re allowed to do so.

Software Asset Management is Nothing but an Expensive Luxury

When it comes time for companies to pick which processes will be invested in, software asset management often gets the short end of the stick. It can often seem like SAM isn’t worth the money but when SAM is properly implemented the return on investment can be huge, for a number of reasons:

  • You pay what you actually owe in an audit, nothing more: we have often seen companies without a proper SAM process in place end up being forced to pay an overly inflated audit penalty (many times more than what they actually owe) and being unable to do anything otherwise because they do not have the data or licensing expertise they need to defend themselves.
  • Avoid Compliance Issues altogether: you know what is better than paying the minimum? Avoiding paying altogether. SAM can catch compliance issues before they become issues, which will lower your exposure during an audit, keep your relationship with your vendor in a good place, and lower your risk of being audited continuously.
  • Your Cybersecurity can benefit: savings aren’t the only area where SAM can provide your company with valuable information. With a software estate that is devoid of redundancies and untracked assets, your IT security will be able to effectively apply patches and upgrades throughout your system.
  • Cut Spending: Not knowing what is in your software licensing environment can easily mean overspending and wasted licenses which can be recycled and put back into the system.
  • Empower your IT Department: knowing what is in your software architecture will mean that you can make important decisions based off of that information like whether the software is worth the continual investment, if there is room for better software, or how you intend to reflect any expected growth for your company regarding your software spend. With the hard data that software asset management provides, your IT department can answer these questions with confidence.
 

Sure, software asset management might not be everyone’s cup of tea. It might be hard, tedious, and overwhelming but important things are often hard and having a clear understanding of what software asset management is and how it can better your company can mean the difference between watching your company flourish and watching it flounder under crippling software expenses. At MetrixData 360, our goal is to educate our customer base, so that they are not at the mercy of their software. If you’d like to learn more about how you can take back control, check out our other articles: What is Software Asset Management, and Beginner’s Guide to Software Asset Management.

About MetrixData 360

MetrixData 360MetrixData360 translates software licensing agreements into clear understandings and drives significant cost savings in audits and negotiations.