Jun 25, 2019

3 Non-Negotiables for Building your 21st Century SAM Team

Let’s be honest with ourselves. Software Asset Management is changing.

Gone are the days of annual software renewals for server infrastructures that have been stable for the past 3 years. No more quarterly true-ups for a user estate that is easily monitored by offline reports, sent to you every 2 months. Instead, every month, even every week, there seems to be a new IT project popping up, that requires more licenses from a new vendor that has promised to deliver the benefits of digitalization to your company.

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So how did we end up in this mess? Why is there more pressure than ever from both the publishers and our internal stakeholders? Didn’t they advertise that digital transformation will make our lives easier?

Agile IT and the Digital Revolution

Of course, I cannot fully answer such broad questions in the scope of this blog post, but I can name an aspect that accelerated IT as corporate companies live it today. It’s agility. The agile way of thinking has found its way into mainstream IT management and the cloud has accelerated this methodology.

It goes without saying that many areas of IT have been impacted by cloud computing. Trial and error approaches to application building, providing the end user with a solution that is in production very early, and enriching it with more functionality later through feedback loops, have been leveraged by the cloud. Or more specifically, through the on-demand availability of any services such as IaaS, PaaS, DaaS, PaaS or any other XaaS you can think of.

Flexible cloud services and solutions

Projects can introduce and test new solutions, be it a custom application running on an EC2 cloud server on Amazon Web Server (AWS) or a new digital marketing tool that automates campaigns based on AI data analytics. If the tests are successful and the end user likes it, the application can go into operation. If not, the prototype can be scrapped again.

On-demand IaaS allows you to use infrastructure without your company having to invest in additional hardware. On-demand SaaS can be tested for a couple of months and decommissioned again. Of course, there are contractual commitments between the involved parties, but let’s ignore this fact for the time being.

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Managing your joiners, movers, and leavers

Employee turnover is increasing globally. Employees have never changed jobs more often than today. Estimates of annual Sales turnover in the US are as high as 27%.

Why does this impact Software Asset Management? Because a lot of employees are assigned SaaS subscriptions. And a lot of those SaaS subscriptions are named-user subscriptions assigned to employees. If a company is lacking proper management oversight of such subscriptions – or not using SaaS management tools, it can become expensive in a very short time. Here’s an example:

  • Consider a company with a sales team of 10,000 employees. Every sales employee is assigned a SaaS subscription to do his/her work. The subscription costs $100 per month. The annual spend on your Sales team’s infrastructure will be $12 million, annually.
  • Imagine this same company’s sales employees had a 20% turnover rate, meaning that 2,000 sales employees come and go over the course of one year, or 166.67 per month on average.
  • This means that each month, SaaS user accounts worth $16,667 become accounts that are not used anymore because the person has left the company. These are what we call Zombie accounts.
  • If the company does not properly manage the subscriptions, it sits on $2.4 million of unmanaged account costs that are assigned, but not in use anymore.

So, where does this leave us, as Software Asset Managers? How should we react to this trend of agility? To keep up with the new tempo of IT, you’ll need to monitor your software spent and integrate SAM into the digital services you are managing.

3 tactics to bring your SAM toolset up-to-date

  1. Live data is key for cloud Software Asset Management. To be able to react to ad-hoc reporting requests and to monitor your subscription software, a live integration of your Software Asset Management tools is crucial. SAM needs to follow the path of digitalization. Integrate wherever possible and avoid offline csv reports that first need to be restructured and then uploaded to the destination SAM tool. This minimizes the admin effort and ensures your compliance reports are always up to date.
  2. Integration opens the door to proactive license management. In the past, SAM has been a relatively passive IT function when it comes to direct interaction with end-user applications. Traditionally, cost-saving software license optimization measures have been developed within a SAM organization, but then communicated to the responsible application manager. A live integration gives the opportunity to implement new processes that allow you to proactively optimize your license estate (eg. deactivate user accounts if they are not in use anymore). This can have a direct impact on savings or cost avoidance.
  3. Be the nexus of IT. In the blog article, Gartner Best Practices for Cloud Cost Management, an illustration from the 2018 Gartner report, “Software Asset Management for the Cloud: Consumption Management and Optimization Take Center Stage” depicts SAM at the intersection of all digital services used within a company. This is most relevant because in my opinion, it shows that SAM, if done the right way, is the heartbeat for every IT function of the future – where digital service spent is managed. And to keep up with the management requirements, a direct integration with digital and cloud services is paramount.

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Building your 21st Century SAM Team

The function of Software Asset Management is changing rapidly and must adapt to agile new challenges. On the other hand, the development of the IT industry provides new opportunities for SAM, especially in the cloud.

Digital compliance, risk and cost management have evolved into a multi-functional discipline that I see very much positioned in Software Asset Management. The instrument to manage the cloud spend is a SAM toolset that integrates with the cloud directly. And there is a lot of spend to be managed. Last year alone, worldwide IT spending was estimated be about $3.7 trillion. That’s a lot of money to go unmanaged.

Topics: Cloud, SaaS, SAM Insights