Sep 27, 2016

Claiming your Share of the $332 Billion Dollar Pie

The Gartner IT Financial, Procurement & Asset Management Summit 2016 took place last week in Grapevine, Texas. This year’s theme was “The Art of Influence: Optimizing Costs and Leading Transformation”. This motif – illustrated in the keynote presentation using cinema as a metaphor – ensured that delegates “learn what’s required to create and sustain a culture that drives growth, agility and business value, expanding their sphere of influence to emerge at the forefront of business transformation”.

There were 4 focused tracks, as well as Contract Negotiation Clinics:

  1. Meeting Demand Through Operational Best Practices
  2. Optimizing Costs and Negotiating Effective Contracts
  3. Decoding the Complexities of Cloud
  4. Leading Transformation in the Digital Age SAM speaks up

The Summit examined all sides of IT asset financing – from a procurement perspective (negotiating and contracting) to a management perspective of those assets. Vendor relationship management was also a key area of attention.

With an anticipated $332 billion to be spent worldwide on software in 2016 – a 5.8% increase from 2015, it’s more apparent than ever that a dedicated Software Asset Management (SAM) solution needs to pull up a big, comfy chair to the IT Financial conversation table. Thinking beyond compliance, forward-thinking companies are evaluating how they can realize strategic cost savings by leveraging innovative license optimization techniques, and critical negotiation positioning.

SAM needs are rising

Overall, the show was well attended and represented industries across all verticals.

In terms of SAM, we found that a large portion of SAM managers are still using some iteration of a Manual/Spreadsheet method. Not surprising at all, considering the 2016 Global Practices of Strategic SAM Market Study, cited similar trends. Out of 400 respondents, 78% still don’t use a dedicated SAM tool, leaving them vulnerable in the case of an audit. Not to mention, overwhelmed by trying to stay on top of constant changes in their IT and software environments.

Traditionally mainly only large companies have been interested in software license management. However, we spoke with several companies with <1000 desktops who had been audited, or were interested in managing software compliance using a more automated platform. It seems there may be a shift in the market pushing concern for risk mitigation and potential savings at the forefront for companies of all sizes.

Everyone we talked with felt exasperated by that manual process – and ready to find a solution. The people assigned to the task of managing their SAM environments were often the people who admittedly “drew the short straw”. Eager to discover and implement an automated solution that will “get this mess off of my plate”, and allow them to re-focus their time on more productive tasks. We heard this same story repeatedly over the 2 days, across industries. They all have the same pain.

What else drives a SAM solution?

Sometimes we don’t just clean up our rooms – or get organized – out of the goodness of our hearts. Besides sheer exhaustion, another common external motivator for those looking at automated SAM solutions is mandated by the legislation of “government regulatory compliance” or GRC.

A big part of why companies need to deploy a SAM process is fueled by the Sarbanes-Oxley Act of 2002 (SOX) which requires public companies to have “an auditable, repeatable process for identifying all of the assets within their environment”. The quarterly reports for public companies must be signed by both the CEO and CFO, indicating that they know where all of their assets are, how much they are worth, and that they can find them again with a repeatable process capable of being followed by their audit firms.

This legislation spawned a whole new urgency for SAM. Built to legislate Federal Agencies, it will be interesting to see how the MEGABYTE Act (Making Electronic Government Accountable By Yielding Tangible Efficiencies Act of 2016) affects the SAM landscape. Passed on July 29th of this year, it promises to cut the Federal Government’s annual $80 billion IT budget by as much as $4 billion a year by license optimization and improving management of software in government. As a side note, you can read more about initial reaction to this landmark policy in a blog post by SAM Evangelist, Bill Talbot.

Becoming a SAM superhero

Aspera Co-founder Christof Beaupoil led a presentation on advanced optimization capabilities within a structured software license management program. Five key techniques to increase transparency and maximize savings were detailed such as Metric and License Optimization, Benchmarking, Simulation and Contract Negotiation. By using these advanced tools to improve compliance and cost optimization, SAM programs are prepared to meet the complex challenges of today’s dynamic digital landscape.

Using real-life examples, Christof discussed how market leaders in a variety of industries have successfully implemented an integrated approach – achieving instant ROI, deep data center savings, and improved negotiation position. In one case study, Christof chronicled the impact that SmartTrack License Control for SAP provides for complex SAP environments.

He described how a global medical technology company with over 45,000 employees across 50 countries was able to realize enormous success leveraging this technology, combined with customized negotiation consulting. In this particular case, approximately 45,000 in named licenses were redistributed, and their license portfolio was reduced by 70%. This customer identified $8-10 million in potential savings – and $1.8 million in annual maintenance savings.

What’s next for SAM?

In July of this year, Gartner proclaimed that the savings potential achieved through automated software license optimization is simply too large for organizations to ignore. On average, companies can expect to cut software costs by 30% with the implementation of a SAM tool. According to Gartner, organizations can cut software spending using three best practices:

  1. Optimize Software Configurations
  2. Recycle Software Licenses
  3. Use SAM Tools

Sourcing the most appropriate SAM solution for your organization can be almost as complex as your internal SAM challenges. At Aspera, we focus on the power of our experienced team to assist customers before, during – and after implementation. SAM is indeed never simple, but the right SAM platform will simplify your license management, and release you from the tangled web of manual software asset management from which too many organizations still struggle.

Topics: SAM Insights, Industry Events

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