What is Software Asset Management & How to Get Started
Software Asset Management is the business strategy for reclaiming budget and maximizing savings by actively controlling and automating procurement, usage, and deployment of software licenses.
Wherever you are in the process of implementing Software Asset Management (SAM) in your business, this web page provides information to help you go further, quickly and easily. It will help you develop a vision for SAM at your company, partner with your stakeholders, and untangle the SAM knot for you.
Table of contents
- The Drivers of Software Asset Management
- 3 Key Areas to Succeed at SAM
- The SAM prime directive
- SAM Savings in Numbers
- Is Software Asset Management worth the time and effort?
- A million reasons why SAM gives you a competitive edge
- When spreadsheets are not enough
- 5 Reasons to do Software Asset Management
- How do I start Software Asset Management?
The Drivers of Software Asset Management
Software is more than just installations – it is the lifeblood of every company. With a Software Asset Management strategy, businesses are empowered to make better software licensing decisions that lower costs.
Ready to start now? Get the SAM Program Guide with all the information you need to get started:
Control costs, risks, and complexity with transparency
Get more mileage out of your licenses by knowing what’s in them and how you’re using them
Use SAM insights to lower licensing costs and save time
3 Key Areas to Succeed at SAM
1. Licenses: the SAM foundation
Licenses are assets that need to be managed. Each license contains specific conditions for how the software product can be installed and used. As a user, your job is to make sure your company is compliant with the terms and conditions of the license agreement.
Compliance is the bedrock of SAM. Software vendors don’t want you to use more software than you licensed. Even though SAM is much bigger than compliance, compliance is where license management becomes an essential part of your business strategy. And it’s the first goal for most companies when starting SAM.
2. Audits: a licensing health check
To check whether you are compliant, vendors will perform software compliance audits to see how their software is being used, how it’s configured, and whether your licenses cover all of it. There are two possible outcomes of an audit: either you’re compliant, or you’re not.
Non-compliance can result in unexpected fees, which, if you’re not careful, can cost you big. An audit also disrupts your business and can take months to complete without license management technology to support the process.
3. Optimization: strategies for lean licensing
Often businesses are over-compliant simply because they have more licenses than they need. They prefer to over-pay upfront to outsmart the audit risk. So, while they aren’t losing a ton of money at once for failing an audit, they are losing it slowly.
It may not hurt at first, but over time being over-licensed costs more than failing an audit. When you fail an audit, you buy just enough licenses to close the gap, and often vendors demand you pay back-maintenance for the licenses too. It’s expensive, but the problem is a one-time cost — that can also be reduced or completely eliminated with SAM strategies.
Companies who over-license to guarantee compliance also pay long-term for maintenance they don’t need. That adds up — and keeps adding up because the problem isn’t fixed.
Make starting a SAM program easy with the SAM Program Guide:
The SAM prime directive: Know your computing environment
The fraternal triplets: Discovery, SAM, ITAM
Before you can see whether you’re compliant, you have to know what you have. Discovery, Software Asset Management, and IT Asset Management (ITAM) are the key pieces of every IT business strategy. Planning for the future means knowing what you have right now.
You need to know what’s installed on your servers, the device relationships around virtualization, and how the installations are configured. Good discovery tools show you exactly what’s installed in your network from clients to servers.
Keep in mind that there’s no single discovery tool that can cover every software vendor. Your best bet is to use best-of-breed tools to find everything you can and get the data you need for a clean and accurate inventory.
SAM as part of a bigger ITAM or ITSM strategy
Central IT planning is a significant challenge in today’s business environment. Many large companies opt to decentralize, giving individual business units the flexibility they need to stay competitive. And while this is great for the individual business units, it can lead to unnecessary IT expenses. IT Asset Management (ITAM) and IT Service Management (ITSM) are the strategies for handling IT assets and IT services for a business. SAM is key piece of ITAM or ITSM.
Even in a decentralized environment, with the right discovery and SAM tools in place, central IT can keep software expenses down. By monitoring installations, usage, and configurations, central IT can make important purchasing and license allocation decisions. SAM tools can make managing even highly decentralized spending decisions easy without sacrificing essential flexibilities.
Expert Tip: Because central IT is working in a decentralized business environment, SAM tools must be able to handle this organizational complexity. A highly flexible roles & permissions feature is a must.
SAM Savings in Numbers: A simple use case
Business Unit 1 needs access to a word processing program for 25 of its employees, but before purchasing new licenses for Word, they check in with central IT. Central IT uses its SAM tool to see that Business Unit 2 has 45 licenses for Word, but they are only using 32. Following an automated process, central IT allocates those 13 unused licenses to BU1, and then purchases the other 12 that they need. By using SAM, central IT has saved the cost of 13 additional licenses and the related maintenance costs. Now, consider the savings for a company with thousands of employees and software products.
Is Software Asset Management worth the time and effort?
In a word: yes! Though many businesses often start their SAM programs too late, when they are facing an audit, or when they realize they are over spending on contracts. We’re here to help you along the way.
The experts all agree that SAM makes dollars and sense:
- Save 30% on license costs
- Get ROI in less than a year
- Reduce audit response time by 50%
- Automation saves time – up to 33%
So you can either manage your licenses like one of these folks:
Do Nothing Ned
Hope for the best,
then deal with the rest
A real SAM program can help you take control of your licensing destiny. Don’t hope for the best – make it happen!
Just over pay,
and it will be okay
Why throw money out the window when a SAM program can help you add cash back to your balance sheets?
Just count, and count,
and audits you’ll surmount
Don’t ignore what you can’t see. Architecture and configuration can have a large influence on your license demand.
Or you can do Software Asset Management.
A million reasons why SAM gives you a competitive edge
Keep communication lines open and be knowledgeable about your software licensing needs
Create more efficient and more reliable SAM processes that benefit IT end-users
Take the surprise out of your next software audit — or avoid it all together
Get Cost Transparency
Control costs and vendor negotiations with a clear view of your software estate
SAM is software vendor relationship management
Managing your licenses is the bedrock of good software vendor relationships. For many vendors, you will continue to license these software products for years to come, and your hope is that their products will innovate and provide your business more value.
But that can only happen if you’re in continuous and open dialogue with your vendors . Your feedback gives the vendors a concrete idea of what you need and how they can change both their software and their licensing schemes to meet your business needs.
If you know the terms of your license agreements and how you are using the software, then you’re in a better position to provide useful feedback to your vendors, making it even easier for them to respond to your business and organizational needs.
Rather than spending the talks at the negotiation table to find out about your compliance position, because you have to rely on the vendor to get this information. Get in the driver’s seat with SAM and spend these talks driving value out of your vendor relationship.
Ditch the spreadsheets
SAM is also about ease. Many organizations rely on spreadsheets to track their software licenses. This costly, time-consuming, and error-prone process can leave you at the mercy of your vendors in an audit. Even if your organization is small and uses just a few software products, without a SAM tool, it’s impossible to read all the licenses and apply the product use rights.
And if your organization is larger with many software products and complicated metrics tied to virtualization, then doing SAM with a spreadsheet is futile.
Spreadsheets are unreliable in an audit and cannot be used to develop procurement, allocation, and contract renegotiation strategies. They also cannot automate processes or keep up with a data center architecture than changes daily.
With a SAM tool, you’re always ready for an audit
Software vendors aren’t the big bad wolf. They have a contractual right to audit and to ensure compliance. They are trying to protect their business, like you do yours.
If you’re not building with brick, then you’re putting your whole business at risk. This is especially true for vendors like SAP that require customers to do annual self-audits. An audit can come at any time and without warning. It can leave your organization open to significant financial losses and also undermine investor confidence in the health of the business. You want to know in advance whether you’re compliant, and if you’re not, what measures you can take to become compliant before it’s too late.
Relying on spreadsheets is building with straw. A SAM tool can protect you from unexpected audits and minimize your exposure. With just the click of a button, you can have a complete overview of your compliance position. Know whether you’re under-licensed, and check your inventory to see whether you have spare licenses to help ease the pain.
With a SAM tool, you’re always ready for an audit. (Did we say that again?)
Control cloud software usage to protect your investment
Buying and installing software is easier than it’s ever been. There’s no need to involve IT, when you can download and start using the software from the internet immediately. But it can also lead to duplicate license purchasing and untracked expenses.
Use a SAM tool to control your cloud software spend. It gives you transparency for:
- what (cloud) software products, versions, and editions are used within the organization and on which devices and the device relationships
- licenses purchased and leased (SaaS) by the organization – including the terms and conditions of enterprise contracts, maintenance agreements, product use rights, and the license metrics
In turn, giving you the ability to easily control cloud spend.
Nothing is certain but death, taxes, and audits
Software vendors use audits to increase revenue. Complicated licensing metrics mean that without smart tools, you’re at risk for an audit. So even when you’re not purchasing new software or increasing your spend with a vendor, audits are a good way to get more money out of the customers.
Jump to the next level with our SAM guide
When spreadsheets are not enough
Licenses are easy to overlook
If your licenses were uncomfortable to sit on all day, you might pay more attention to them. But they’re intangible, and their terms and conditions only have an immediate effect on your business during contract renewals and audits. So they’re easy to forget about.
No one reads software licenses (but someone should)
Licenses are long, complex, and boring. Reading them is time consuming, and might require dual degrees in computer science and the law. Not something most of us have in our back pockets.
The consequence is that most of us don’t know what we’ve licensed. It means that we’re unaware of the limits of our licenses, but more importantly, we have no idea what we’re entitled to do.
A spreadsheet doesn’t know what’s in your licenses either. But the product catalog in a SAM tool does.
License metrics are complex
Each vendor has its own set of metrics for determining how to measure usage.
Here are just a few of the licensing metrics: Per core, Per device, Per named device, Per user, Per named user, Per processor (CPU count), Per processor value unit
In a complex environment with software products from a range of different vendors, it can be easy to lose track of how usage for each product is determined. This level of complexity cannot be efficiently managed with a spreadsheet.
Data Center architectures changes affect your compliance
Depending on the number of devices running the software, how it’s configured, virtualization, and the number of people or applications accessing it, a company’s licensing situation can be overly complex.
The situation is compounded by the fact that a company doesn’t run just one piece of software. A single company might use thousands of different software products, making it nearly impossible to get an overview with spreadsheets of who is using what, how often, and when.
Cloud-based software is not centralized
Because cloud-based software isn’t installed on a physical machine in your network, it can be difficult to know which business unit is responsible for the costs. In a large organization, sharing cloud software licensing can help to keep down costs, but without a clear overview of who is using it, when, and how often, business units may end up taking on an unfair portion of the costs, forcing them to allocate budget for resources they don’t use.
Data quality matters! Here’s why
To trust your compliance position, you need to trust the data it’s built on. Knowing what kinds of licenses to buy, how many, and with what usage rights requires good data. Without clean, high-quality data, you might end up with agreements that neither meet your business needs nor are the right fit for your environment.
SAM involves multiple stakeholders
SAM touches a lot of departments from procurement to human resources and various IT disciplines. All these departments need to get behind a single SAM initiative. That means a SAM project manager has to have a talent for herding cats. And for talking to different types of people with different needs and goals. That takes time and dedication to the cause. One thing is for sure, SAM is a team effort!
Create a great SAM program:
5 Reasons to do Software Asset Management
1. Cost savings: Like winning the lottery
With a full overview of your environment and your software needs, you know exactly what you’re using and exactly what you need. So you purchase the right licenses from the start, saving you money on maintenance fees, and helping to ensure compliance. In fact, you can reduce your licensing costs up to 30%.
Never sign up for an expensive enterprise agreement again just to cover your bases. Instead, negotiate an agreement tailored exactly to your needs. It will maximize your software resources and keep your costs low.
Want to see your SAM savings? Make it easy:
Grab the SAM Savings Calculator.
2. Time savings: License management, lightning fast
Organizing your licenses and setting up SAM processes will save you time:
- Have a central database of your licensing terms and conditions, making it easier and quicker to get the information you need to make better software purchasing and IT budgeting decisions
- Be able to respond to audit letters within days instead of weeks
- Transparency means you can respond quicker to problems, sometimes even before they arise
Our software inventory covers over 1,500 items from more than 100 software publishers. We’ve been able to increase the productivity of the employees in software purchasing by 10%.
Thomas Stange, Head of License Management Department, BITMarck (Healthcare Service Provider)
3. Automation: No more heavy lifting
Nothing says effortless like automation. Automating your processes frees you up to concentrate on other things. With alerts and regular reports, you don’t need to spend time watching out for problems and looking for areas to save.
Just to name a few examples a Software Asset Management tool can automate:
- Alerting you to over usage and non-compliance
- Informing you about high-risk configurations
- Suggesting optimization options
- Filling software requests with existing licenses
- Simulating your data center architecture and the resulting licensing costs
4. Software License Optimization: Make smarter decisions. Reap the benefits.
When you know what you have and use, you can go beyond compliance. You can compare your licenses. See what license schemes are possible and make the most sense in your environment—while easily keeping an eye on cost.
You can negotiate better agreements that meet your business needs at a killer price.
Or have you wanted to optimize your software portfolio, cleaning up unauthorized products and packaging software for deployment? With SAM you have the data and transparency to do this.
5. Strategy: Plan ahead. Watch the competition follow.
SAM gives you transparency into your current and past software needs. This in turn gives you valuable insights into your software future. It can help you plan in advance on multiple levels from data center architectures to budgets and service-charging. There are strategic benefits for every department in the company.
Make better long-term licensing decisions, cut costs, and develop licensing strategies that make your environment more flexible and agile.
Get started with the SAM Program Guide
How do I start
Software Asset Management?
8 steps to do license management:
1. Document and standardize your procurement processes
- Know who and how each business unit buys software licenses
- Define standardized processes and rules for license procurement
- Establish standardized processes for storing licenses and license certificates
3. Catalog your software
- Use discovery and inventory tools to find out what software is actually installed in your environment
- Normalize software titles to make sure you can match a license to them
5. Determine software usage
Find out when a software title is being used and how it’s installed (or not e.g. cloud), configured, and accessed.
7. Keep updating your license and software inventories
- Look for licensing models that best fit your software usage habits and IT environment
- And keep tracking usage to maintain compliance
While continuously updating:
- Software titles - as users download new software, upgrade programs, or enter the cloud
- The software usage and IT environment data
- The license inventory to track contract milestones, and capture new purchases and changes to licenses like upgrades or downgrades
2. Clean up and organize your license inventory
- Create a central license inventory (if you don’t already have one)
- Move all licensing agreements and software maintenance contracts to the inventory
- Establish an organizational system (responsible people and processes) that allows you to locate licensing documents and information easily
- Learn what your license metrics are to measure the licenses you need
- Appoint a license manager to administer/maintain the your inventory
4. Inventory all of your systems (Don’t forget open source systems!)
When cataloging your software, it can be easy to miss things installed on systems not currently running or not currently hooked up to the network.
- Install discovery tools on all systems, so you don’t miss anything
- Inventory open source systems (like Linux) because while the OS might not need a paid license, it might still be running software that does
6. Measure how many licenses you need per software usage
Once you’ve cataloged your entire system and recorded usage data:
- Go back to your license inventory and make sure that your licenses cover all of the ways in which the software is installed and used
- Apply product use rights to get the full value of your licenses and save costs
8. Manage your licenses more efficiently
The results of your SAM process and data transparency will allow you to use your licenses more efficiently:
- See where you’re over- and under-licensed. Then reallocate your available licenses to cover your needs, saving you money on new licenses and reducing audit risk.
- Don’t forget maintenance! If you’re not using a license, then don’t forget to cancel the maintenance contract.
- When contract renewals come up, use your SAM insights to negotiate better agreements for your company.
Here’s more help to get started
Software Asset Management isn’t hard if you know what to look for. The free SAM program guide provides an overview of what you need to consider and do, to launch an enterprise SAM program. Start SAM right. Get the SAM program guide:
Lead your SAM initiative. Prepare yourself for the most common obstacles Software Asset Managers face in getting their SAM program off the ground. And arm yourself with strategies for overcoming them. You have a problem: We have a way to solve it.