Software Asset Management: How do you select the right tool?
Software Asset Management (SAM) is becoming increasingly important, especially for large and medium-sized companies. It’s obvious that by limiting financial risks and above all, cutting costs, a good SAM approach can quickly save organizations millions. This article explains how to select the Software Asset Management tool that best suits your organization.
Software Asset Management is focused on understanding what software you have, what software you use, and the associated cost structure. The mapping of this software infrastructure is a complex process. A good SAM tool can help with that – as long as you choose a tool that fits your organization and situation. This is different for every company, since each organization uses different (combinations of) software from multiple vendors, each with their own terms and conditions.
There are different SAM tools on the market such as: Snow, Flexera, Landesk, iQuate and Matrix42, each with their own expertise and characteristics. Although you can automatically collect a portion of the required data, no SAM tool can determine your complete license position on its own. Tools are a great help when it comes to collecting parts of the information you need, but for the most part, you are dependent on specialist knowledge and expertise that you get from other sources, such as this picture illustrates:
Many organizations underestimate the acquisition of a SAM tool. They blindly buy a tool only to find out later (e.g. during an audit) that it does not meet their actual needs. For example, the tool provides a particularly good picture of a software product that only represents a small part of the total software expenses and but doesn’t provide the same level of detailed information for the product that has the greatest financial impact. Such a poor choice usually results from organizations believing the vendor with the best sales pitch rather than involving people with the right knowledge in the acquisition process. The focus is on the short term: how much does the tool cost? Instead, the focus should be on the long term: what do I need exactly and what will be the long term benefits?
In order to ensure that a SAM tool will actually be effective, a thorough evaluation prior to the purchase is crucial. A preliminary study begins with identifying the software vendors within your organization (e.g. Oracle, Microsoft, Adobe, VMware, Red Hat, IBM) and the products you have purchased from these suppliers (e.g. Oracle Database, Microsoft SQL server, Microsoft Office, Adobe Photoshop). Based on an internal analysis of the annual software expenditures (opex analysis), the software investments (capex analysis) and contractual definitions agreed upon with the software vendors (contract analysis), you can determine with which requirements your SAM tool should comply.
With an opex/capex analysis you determine how much your organization has invested in different software vendors and/or products and how much you spent on them on an annual basis. The investment in a particular software vendor and specific software products indicates where to focus your attention. If you have invested a relatively small amount in a vendor and usage of their software is fairly limited, you should ask yourself whether this vendor merits a high priority. The vendor with whom you are spending most and therefore has the highest priority, carries the most weight when choosing a SAM tool. After all, this is where you will find the biggest savings opportunity (as well as the highest risk).
Through a contract analysis you want to understand the general conditions (e.g. who can make use of the software), the specific software product conditions (e.g. what software products/ components/ features you are and which ones you aren’t allowed to use) and the usage conditions (e.g. how much you are allowed to use) that apply to the various software contracts. Once you know what contractual terms you need to manage in order to avoid financial risks and which conditions need to be taken into account in order to achieve savings, you can determine what kind of data needs to be collected through the SAM tool.
Selecting a SAM tool depends on several factors and is different for every organization. To illustrate, here are two simplified examples.
Organization A has 3,000 employees and purchased software from Microsoft and Oracle. The desktop software has been bought exclusively from Microsoft (e.g. Office) and for server-based software an ‘Oracle unless’ policy applies. A total of two physical servers use the Oracle Database Enterprise Edition, which is licensed based on processor metrics. For the Microsoft Office licenses they opted for a Server + CAL model. The number of persons that have installed the software on a desktop/ laptop, determines how many specific Microsoft Office licenses are required.
This customer only has Oracle installed on just a fewenvironements. Combined with the fact that the organization haspurchased a Processor-based licensing model, the risk with regard to Oracle is limited. Only when the company changes its hardware extra attention is required, because other hardware specifications may apply. However, this usually happens only once every three or four years.
The risk is higher for Microsoft, due to the fact that the organization has a high employee turnover. New employees are joining continuously, so it is important to keep a good overview of the Microsoft products because they have “user-based” licenses. Best decision for organization A is, therefore, to choose a SAM tool that gathers complete and accurate information for Microsoft Office products at desktop level.
Organization B has 30,000 employees and purchased software from Microsoft, Oracle and Google. The desktop software is, for the most part, handled by Google in the cloud. For server-based software an ‘Oracle unless’ policy applies. A total of 1,000 physical servers use Oracle Database Enterprise Edition, which is licensed based on the ‘Named User Plus’ metric and 10 servers using Microsoft SQL, licensed on a processor-based metric. The advantage of the Google model is that it is cloud based and the customer pays a subscription fee for the number of people actually using the Google software.
This customer has only two environments on which Microsoft SQL Server software is installed, but a large number of servers running Oracle Database using a “Named User Plus” model. With this Named User Plus model a minimum of 25 Named User Plus per processor applies. Therefore the organization needs to take the number of users of the hardware on which the software is installedinto account. Thus, the customer runs a higher risk for Oracle Database Enterprise Edition than for Microsoft SQL Server, and the emphasis in selecting a SAM tool should therefore be on Oracle.
The examples above show the value of a thorough investigation prior to purchasing a Software Asset Management tool. Do not waste time, money and effort on a solution that does not meet the requirements of your organization, but choose a tool that collects the information you really need. And remember: the purchase of a SAM tool is just the beginning. Software Asset Management is not a one-off thing, but an ongoing process — not dissimilar to financial accounting. The automated collection of information through a tool is a good first step, but a strong SAM strategy contains multiple aspects such as a thorough study of the contracts by experts and the monitoring of software usage. After all, gathering the required knowledge and insight leads to the ultimate objective of mitigating financial risks and reducting cost.
Richard is one of the managing partners at B-lay. He started to work in the license management industry in 2004 and worked for almost 10 years at Oracle as regional director of compliance. He uses his knowledge of enterprise software vendors (such as Oracle, SAP, IBM and Microsoft) to educate, equip and enable software end users in their challenges regarding proper software license management. Richard holds a master’s degree in IT, from University of Amsterdam in the Netherlands.