Why SAM (Software Asset Management) is more relevant than ever in this changed world of ours!

A lot has changed since the bleak winter of 2020, some due directly or indirectly to the horrific pandemic. Some changes where perhaps already waiting in the wings, but put on hold or perhaps increased by the world events of late. Anyhow, at its core IT/Technology is in a state of constant change, which is something that all experts, thinktanks, corporations and authorities agree on; IT/Technology will only change more and even faster in the future.

It can be hard to tell cause from effect, at least while the changes are still happening around us, but this text an attempt to highlight 5 SAM observations we’ve seen over the last years. Also, in that light ask if SAM is still a relevant practice in the age of software as a service (SaaS), Cloud, Hybrid and subscription licensing.

These observations have been generated by anecdotal information gathered from Nordic corporations and government agencies through conversations and from my talented team of consultants with decades of experience in the field of Software Asset Management.

5 Observations about SAM and it’s relevance

  • The perception is that the focus of SAM has changed.
    • More focus on digitalisation and other more pressing matters (survival in some cases) are of course strong drivers of the change. In addition, when speaking to customers, we found that there are no fewer SAM positions, but its clear that the area of responsibility, the job titles and organizational belonging has somewhat changed recently.
      • Increased responsibility and scope. As now SAM is almost certain to include parts of multi-cloud management, in addition to global assets and data centre services, whether the customer intends to or not. The scope might also be broadened to deal with licensing challenges like BYOL, open source and trade in licenses. The bigger question is therefore how do you achieve the full picture of software consumption, cost & risk in the organisation, when the responsibilities increase or change?
      • SAM job titles are as always more future oriented regardless of the actual split of work. The cloud part of the title is then more tantalizing than just asset..and good ole’ management of these software assets. Asset managers can now be called cloud governance leaders, software advisors, asset intelligence managers and is this becoming a normalised part of the software & cloud management.
      • Organisational belonging. SAM traditionally is attached to a technical or a purchasing unit. Cloud on the other hand is more often closer to ‘lines of business’, ‘development’ and ‘dev/ops’, and recently that is where the cool kids tend to play. That the business is more involved in software now is a great step forward, given where accountability lie is clear and formally agreed. We have not yet seen many cloud management functions reside or governed by a classic SAM team.
    • Software as a service versus software on premises
      • A Data Centre (DC) is a DC regardless of where it actually is located, but at times in the business area there is less expertise to review the license implications by changes in technology, or opportunities to reuse/negotiate around previous purchases.
      • There are great tools & methods for measuring, and to measure all you have before a cloud move is essential. Still there are examples of where this assessment is not undertaken thoroughly enough or during too short a time span, giving inaccurate or incomplete data for the analysis. This can be very costly and set the wrong expectations for a cloud migration.
      • Is your move a ‘like-for-like’ box shift cloud migration or a transformation modernizing your architectural setup? A solid approach is to focus on migration first, then transform but success can of course be achieved by attempting both.
      • Question we ask is: ‘Once the majority of your organisations technical services and software are in the cloud, who is looking at the most cost-effective way to utilize it?’ Some organisations are great at reshaping itself and its technical requirements; others are not.
  • Sourcing of software (services) is now done in different ways.
    • The act of purchasing IT has moved from hardware to software, from on prem & perpetual to subscription & cloud services, providing immense resources at your fingertips. This change has impacted the roles and their respective ‘power of purchasing’ from a traditional and policy-controlled environment to a business driven, open and agile acquisition that has not yet ironed out all the kinks. Not disputing that the cloud services available are faster, better and more flexible. However, if it is cheaper for the end consumer once all costs have been accumulated, is not set in carbon nor stone!
  • The Long Tail is a growing concern that is not addressed by cloud migration.
    • The Long Tail (see picture 1.1), especially niche software products, on prem as well as SaaS, represents both significant cost and risk, but less so than the top (10). The software vendors has often much lesser interest attached to it. This area is usually a pain to manage, but also pays to get right, and remove the non-essential titles over time. A mistake is to assume that cloud migration removes most or all of these. This software could be critical or essential to the organisation, and to get that management right that takes knowledge, discipline and effort. Top tip is to get someone with an incentive and right skills to manage, control and decimate these. Can be hard to do in-house as this is not building the future and these skills are seldom cost effective to keep, in addition the risks are comparatively small compared to the cost. Worth mentioning is many businesses are obligated to keep some ‘long tail’ software on prem, even in a SaaS/Cloud first scenario. This means it is essential to ensure they are managed well, from a security, cost and utilisation perspective but also data (GDPR for example) and license compliance.
    • Picture 1.1
  • The subscription license economy is making it look easy to be compliant.
    • The constant drive towards subscription software (thus subscription licensing) is making it look much easier to manage compliance, but not necessarily easier to see, understand or manage the true cost and risk. Example like in a tenant wide cloud scenario where it de facto IS much easier to manage the subscriptions and allocations. BUT this can also drive costs that are not that easy to see immediately. The subscription economy is also having another impact, by allowing the thinking that one year is no huge commitment (compared to perpetual licenses or 3 years as examples). At times it can be easier to ‘just renew this time only’ when there has not been a thorough review of business value, the actual use and these annual renewals can keep running for many years, accruing unnecessary cost & risk unchallenged.
  • Audits are still an ongoing concern, but to a lesser extent than 2 years ago.
    • As per the new ways to consume and measure use of software, like subscriptions, this should logically yield fewer vendor audits. And if I may put my neck out, the long tail (on prem) software seldom has a great business case of tying up their customers time and building bad-will through audits, but that will not stop certain vendors to pursue this avenue. Over time, this model will likely negatively impact the inclusion in cloud solutions and bundles, and the increased ability to swap out software components will make the audit method for improving revenue less attractive. A saying I favour is: ‘Don’t fear audits, fear being incompliant!’ Primarily because incompliancy highlights potential shortcoming in the management of key resources used for your business.

Summary:

Old traditional Licensing (on premises and niche products) is in our opinion not going away anytime soon, but it’s becoming a thorny issue for many organisations. The issue requires strategic decisions on how to deal with it, by outsourcing the management thereof OR remain able and willing to do it yourself. At any rate a SAM skilled resource is required to manage it well.

A datacentre resource (say a virtual machine) in the cloud is largely the same as in your own DC in the basement of your building. Principal differences are that once this was managed through the whole lifecycle by your own or outsourced personnel, who had to understand usage, the business case, manage purchasing of it, implementation, and maintenance to end of life, often with full accountability for it and associated costs. This was a long and cumbersome process in many cases. Now the purchase and commissioning of a complex resource in an even more complex hybrid environments is done in minutes. This is great, but the costs are at times hard to gauge beforehand and in context tough to manage retroactively. Another more positive difference is that much of the surrounding and enabling technology and features, comes included from the start like, Access controls, Security and Compatibility as examples. Aware that there is a leap from cloud infrastructure to actual software, but in this way of looking at it, as always, the point is to keep track of the licensing and cost implications of any infrastructure changes. The overlap of cloud infrastructure and software licensing is where SAM has room for improvement and many of the best SAM professionals that I know are right now ensuring their future relevancy by upskilling and broadening.

The act of purchasing IT has moved and this change has impacted the roles and their respective ‘power of purchasing’ from a policy-controlled environment to a more business centric and flexible acquisition practice. That the cloud services are faster, better and more agile are not up for debate, the costs can be, and that in turn is highly dependent on a solid initial assessment and accurate expectations.

Concludingly, the activity of ensure cost effective software & therefore licensing, is going to become more and more about SaaS, Cloud & Subscriptions. But to reap the rewards, the management of software still needs good tools, measurements, knowledge, diligence and discipline, just like SAM (on prem) decades ago….so the need for skilled resources to ensure cost effective control of software is not going away any time soon. Therefore, a solid case for SAM still being as relevant as ever, in this constantly changing industry of ours, can definitely be made!

About Christian Bjorkly-Nordstrom

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