Software asset management: What you need to know

The payoff from software asset management makes it worth serious investment.


Software asset management (SAM) automation and optimisation are goals of many advanced IT organisations.

The reasons for this are reduced costs associated with software license purchases, renewals, and IT asset management labour.

Effective SAM processes also reduce the cost and risk of software vendor audits. Automation is the key due to the incredible complexity involved. SAM requires the collection and analysis of a multitude of pieces of data, including hardware and software inventory, application usage data, purchase orders, license agreements, and maintenance contracts.

License rules, including product use rights, are not only complex, but also constantly changing. Virtualisation and other IT technologies further complicate the license management process. A manual SAM approach has become intractable and will miss significant cost savings opportunities.

But how big is the payoff? Is it really worth the effort to implement an automated SAM solution? And where do these cost savings come from?

Analysts estimate that 30% or more of IT budgets are consumed by software license and maintenance costs. By automating and optimising the SAM process, organisations can maximise software utilisation, reduce the risk of non-compliance (audits, fees, penalties), and reduce software license and maintenance costs by as much as 15 to 30% per year. For a medium to large enterprise, the savings can be in the millions of dollars per year.

SAM complexity—let’s count the ways

The first order of business from a SAM perspective is taking inventory—what’s installed in your IT environment. Many inventory and configuration management tools exist and they collect a lot of data.

The difficulty comes about when trying to make sense of all that data— on the hardware side of the ledger there are, among other things, processor type, speed, and number of cores, all of which can impact your software license position, depending on the license model involved.

On the software side there are add/remove program data, file evidence, registry and installer evidence. There are literally millions of pieces of raw data. What’s needed is an “application recognition library” that can translate the raw inventory data into an actionable list of software titles, with publisher and version information.

With installed hardware and software lists in hand, the next step is to collect purchase order data. This will begin to establish your entitlement to the software. What did you buy? How much did you buy? The purchase order typically contains a stock keeping unit (SKU) number for each line item.

The SKU identifies exactly what you bought. In the case of software, the SKU defines the application title, version, edition, and even the type of license and maintenance agreements that cover this software. Without looking at the SKU’s, it’s very difficult to know what you bought and match it to what’s installed in your IT estate. A SAM tool that utilises the SKU information can automatically match purchases to installed software.

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