Large Acquisitions Highlight Importance of Software Asset Management

Enterprises require a multitude of software applications to run business. Everything from providing internal employee services digitally to creating unique customer experiences requires software. Managing all of this software can quickly become expensive and overwhelming.

Imagine that one of your company’s primary software publishers just got acquired by a larger company. What does this mean for the future of your software?

When a software company is acquired by a larger enterprise, it is impossible to predict what changes are in store. For example, Broadcom recently acquired VMware  and customers are facing a slew of major changes.

As part of these changes, individual products are now only available as part of a bundle. Less features are included in entry-level packages, meaning customers must upgrade to more costly  bundles for necessary functionality.

This bundle-based model means some VMware customers will pay for unused software for the sake of maintaining access to features they currently use. How can your organization avoid this precarious situation?

It’s important for organizations to have a software asset management (SAM) practice. This means maintaining an accurate record of all installed software. Keeping track of the software throughout your IT estate ensures you are informed about existing investments. Instead of wasting time tracking down which software your organization uses, an inventory can help you can make quicker decisions. In the case of the VMware scenario, it helps to know which software your company actually uses to help you decide which bundle, if any, is most cost-effective.

Most enterprises deploy SAM tools to efficiently inventory software. These tools automatically detect unlicensed software, helping enterprises maintain compliance to licensing agreements. SAM tools also track usage, which can inform cost-cutting decisions by revealing unused licenses or underutilized applications, commonly referred to as “shelfware.” Additionally, SAM tools have reporting and analytics features that can generate reports for software audits and provide insight into software spending.

As useful as they are, SAM tools are just one piece of an effective SAM strategy. Establishing a SAM program in your company can maximize benefits and ensure you are not overrelying on any one tool to make important decisions. A SAM program consists of a set of practices and processes designed to effectively manage an organization’s software (and SaaS) assets throughout their lifecycle.

Determining who is responsible for SAM varies depending on an organization’s size and structure. In large enterprises, there might be a software asset manager or IT asset manager. Larger enterprises are also likelier to leverage an entire SAM team with analysts and specialists. In smaller organizations, SAM oversight can fall under an IT director, another IT manager, procurement specialist, or application/product owner. No matter the organization size, a SAM program facilitates working cross-functionally with compliance officers, security officers, procurement managers, or legal counsel.

A SAM program should encompass activities such as:

• software inventory management;
• license tracking;
• license optimization;
• software license compliance audits;
• and vendor management.

In addition to finding tools that help an organization effectively perform these activities, it’s important to establish policies and governance. This means establishing control over software assets and creating processes for procurement, deployment, maintenance and retirement. Training and awareness efforts to communicate to other employees about software usage policies is also a key component of SAM to help prevent security issues. 

Benefits of establishing a SAM program include cost savings by avoiding unnecessary purchases and non-compliance penalties, risk mitigation by controlling software usage, improved relationships with software vendors by providing a clearer picture of software assets, and improved IT security by ensuring that software is up-to-date.

An organization with good SAM practices is better prepared to handle sudden changes that might occur with a software publisher. You never know when a merger or acquisition will shake things up, plus the rise of Software as a Service (SaaS) can make it even more difficult to track all the details of software licensing.