Software Asset Management

SAM is critical to managing an IT environment because effectiveness is seriously compromised when an organization doesn’t know what software assets it has, where they are located, how they are configured, and how they are used or by whom. The implementation of many IT processes—such as configuration, release, or change management—is dependent on the organization having accurate knowledge of its IT assets.

The pace of technology innovations will continue to present new challenges to achieving effective software management. Two current examples of these challenges are virtualization and open source.

To the many already-existing challenges of achieving effective SAM, virtualization adds a degree of separation between software and hardware, and introduces dynamically changing configurations that are arguably more difficult to track and manage from a license compliance standpoint. Another example is open-source software, which creates new challenges for effective software management.

With respect to open source, organizations may lack one of the key ingredients to achieving effective software management—specifically, the need to comply with software license agreements. Those organizations may operate under the incorrect assumption that because the base licenses are free they do not need to be managed. In fact, while open-source software still has compliance implications from maintenance and support standpoints, effective software management is also critical for IT operational reasons that have nothing to do with compliance.

License compliance is an important aspect of SAM, however. A mature software management strategy can enable organizations to gain the greatest benefit from software license agreements, which are taking an ever-increasing share of IT budgets. An accurate understanding of license entitlements and deployments allows companies to negotiate with software vendors from a position of knowledge and often avoid paying for unneeded software. In 2007, KPMG conducted a survey3 of software organizations to see how much revenue they might be losing due to inefficient software licensing oversight. One finding of that survey was that organizations have significant business incentives for determining if they are in compliance with their software licensing agreements. Overdeployment of software can cost organizations millions of dollars in unplanned expenditures.