Don't be afraid of SAM — Part 1

Companies, public authorities and other institutions employ computers with many software packages installed. To gain and maintain a structured overview for an unambiguous licensing is not an easy matter for the IT departments. Who strives to meet the IT compliance requirements of software vendors and auditors, and also wants to use the licenses in a resonable and economic way, requires an efficient solution for software asset management (SAM). Our network discovery software LOGINventory5, designed for the hardware and software inventory in Windows networks, integrates a practical license management, meeting the key requirements of your software asset management.

We ask our business partners on a regular basis if the software that is used in their operations is already actively managed by an IT-backed license management or if they at least plan to do so. The range of responses extends from "Yes, because we need to save costs and resources!" over "Sure, we do that twice a year!" and "We outsource this to our service provider!" to "Oh, we don't really want to know what's installed here!".

No need to explain that the ostrich-like tactic will be avenged during a license audit at the latest. Although widely known and present in the minds, the financially positive aspect of a good license management is still under estimated. Of course, IT departments need to optimize their budgets in economically difficult times. But: Those who shy away from spending on fees for the use of software and think that it will be all right, are economizing in the wrong place.

Motivation for license management: cost efficiency and license audit

In the fear of having to less licenses, we occasionally see organizations being prompted to acquire a tool for their software license management because a license audit is impending or has just taken place. However, our experience also shows that many companies are not underlicensed, but on the contrary have many unused licenses. Accordingly, on the user side the audit issue is regarded quite relaxed, but why should businesses spend more money than necessary for the use of software?

Today, the value relationship between software and hardware - leveled off at an average company - is approximately between 60:40 and 70:30. Hardware is purchased, is rarely subject to change and can be written off after a few years when it has amortized. Software as an immaterial product, however, is often lost out of sight, though it has a dynamic performance through recurring maintenance costs, service agreements, license upgrade or license extensions.

We observe that in a medium-sized company with 200 workstations up to 8000 different software packages are installed. To keep track of software and licenses in this jungle and to carefully maintain an overview, running a SAM solution should be mandatory. Swiftly a fortune is wasted, when more licenses than necessary were purchased (overlicensed). Or you get lost at some point in legally mined terrain, because more software is used as licenses are available (underlicensed). Each of the two aspects can get expensive. An additional licensing after being underlicensed usually doesn't pay off and can have serious legal consequences. When an overlicensing is discovered, the fresh resources may be reallocated internally and demand-oriented, which in turn releases funds for other investments. Ideally, IT should strive to achieve an even software balance.

During the next few weeks we will publish an article series dealing with with the issues of software asset management.

The 2nd part explains why a working software asset management helps using existing licenses in a legally safe way.

The 3rd part describes why you should make your license management a permanently implemented process.

The 4th part concludes with the message that you have nothing to fear with the right SAM strategy