Monday, March 03, 2014

Software Asset Management

You know it is a funny fact, we know where the hardware is (at least most of it) and what it is used for. It is tagged, classified, part of the asset register with clearly defined depreciation rules and possible refresh when it reaches end of life. The same does not always apply to software licenses; software is bought in varied forms, box packs, paper licenses, and enterprise agreements, downloads, handed over on a disk or thumb drive. It’s all over the place with most clueless of where, what, how much, and changing licensing conditions.

We help companies save license costs, manage their software inventory effectively towards compliance and ensure that there are no surprises during renewals or audits. Said so a representative from a large global IT advisory company to an audience of CIOs. He offered data and metrics to the disbelievers on how they helped many companies. Consulting companies have been pitching that everyone has a lot more licenses than they need; rarely anyone creates an inventory of all the software they buy, deploy and retire.

Software vendor representatives in the room nodded away through the sales pitch adding that most CIOs do not look at license compliance actively; it is an afterthought and enterprises need to deploy tools to manage the process of license management. Collectively they incited the CIOs to deploy SAM or software asset management. While a couple of CIOs from IT and software development companies talked about the benefits of SAM and how they were able to improve margins, rest of the CIO audience could not connect.

A FMCG CIO interrupted: when IT is your business and software the tools of the trade, they are managed as well as the machines that define the assembly line in a manufacturing organization.  We know where the finished products that move across the supply chain are the same way you know about your tools and services. We are users of IT to run our business; IT is not our business and we need simpler licensing when compared to the current complexity that makes it impossible to keep track of the ever changing environment and terms and conditions.

Life in the software industry started with the simplest of forms such as enterprise license for the entire company which gradually moved to concurrent users, named users, and then by server. Later arrived licenses by CPU which soon changed to Core based licensing. Advent of Virtualization created some confusion which was compounded by the Cloud. My software is licensed to run only on physical servers; if you want virtual servers you can only run it on my technology stack. Some innovative guy added memory based licenses.

Mergers and acquisitions in the software industry made life even more interesting with products morphing from one avatar to another, SKU changes, changes in terms and conditions, or licensing models. In many cases these were updated on respective websites and customers expected to periodically check ! Refer to clause on page 179, sub-clause … you signed that enterprise user licensing agreement agreeing to this. It would be good for you to also take cognizance of the inflation clause which raises annuity payments every year.

Unable to stop himself, a veteran CIO asked the audience: I am sure all of you have account managers from the software companies who meet with you frequently; has anyone of them ever engaged with you or offered help to stay compliant with the licenses ? Is there role only to sell more solutions or also to help you leverage what you have and work collaboratively to keep the relationship going ? Why do we CIOs have to face audits like criminals and then get cornered for small aberrations or use beyond the licenses ?

Acknowledging the gap the vendors and the consultants in the room mentioned the need for SAM and why it is important for companies to stay abreast of their licensing. I believe that depending on the size of the enterprise and the complexity of the architecture it would be worth getting hands dirty on SAM. Until the industry learns and decides to work with CIOs on managing licenses, the onus shall remain with the IT teams to stay compliant with process driven provisioning and frequent internal assessments that rationalize use.

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