Looking back – looking forward on Software Asset Management

Cloud & Services Home IT Asset Management Risk & Audit Software

by | February 1, 2022


The new year presents us with the opportunity to look back at notable software vendor events of 2021 and consider what is ahead of us in 2022, for all things enterprise software asset management related.

According to Gartner, worldwide, IT spending for 2021 is expected to grow by 9% to just over $4.2 trillion and is forecast to achieve $4.5 trillion in 2022 (Gartner, October 2021). This spending is being driven by a need for businesses to improve their infrastructure security and flexibility to accommodate hybrid working environments for employees.

Additionally, growth in enterprise software spend is expected to outpace all other categories of IT spend, driven by demand in infrastructure software. (Gartner, October 2021.)

With this optimistic IT spend forecast, especially around enterprise software, let’s take a look at some of the enterprise software product trends, changes and updates from 2021 and those slated for 2022, that may impact your procurement decisions within the next 12 months:

Oracle SaaS

In 2021, we saw an increase of businesses move to SaaS and fully expect to see this continue into 2022. Whilst Oracle were slow to initially invest in their public cloud offerings, with the v2.0 cloud they have a highly competitive and technically advanced proposition for businesses looking to run enterprise-class workloads on highly scalable cloud architecture. Unfortunately, growth and uptake of this technically superior proposition, is being and will continue to be hampered by Oracle’s persistence in trying to maintain existing on-premise revenue streams and grow cloud uptake from the same customers. Until they cede on-premise revenue streams in lieu of Oracle cloud revenue this growth is likely to remain muted (see next section for more on this topic).

Oracle Support Rewards Scheme

June 2021 saw the launch of Oracle’s Support Rewards Scheme — a program where for each $1.00 consumed by OCI services, Oracle will provide you with a credit of $0.25 against your annual support.

This new scheme, in our view, was created to increase Oracle’s adoption of its cloud services and address some customer concerns regarding the substantial cost of annual support. Paul Bullen’s blog post provided an overview of the offering.

Oracle Java Changes

In September 2021, Oracle released Java 17 as per its usual schedule however, as Paul Bullen pointed out in his blog post, there were 2 changes that were of significant importance:

1. The cadence for releasing Long Term Support

2. Introduction of Oracle Java 17 under a new no-fee license agreement

M&A Activity

2021 saw a ‘frenzy’ of merger and acquisition (M&A) activity as reported in Forbes (May 2021) mainly due to low-interest rates, an abundance of stimulus funding, surging stock market confidence and pent-up demand from deals that were postponed at the start of the pandemic.

The M&A process is complex and multifaceted, with some organisations innocently overlooking some of the more ‘mundane’ elements such as the impacts on enterprise license compliance.

License Consultant, Charlotte Hough blogged in 2021 on the impacts of M&A on enterprise licenses and the importance of understanding your new business structure to reduce the risk of license non-compliance.

Microsoft Cloud

Digital asset management is not keeping pace with the rate of digital transformation we saw in 2021 and expect to see in 2022. This is laying the foundation for financial waste and creating a new frontier of license compliance risks. Has the cloud solved your license compliance headaches? Read Karl O’Doherty’s blog post from May 2021 which explores some of the more common license compliance risks that can impact organisations within the Microsoft Cloud.

Microsoft Audit Activity

2021 saw a decline in Microsoft audit activity and we expect to see this downward trend continue in 2022. Strong financial results at Microsoft due to increased Cloud adoption is a key factor for this decline. Although audits are still happening, we don’t foresee an increase in activity until there is a plateau in Microsoft quarterly revenues.

Power Apps and License Compliance

2021 saw an increase in demand for no code low code solutions. Citizen developers are now building more apps than ever before. However, with great power comes great responsibility. Consumption-based licensing requires careful management otherwise you may breach licensing terms or create unforeseen expenditure. Karl O’Doherty’s blog post from May 2021 looks at the top 5 license considerations for Microsoft Power Apps.

Microsoft 365 Pricing Changes

Microsoft 365 is due to see a significant price increase from March 2022. Is your organisation prepared for this uplift in spending either by right-sizing your existing Microsoft Cloud footprint or by locking-in pricing before these increases take effect? Get on the front foot and in control of your Microsoft 365/Office 365 spend today. Karl O’Doherty’s blog post on how to control your Microsoft 365 and Office 365 expenditure will help.

Microsoft EA & CSP

Microsoft Enterprise Agreements (EA) are in decline with more and more customers making the move to Cloud Solution Provider (CSP) Breath and Enterprise motions. This transition requires a new way of thinking about how you:

1. Negotiate with Microsoft and their reseller channel

2. Optimise waste

3. Manage risk

Despite its decline, the EA may still be the best fit for your organisation based on your size or the need for custom amendments. If renewing an EA in 2022, start early and understand the risks and benefits of available options. Karl O’Doherty’s blog post on the Microsoft EA v CSP will help you assess your options and plan the best way forward.

On-premise Licensing

Microsoft continues to invest in on-premise technology with an increased focus on hybrid usage scenarios. This means licensing is continuing to evolve and needs careful consideration. Continual understanding of your on-premise licensing posture in 2022 will enable organisations to:

1. Avoid non-compliance and waste

2. Optimise on-premise licensing cost

3. Maximise BYOL rights to their full potential.

Also, remember if moving to CSP the product terms that govern on-premise products may not provide the same level of usage rights as volume licensing.

Azure

The last quarter of 2021 saw Microsoft report growth of 50% for Azure revenues. As the majority of organisations have only a portion of their estate in Azure, we expect to see similar growth in 2022. Organisations need to get on the front foot by understanding:

· Future Azure demand

· Current state right sizing opportunities

Our Microsoft experts have recorded a number of webinars on this topic, including ‘Effective Ways to License and Buy Azure.’

Open Licensing Programme

The end of Open Volume licensing programme on 31st December 2021 after 20+ years, demonstrated Microsoft’s efforts to guide SMEs towards subscription-model licensing and away from perpetual agreements.

William Nelson’s blog post in September last year shares his view on the changes to CSP terms with a new post in January on the up and coming price increases in 2022.

In Summary

Some things do not change and 2022 looks to deliver more of the same things we saw in 2021.

Businesses will continue to struggle with the challenge of managing software assets, particularly as we see organisations follow the market trend to cloud adoption. Both from a technical and a commercial perspective it’s our view that the best approach for cloud, is through a hybrid model neither committing to a single cloud vendor nor completely moving all workloads to public cloud. For most enterprise organisations there will always be an element of their IT infrastructure that may be better suited to private cloud be that for security, performance or legacy reasons. This hybrid approach can present a unique set of challenges from license compliance and cloud consumption perspective, however, when properly managed, can yield significant financial benefit.

0 Comments

Subscribe To Our Newsletter

Subscribe To Our Newsletter

ITAM Channel brings the best news and views from the ITAM industry. Sign up for the newsletter and get them straight to your inbox

You have Successfully Subscribed!